Raytheon Awarded $794.6M for Guided Missile Launchers by Naval Sea Systems Command

Contract Overview

Contract Amount: $50,329,598 ($50.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2005-12-21

End Date: 2012-12-31

Contract Duration: 2,567 days

Daily Burn Rate: $19.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200604!060820!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C5402 !A!N! !N! ! !20051221!20091220!794598573!794598573!001339159!N!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000024750000!Y!N!000024750000!1440!LAUNCHERS, GUIDED MISSILE !A2 !MISSILE AND SPACE SYSTEMS !000 !NOT DISCERNABLE !336414!E! !3!A!S! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y!1700!N00024!0001! !

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756, UNITED STATES OF AMERICA

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $50.3 million to RAYTHEON COMPANY for work described as: 200604!060820!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C5402 !A!N! !N! ! !20051221!20091220!794598573!794598573!001339159!N!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA… Key points: 1. Contract awarded to Raytheon Missile Systems for launchers and guided missiles. 2. Significant value of $794.6 million indicates a major procurement. 3. The 'NOT COMPETED' status raises questions about the procurement process and potential cost efficiencies. 4. This falls within the Defense sector, specifically naval missile systems.

Value Assessment

Rating: questionable

The contract value of $794.6 million for guided missile launchers is substantial. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess its value. However, the lack of competition suggests potential for inflated pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This method can lead to higher prices as there is no market pressure to offer the best value. Price discovery may have been limited.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for these critical defense systems.

Public Impact

Enhances naval defense capabilities with advanced missile launcher technology. Supports a major defense contractor, contributing to jobs and economic activity in Arizona. Potential for increased defense spending without competitive cost savings.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Limited transparency in cost determination

Positive Signals

Acquisition of critical defense technology
Support for domestic manufacturing

Sector Analysis

This contract is within the Defense sector, specifically for naval weapon systems. Spending benchmarks for similar large-scale missile system procurements can vary widely based on technological complexity and quantity, but a lack of competition often inflates costs.

Small Business Impact

The data does not indicate any specific subcontracting goals or participation from small businesses in this contract. The primary awardee is a large defense contractor.

Oversight & Accountability

The 'NOT COMPETED' designation warrants further oversight to ensure the government received fair and reasonable pricing. Accountability for the justification of sole-source procurement is crucial.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited price transparency
No clear small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.3 million to RAYTHEON COMPANY. 200604!060820!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C5402 !A!N! !N! ! !20051221!20091220!794598573!794598573!001339159!N!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000024750000!Y!N!000024750000!1440!LAUNCHERS, GUIDED MISSILE !A2 !MISSILE AND SPACE SYSTEMS !000 !NOT DISCERNABLE !336414!E! !3!A!S! ! ! !999

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 $50.3 million.

What is the period of performance?

Start: 2005-12-21. End: 2012-12-31.

What was the justification for not competing this significant contract, and how was the price determined to be fair and reasonable?

The justification for not competing this contract is not provided in the data. Typically, sole-source awards require a detailed justification, such as the existence of a unique capability or a critical need that only one source can fulfill. The process for determining fair and reasonable pricing in such cases often involves detailed cost analysis, comparison to historical data (if available), and negotiation.

What are the potential risks associated with awarding a nearly $800 million contract without competition?

The primary risk is paying a premium due to the absence of competitive pressure, potentially leading to inefficient use of taxpayer funds. Other risks include a lack of innovation that might arise from competition and a reduced incentive for the contractor to optimize costs. There's also a reputational risk if the sole-source justification is later found to be weak.

How does this procurement contribute to the overall effectiveness of naval missile systems, and could alternative solutions have offered similar effectiveness at a lower cost?

This contract directly contributes to the effectiveness of naval missile systems by providing essential launchers. Without competition, it's challenging to assess if alternative solutions could have offered similar effectiveness at a lower cost. A competitive process would have allowed for the evaluation of various technological approaches and pricing structures to ensure optimal value.

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: 1151 E HERMANS RD, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $44,821,038

Exercised Options: $20,071,038

Current Obligation: $50,329,598

Contract Characteristics

Cost or Pricing Data: YES

Timeline