DoD's $187M Raytheon Contract for Missile Parts Lacks Competition, Raises Cost Concerns
Contract Overview
Contract Amount: $186,984,894 ($187.0M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2016-06-30
End Date: 2023-03-31
Contract Duration: 2,465 days
Daily Burn Rate: $75.9K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FY16-20 BLK 1 DESIGN AGENT SUPPORT SERVICES
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $187.0 million to RAYTHEON COMPANY for work described as: FY16-20 BLK 1 DESIGN AGENT SUPPORT SERVICES Key points: 1. Significant spending on specialized missile parts over 7 years. 2. Sole-source award to Raytheon Company limits price discovery. 3. Potential for inflated costs due to lack of competition. 4. Contract falls under 'Other Guided Missile and Space Vehicle Parts' manufacturing sector.
Value Assessment
Rating: questionable
The contract's total value of $187M over 7 years is substantial. Without competitive bidding, it's difficult to assess if the pricing is fair compared to market rates or similar government contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This significantly limits price discovery and competition, potentially leading to higher costs for the government.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these specialized missile parts.
Public Impact
Taxpayers may be overpaying for critical defense components. Lack of transparency in pricing due to sole-source nature. Potential impact on defense readiness if costs divert funds from other priorities.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
Positive Signals
- Long-term contract provides stability
- Supports critical defense manufacturing
Sector Analysis
This contract is within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector. Spending in this niche area is often characterized by high R&D costs and limited suppliers, making competitive bidding challenging but crucial.
Small Business Impact
The contract data indicates no specific set-aside for small businesses, and the prime contractor is Raytheon Company, a large business. There is no indication of subcontracting opportunities for small businesses in the provided data.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure pricing remains reasonable and that the government is receiving good value. Regular audits and performance reviews are essential.
Related Government Programs
- Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for cost overruns due to lack of price discovery.
- High contract value warrants close scrutiny.
- Lack of small business participation noted.
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $187.0 million to RAYTHEON COMPANY. FY16-20 BLK 1 DESIGN AGENT SUPPORT SERVICES
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 $187.0 million.
What is the period of performance?
Start: 2016-06-30. End: 2023-03-31.
What is the justification for the sole-source award, and has it been reviewed for potential competition?
The justification for a sole-source award is critical for understanding why competition was not pursued. Agencies must provide detailed reasons, such as unique capabilities or urgent needs. A review of this justification is necessary to determine if alternative sources could have been identified or if the sole-source status is still warranted.
How are cost controls and price reasonableness being managed in this sole-source contract?
Given the absence of competition, robust cost control mechanisms are paramount. This includes detailed cost analysis, regular audits of contractor expenses, and benchmarking against industry standards where possible. The government should actively negotiate pricing and ensure transparency in the contractor's cost structure.
What is the long-term strategy for acquiring these missile parts, and will future procurements include competitive elements?
Understanding the long-term acquisition strategy is vital. If these parts are critical and likely to be needed for an extended period, the Department of Defense should explore options to foster competition in future contract awards. This could involve market research, encouraging new entrants, or breaking down the requirement into smaller, more competitive lots.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002415R5433
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 1151 E HERMANS RD, TUCSON, AZ, 85756
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $198,782,711
Exercised Options: $196,864,727
Current Obligation: $186,984,894
Actual Outlays: $5,852,764
Subaward Activity
Number of Subawards: 127
Total Subaward Amount: $71,176,068
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-06-30
Current End Date: 2023-03-31
Potential End Date: 2023-03-31 00:00:00
Last Modified: 2025-08-22
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