DoD's $338.8M Raytheon Contract for Missile Manufacturing: Limited Competition Raises Concerns
Contract Overview
Contract Amount: $338,834,048 ($338.8M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2018-05-10
End Date: 2024-02-28
Contract Duration: 2,120 days
Daily Burn Rate: $159.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: RAM FY18 BLOCK 2 GMRP
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $338.8 million to RAYTHEON COMPANY for work described as: RAM FY18 BLOCK 2 GMRP Key points: 1. Significant contract value of $338.8M awarded to Raytheon Company. 2. Limited competition raises questions about price discovery and potential overspending. 3. Contract duration of 2120 days suggests a long-term commitment. 4. Focus on Guided Missile and Space Vehicle Manufacturing indicates a critical defense sector.
Value Assessment
Rating: questionable
The contract's pricing is difficult to assess without competitive benchmarks. Given the limited competition and firm fixed-price structure, there's a risk that the government may not be achieving the best possible price for these specialized missile components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, suggesting a sole-source or limited source award. This lack of robust competition limits the government's ability to leverage market forces to drive down costs and ensure optimal value.
Taxpayer Impact: The limited competition may result in higher costs for taxpayers compared to a fully competitive procurement, potentially diverting funds from other critical areas.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The long-term nature of the contract impacts future budget allocations for defense. Dependence on a single contractor for critical missile components could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Lack of price benchmarks
- Long contract duration
Positive Signals
- Firm fixed-price contract structure
- Awarded to a known defense contractor
Sector Analysis
This contract falls within the Defense sector, specifically Guided Missile and Space Vehicle Manufacturing. Spending in this area is critical for national security, but often involves high costs due to specialized technology and limited suppliers.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded to Raytheon Company. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses.
Oversight & Accountability
The contract is managed by the Department of Defense's Defense Contract Management Agency. Oversight will be crucial to ensure performance and cost control, especially given the limited competition.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Limited competition
- Potential for inflated pricing
- Lack of transparency in price discovery
- Long-term financial commitment
- Dependence on a single supplier
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $338.8 million to RAYTHEON COMPANY. RAM FY18 BLOCK 2 GMRP
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 $338.8 million.
What is the period of performance?
Start: 2018-05-10. End: 2024-02-28.
What specific factors led to this contract being limited and not open to full competition?
The limited competition likely stems from the specialized nature of the guided missile and space vehicle manufacturing, potentially requiring unique technical capabilities, proprietary technology, or existing infrastructure that only Raytheon possesses. Government justifications for limited competition typically involve factors like urgent need, lack of available sources, or the need for standardization with existing systems.
How does the firm fixed-price structure mitigate or exacerbate risks in a limited competition scenario?
A firm fixed-price contract shifts most of the risk to the contractor, providing cost certainty for the government. However, in a limited competition, this structure can exacerbate risk if the initial price is inflated due to lack of competitive pressure. The government relies heavily on the contractor's cost estimation accuracy and integrity.
What is the potential long-term impact on defense readiness if this limited competition model is prevalent?
If limited competition is a common model for critical defense components, it could lead to sustained higher costs for taxpayers and potentially stifle innovation from emerging competitors. Over-reliance on a few established contractors might also create vulnerabilities in the supply chain and reduce overall market dynamism.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002418R5425
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $341,373,127
Exercised Options: $338,834,048
Current Obligation: $338,834,048
Actual Outlays: $80,464,954
Subaward Activity
Number of Subawards: 565
Total Subaward Amount: $678,000,038
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-05-10
Current End Date: 2024-02-28
Potential End Date: 2024-02-28 00:00:00
Last Modified: 2025-09-26
More Contracts from Raytheon Company
- Federal Contract — $5.7B (Department of Defense)
- TEN Fire Units for Qatar — $5.6B (Department of Defense)
- GPS Advanced Control Segment (OCX) Phase B Blocks 1 and 2 — $4.5B (Department of Defense)
- An/Spy-6(v) Hardware Production — $3.3B (Department of Defense)
- Predominant - Patriot UAE — $3.0B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)