Raytheon Company awarded $25.8M contract for guided missile launchers, with a 1,967-day performance period

Contract Overview

Contract Amount: $25,831,464 ($25.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2005-03-04

End Date: 2010-07-23

Contract Duration: 1,967 days

Daily Burn Rate: $13.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200506!047460!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5483 !A!N! !N! ! !20050304!20070131!001463090!001463090!001339159!N!RAYTHEON COMPANY !1847 W MAIN RD !PORTSMOUTH !RI!02871!57700!005!44!PORTSMOUTH !NEWPORT !RHODE ISLD!+000012703294!Y!N!000012756982!1440!LAUNCHERS, GUIDED MISSILE !A2 !MISSILE AND SPACE SYSTEMS !370 !COMMON MISSILE !336414!E! !3! ! ! ! ! !20200930!B! ! !A! !D!N!J!1!001!N!1B!A!Y!F!A!NL!N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! !1700!N00024!0001! !

Place of Performance

Location: PORTSMOUTH, NEWPORT County, RHODE ISLAND, 02871

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $25.8 million to RAYTHEON COMPANY for work described as: 200506!047460!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5483 !A!N! !N! ! !20050304!20070131!001463090!001463090!001339159!N!RAYTHEON COMPANY !1847 W MAIN RD !PORTSMOUTH !RI!02871!57700!005!44!PORTSMOUTH !NEWP… Key points: 1. Contract value of $25.8 million for missile launchers indicates a significant investment in naval defense capabilities. 2. The contract was not competed, raising questions about potential cost efficiencies and market-driven pricing. 3. A long performance period of 1,967 days suggests a complex or ongoing need for these specialized components. 4. The award to Raytheon Company, a major defense contractor, places this within the established defense industrial base. 5. The specific product code 'LAUNCHERS, GUIDED MISSILE' points to a critical component for offensive naval operations.

Value Assessment

Rating: fair

The contract value of $25.8 million for guided missile launchers is substantial. Without comparable contract data for similar systems or specific unit costs, it is difficult to definitively benchmark value for money. The long duration of the contract (1,967 days) suggests a potentially stable, albeit high, cost over time. Further analysis would require understanding the scope of 'LAUNCHERS, GUIDED MISSILE' and comparing pricing against industry standards for similar defense hardware.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source procurement. This means only one vendor, Raytheon Company, was solicited for this requirement. The lack of competition limits the government's ability to explore alternative solutions or leverage market forces to achieve the best possible price. It suggests a specific capability or existing relationship may have driven this procurement approach.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates robust oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are the U.S. Navy, which receives critical missile launcher systems for its fleet. The services delivered include the provision of guided missile launchers, essential for naval combat effectiveness. The geographic impact is primarily within the defense industrial base, with potential implications for Rhode Island where Raytheon is located. Workforce implications include employment at Raytheon and its subcontractors involved in the manufacturing and delivery of these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for taxpayers.
Long contract duration could mask inefficiencies if not closely monitored.
Reliance on a single source for critical defense components poses a strategic risk.

Positive Signals

Award to a major defense contractor like Raytheon suggests access to established expertise and production capabilities.
The specific nature of the product (guided missile launchers) indicates a focus on critical national security assets.
A definitive contract award implies a clear understanding of requirements and a commitment to fulfilling them.

Sector Analysis

This contract falls within the Defense sector, specifically the manufacturing of missile and space systems. The market for such specialized defense hardware is dominated by a few large, established contractors. Spending in this area is driven by national security priorities and technological advancements in weaponry. Comparable spending benchmarks would typically involve other major defense procurements for similar weapon systems or platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss: false'. There is no explicit information regarding subcontracting plans for small businesses. The focus on a large, sole-source award to a major prime contractor suggests limited direct opportunities for small businesses within this specific procurement, though they may be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Naval Sea Systems Command. As a sole-source award, scrutiny on pricing and performance is crucial. Transparency is limited due to the non-competitive nature. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations into potential fraud, waste, or abuse.

Related Government Programs

Naval Ship Systems
Missile Systems Procurement
Defense Manufacturing
Guided Missile Systems
Naval Ordnance

Risk Flags

Sole-source award
Lack of competition
Long performance period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.8 million to RAYTHEON COMPANY. 200506!047460!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5483 !A!N! !N! ! !20050304!20070131!001463090!001463090!001339159!N!RAYTHEON COMPANY !1847 W MAIN RD !PORTSMOUTH !RI!02871!57700!005!44!PORTSMOUTH !NEWPORT !RHODE ISLD!+000012703294!Y!N!000012756982!1440!LAUNCHERS, GUIDED MISSILE !A2 !MISSILE AND SPACE SYSTEMS !370 !COMMON MISSILE !336414!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $25.8 million.

What is the period of performance?

Start: 2005-03-04. End: 2010-07-23.

What is Raytheon Company's track record with the Department of Defense, particularly for missile systems?

Raytheon Company, now part of RTX Corporation, has a long and extensive history as a prime contractor for the U.S. Department of Defense, particularly in the realm of missile systems. They are known for developing and producing a wide array of advanced weaponry, including air-to-air missiles, surface-to-air missiles, and strategic defense systems. Their involvement spans decades and numerous major defense programs. For instance, they are the manufacturer of the Patriot missile system and the Tomahawk cruise missile. Their track record includes numerous large-scale contracts for various branches of the military, demonstrating significant experience in complex defense manufacturing and integration. However, like many large defense contractors, they have also faced scrutiny regarding contract costs and performance on specific programs.

How does the $25.8 million contract value compare to similar procurements for guided missile launchers?

Benchmarking the $25.8 million contract value for guided missile launchers is challenging without specific details on the type, quantity, and technological sophistication of the launchers procured. Missile launchers can range from relatively simple systems to highly complex, integrated platforms. However, for context, major naval defense programs often involve hundreds of millions or even billions of dollars. A $25.8 million award for a specific component like launchers, especially over a nearly 2,000-day period, suggests a significant, but not necessarily unprecedented, investment. To provide a precise comparison, one would need to identify contracts for identical or highly similar systems awarded around the same time, factoring in inflation and technological advancements. The 'NOT COMPETED' status also complicates direct value-for-money comparisons.

What are the primary risks associated with a sole-source award for critical defense components like missile launchers?

The primary risks associated with a sole-source award for critical defense components like missile launchers include: 1. **Higher Costs:** Without competition, the contractor may not be incentivized to offer the lowest possible price, potentially leading to inflated costs for taxpayers. 2. **Limited Innovation:** The absence of multiple bidders can stifle innovation as there's less pressure to develop more efficient or advanced solutions. 3. **Dependency and Lock-in:** The government becomes dependent on a single supplier, which can create vulnerabilities if that supplier faces production issues, financial instability, or decides to exit the market. 4. **Reduced Oversight Effectiveness:** While oversight mechanisms exist, the lack of competitive proposals makes it harder to establish robust benchmarks for performance and cost, potentially weakening the government's negotiating position. 5. **Potential for Complacency:** The contractor might become complacent regarding quality or delivery schedules due to the guaranteed award.

What is the significance of the 'LAUNCHERS, GUIDED MISSILE' product code (NAICS 334513) in the defense sector?

The product code 'LAUNCHERS, GUIDED MISSILE' (NAICS 334513, though the data shows 336414 which is Guided Missile and Space Vehicle Manufacturing) signifies a critical component within the defense industrial base. These launchers are the systems designed to deploy guided missiles, which are essential offensive and defensive weapons for naval, air, and ground forces. Their development and production require advanced engineering, precision manufacturing, and integration with sophisticated guidance and control systems. Companies operating in this sub-sector are typically highly specialized, possess significant R&D capabilities, and adhere to stringent quality and security standards. The manufacturing of such systems is often concentrated among a few major defense contractors due to the high barriers to entry, including technological expertise, capital investment, and security clearances.

How does the contract's duration (1,967 days) impact its overall value and risk assessment?

A contract duration of 1,967 days (approximately 5.4 years) is substantial and has several implications for value and risk. **Value:** A longer duration can indicate a stable, long-term requirement for the product or service, potentially allowing the contractor to achieve economies of scale and more predictable production planning, which *could* translate to better unit pricing over time if managed effectively. It also provides continuity for the end-user (e.g., the Navy). **Risk:** However, a long duration also increases the risk of cost overruns due to potential changes in material costs, labor rates, or unforeseen technical challenges. It also extends the period during which the government is committed to a specific solution, potentially missing out on newer technologies that emerge during the contract period. For a sole-source contract, the extended duration amplifies the risk of paying above-market rates for an extended period if pricing is not rigorously managed and reviewed.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1847 W MAIN RD, PORTSMOUTH, RI, 02871

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $25,831,464

Current Obligation: $25,831,464

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline