DoD Awards Raytheon $21.7M for ESSM Block 1 Missile Parts

Contract Overview

Contract Amount: $21,692,733 ($21.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-12-11

End Date: 2022-12-31

Contract Duration: 1,846 days

Daily Burn Rate: $11.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BASIC CONTRACT AWARD FOR ESSM BLOCK 1 DLMF/ILMF

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $21.7 million to RAYTHEON COMPANY for work described as: BASIC CONTRACT AWARD FOR ESSM BLOCK 1 DLMF/ILMF Key points: 1. Significant award for specialized missile components. 2. Raytheon is a major defense contractor, indicating established capabilities. 3. Potential for cost overruns with Cost Plus Fixed Fee contract type. 4. Sector focus on defense manufacturing, a critical area for national security.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee contract type allows for cost reimbursement plus a fixed fee, which can lead to higher final costs than fixed-price contracts if costs escalate. Benchmarking is difficult without specific per-unit data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not available for competition, suggesting a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure.

Taxpayer Impact: Taxpayers may bear a higher cost due to the lack of competition and the cost-reimbursable nature of the contract.

Public Impact

Ensures continued availability of critical missile components for naval defense. Supports advanced defense technology and manufacturing capabilities. Potential for increased defense readiness through reliable supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Sole-source award
Long contract duration

Positive Signals

Supports critical defense systems
Award to established contractor

Sector Analysis

This award falls within the defense manufacturing sector, specifically focusing on missile parts. Spending in this area is driven by national security needs and technological advancements in weaponry.

Small Business Impact

The award does not indicate any specific set-aside for small businesses, and the prime contractor is a large corporation. Further analysis would be needed to determine small business subcontracting opportunities.

Oversight & Accountability

Oversight is crucial for Cost Plus Fixed Fee contracts to ensure costs are reasonable and the fixed fee is justified. The Department of the Navy is responsible for monitoring performance and expenditures.

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

Cost Plus Fixed Fee contract type
Sole-source award
Lack of competition
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.7 million to RAYTHEON COMPANY. BASIC CONTRACT AWARD FOR ESSM BLOCK 1 DLMF/ILMF

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 $21.7 million.

What is the period of performance?

Start: 2017-12-11. End: 2022-12-31.

What is the projected total cost if cost overruns occur under this Cost Plus Fixed Fee contract?

The contract has a base award of $21.7 million. With a Cost Plus Fixed Fee structure, the final cost can exceed this amount if actual costs are higher than anticipated. The fixed fee component provides some cost certainty for the contractor's profit, but the government bears the risk of escalating direct and indirect costs.

What are the specific risks associated with a sole-source award for ESSM Block 1 components?

A sole-source award eliminates competitive pressure, potentially leading to inflated prices and reduced innovation. It also raises concerns about the government's ability to secure the best value. Without competition, there's less incentive for the contractor to optimize efficiency or explore cost-saving measures.

How does this contract contribute to the overall effectiveness and readiness of the ESSM Block 1 system?

This contract is essential for maintaining and supplying critical components for the ESSM Block 1 missile system, directly impacting the operational readiness of naval assets. Ensuring a steady supply of these parts is vital for the system's effectiveness in defense operations.

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: N0002417R5400

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: $24,008,787

Exercised Options: $23,272,365

Current Obligation: $21,692,733

Actual Outlays: $730

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $1,298,287

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline