Raytheon Company awarded $47.9M for missile and space vehicle manufacturing, a sole-source contract spanning over four years

Contract Overview

Contract Amount: $47,880,466 ($47.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2008-09-16

End Date: 2013-03-30

Contract Duration: 1,656 days

Daily Burn Rate: $28.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SPECIAL MAINTAINENCE TASKS FY 08-11

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $47.9 million to RAYTHEON COMPANY for work described as: SPECIAL MAINTAINENCE TASKS FY 08-11 Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Long contract duration (over 4 years) may indicate specialized needs but also limits flexibility. 3. No small business set-aside or subcontracting reported, suggesting limited direct benefit to small businesses. 4. Contract falls under Guided Missile and Space Vehicle Manufacturing, a critical defense sector. 5. Performance period spans FY08-FY11, with completion in 2013, indicating a historical contract. 6. Awarded by the Department of Defense, a major federal spender in defense manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and historical data. Without competitive bids, it's difficult to ascertain if the $47.9 million represents a fair market price. The lack of transparency inherent in non-competed contracts makes a definitive value-for-money assessment difficult. Further analysis would require access to internal cost data or comparable sole-source awards for similar specialized defense manufacturing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means that taxpayers did not benefit from the price reductions and innovation that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no market pressure to drive down prices. The absence of competition limits the government's ability to secure the best possible value.

Public Impact

The primary beneficiaries are the Department of Defense, which receives specialized missile and space vehicle manufacturing services. The contract supports the production and maintenance of critical defense assets. Geographic impact is primarily in Arizona, where the contractor is located. Workforce implications include employment for skilled engineers, technicians, and manufacturing personnel at Raytheon.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential taxpayer savings.
Lack of small business involvement may reduce opportunities for smaller firms in the defense supply chain.
Long contract duration could lead to cost overruns if not managed effectively.
Historical data makes current market comparisons difficult.

Positive Signals

Contract supports critical defense manufacturing capabilities.
Award to a known entity (Raytheon) suggests a degree of confidence in their ability to perform.
Fixed-price contract type can provide cost certainty if well-defined.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized and critical component of the defense industrial base. Companies in this sector require significant R&D investment, advanced manufacturing capabilities, and stringent quality control. Spending in this area is often driven by national security requirements and long-term strategic planning. Comparable spending benchmarks are difficult to establish due to the proprietary nature of defense technologies and the unique requirements of each contract.

Small Business Impact

This contract does not appear to have included a small business set-aside. Furthermore, there is no indication of subcontracting requirements for small businesses. This suggests that the prime contractor, Raytheon, was expected to perform the majority, if not all, of the work internally. Consequently, the direct economic impact on the small business ecosystem for this specific award is likely minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet performance and quality standards. Accountability measures are inherent in the contract terms, including delivery schedules and specifications. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Missile Manufacturing
Space Vehicle Production
Defense Procurement
Advanced Manufacturing Contracts
Department of Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.9 million to RAYTHEON COMPANY. SPECIAL MAINTAINENCE TASKS FY 08-11

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $47.9 million.

What is the period of performance?

Start: 2008-09-16. End: 2013-03-30.

What is Raytheon Company's track record with the Department of Defense for similar contracts?

Raytheon Company, now part of RTX Corporation, has a long and extensive history of contracting with the Department of Defense, particularly in areas of missile systems, aerospace, and defense electronics. They are a major defense contractor known for producing a wide range of advanced military hardware. Analyzing their broader contract portfolio reveals numerous awards for missile production, radar systems, and other defense technologies. While this specific contract was sole-source, Raytheon has also secured significant business through competitive processes. Their track record generally indicates a capacity to deliver complex defense systems, though like any large contractor, they have faced scrutiny over costs and performance on specific programs over the years. A comprehensive review would involve examining specific program performance metrics and cost histories across their DoD engagements.

How does the $47.9 million value compare to similar missile and space vehicle manufacturing contracts?

Directly comparing the $47.9 million value of this sole-source contract is challenging without access to specific technical requirements and the competitive landscape at the time of award. Missile and space vehicle manufacturing contracts can vary significantly in scope, complexity, and duration. Contracts for research and development, prototyping, low-rate initial production, or full-rate production of different types of missiles or space components will have vastly different price points. Given this was a definitive contract spanning over four years (September 2008 to March 2013), the annual value was approximately $11-12 million. This figure might be considered moderate for specialized defense manufacturing, but a true benchmark would require identifying comparable sole-source or competed contracts for similar systems awarded within the same timeframe, factoring in inflation and technological advancements.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, the government has less leverage to negotiate the lowest possible price, potentially leading to reduced value for taxpayer money. Another risk is contractor performance; while Raytheon is a reputable firm, sole-source contracts can sometimes reduce the urgency for a contractor to innovate or improve efficiency compared to a competitive environment. There's also a risk of scope creep or cost overruns if the contract's terms are not tightly managed. Finally, the long duration increases the risk of technological obsolescence or changing defense needs not being adequately addressed without contract modifications.

How effective was this contract in meeting the Department of Defense's needs for guided missile and space vehicle manufacturing?

Assessing the effectiveness of this specific contract is difficult based solely on the provided data. The contract was awarded for 'SPECIAL MAINTAINENCE TASKS FY 08-11' and completed in March 2013. Its effectiveness would be measured by whether these maintenance tasks were completed on time, within budget (as defined by the fixed-price structure), and to the required technical specifications. Given it was a sole-source award to a major defense contractor, the assumption is that it fulfilled a necessary, specialized maintenance requirement that could not be easily sourced elsewhere. However, without performance reports or mission success metrics related to the systems maintained, a definitive judgment on effectiveness remains elusive. The continuation of such contracts often implies a level of satisfaction with the service provided.

What are the historical spending patterns for guided missile and space vehicle manufacturing by the Department of Defense?

The Department of Defense has consistently allocated substantial funding towards guided missile and space vehicle manufacturing throughout recent decades. This spending is driven by national security imperatives, technological advancements, and the need to maintain a strategic advantage. Historical patterns show significant investment in research, development, testing, and production of a wide array of missile systems (ballistic, cruise, air-to-air, etc.) and space-based assets for intelligence, surveillance, reconnaissance, and communication. Spending levels fluctuate based on geopolitical conditions, modernization programs, and budget allocations. Major defense contractors like Raytheon, Lockheed Martin, Northrop Grumman, and Boeing are the primary recipients of these funds, often through large, multi-year contracts, both competed and sole-source, reflecting the high barriers to entry and specialized nature of this sector.

Industry Classification

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

Product/Service Code: WEAPONS

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

Parent Company: RTX Corp

Address: 1151 E HERMANS RD, TUCSON, AZ, 85706

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $73,498,089

Exercised Options: $52,708,757

Current Obligation: $47,880,466

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline