Navy awards Raytheon $146M for MK 44 MOD 6 missiles, impacting guided missile manufacturing in Arizona

Contract Overview

Contract Amount: $146,205,116 ($146.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-12-19

End Date: 2029-05-31

Contract Duration: 1,259 days

Daily Burn Rate: $116.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY26 RAM GMRP MK 44 MOD 6 (BLK 2B)

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $146.2 million to RAYTHEON COMPANY for work described as: FY26 RAM GMRP MK 44 MOD 6 (BLK 2B) Key points: 1. Contract value of $146.2M for guided missile manufacturing. 2. Sole-source award to Raytheon Company raises questions about competition. 3. Long contract duration of 1259 days suggests a sustained need. 4. Firm-fixed-price contract type aims to control costs. 5. Performance period spans from late 2025 to mid-2029. 6. Contract supports the Department of the Navy's strategic missile capabilities.

Value Assessment

Rating: fair

The contract value of $146.2 million for guided missile manufacturing is substantial. Without specific benchmarks for the MK 44 MOD 6 (BLK 2B) missile, a direct value-for-money assessment is challenging. However, the firm-fixed-price structure indicates an attempt to establish a predictable cost. Further analysis would require comparing this unit cost to similar missile systems or previous procurements of this specific model to determine if it represents a competitive price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Raytheon Company, meaning it was not competed. This approach is typically used when only one responsible source is available or authorized by statute. The lack of competition means that the Navy did not benefit from a bidding process that could have potentially driven down prices or spurred innovation from multiple vendors.

Taxpayer Impact: Sole-source awards limit opportunities for taxpayers to benefit from competitive pricing, potentially leading to higher costs than if multiple companies had vied for the contract.

Public Impact

The Department of the Navy benefits from the acquisition of critical missile systems. The contract supports the production of guided missiles, enhancing national defense capabilities. The primary geographic impact is in Arizona, where Raytheon Company is located. The contract likely sustains jobs within Raytheon's guided missile manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may reduce incentives for the contractor to innovate or improve efficiency.
Long contract duration could mask potential cost overruns if not closely monitored.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Award to an established defense contractor like Raytheon suggests a focus on proven capabilities.
Contract supports a specific, likely critical, defense system (MK 44 MOD 6).

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on guided missile and space vehicle manufacturing. This is a highly specialized and critical area of defense procurement, often dominated by a few large, experienced contractors due to high barriers to entry, significant R&D investment, and stringent security requirements. Spending in this sector is directly tied to national security priorities and geopolitical factors.

Small Business Impact

The contract data indicates that small business participation is not a primary focus, as the award is not a small business set-aside and the prime contractor is Raytheon Company, a large corporation. There is no explicit information on subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem is likely minimal unless Raytheon actively engages small businesses in its supply chain for this specific contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny may focus on ensuring the contractor meets performance specifications and adheres to the firm-fixed-price terms. Transparency is generally maintained through contract awards databases, but detailed operational oversight is internal to the agency. Inspector General involvement would typically be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

Guided Missile Manufacturing
Defense Procurement
Naval Weapon Systems
Ammunition Production
Strategic Weapons Systems

Risk Flags

Sole-source award
Potential for higher costs due to lack of competition
Long contract duration requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $146.2 million to RAYTHEON COMPANY. FY26 RAM GMRP MK 44 MOD 6 (BLK 2B)

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 $146.2 million.

What is the period of performance?

Start: 2025-12-19. End: 2029-05-31.

What is the historical spending trend for the MK 44 MOD 6 missile program?

Historical spending data for the specific MK 44 MOD 6 (BLK 2B) missile program is not directly available in the provided data. However, the current award of $146.2 million suggests a significant, ongoing investment in this particular missile system. To understand historical trends, one would need to access historical contract databases for the Department of the Navy, searching for previous awards to Raytheon Company or other entities for this or similar missile variants. Analyzing past contract values, quantities, and durations would reveal whether this $146.2 million award represents an increase, decrease, or stable level of spending for this capability over time. Without this historical context, it's difficult to assess if current spending is anomalous or part of a consistent procurement strategy.

How does the firm-fixed-price (FFP) contract type compare to other pricing arrangements for similar defense contracts?

The Firm-Fixed-Price (FFP) contract type is a common and often preferred pricing arrangement in defense procurement, especially for well-defined products like missiles. In an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides the government with maximum cost certainty and shifts the risk of cost overruns to the contractor. Compared to cost-plus contracts, FFP offers greater predictability. However, if the contractor significantly underestimates costs, they bear the loss, which could incentivize them to cut corners on quality if not properly monitored. For complex or R&D-intensive projects where costs are highly uncertain, other contract types like Cost-Plus-Fixed-Fee (CPFF) or Cost-Plus-Incentive-Fee (CPIF) might be more appropriate, though they carry higher cost risk for the government.

What are the potential risks associated with a sole-source award for critical defense components?

Sole-source awards for critical defense components like the MK 44 MOD 6 missile carry several risks. Primarily, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, as the government does not benefit from market forces driving cost efficiency. This can result in less value for taxpayer money. Secondly, it can reduce contractor incentive to innovate or improve processes, as there is no competitive pressure to do so. Dependence on a single supplier also creates supply chain vulnerability; any disruption at the sole source could have significant national security implications. Furthermore, it can limit opportunities for other capable companies to enter the market or expand their capabilities, potentially hindering future competition and industrial base resilience.

What is Raytheon Company's track record in delivering guided missile systems to the Department of the Navy?

Raytheon Company, now part of RTX, has a long and extensive track record of delivering a wide array of missile systems to the Department of the Navy and other branches of the U.S. military. They are a major defense contractor known for producing advanced air-to-air, surface-to-air, and land-attack missiles, as well as other defense electronics and aerospace products. Their portfolio includes well-known systems relevant to naval operations. While specific performance metrics for every contract are not publicly detailed, Raytheon's continued success in securing large, sole-source, and competitive contracts from the Navy indicates a generally positive performance history and a high level of trust from the customer regarding their technical capabilities and ability to meet demanding requirements for complex weapon systems.

How does the contract's duration (1259 days) influence risk and oversight?

A contract duration of 1259 days (approximately 3.5 years) is substantial and influences risk and oversight in several ways. For the contractor, it provides a degree of program stability and allows for long-term planning and resource allocation. For the government, a longer duration necessitates sustained oversight to ensure continued compliance with contract terms, quality standards, and delivery schedules. The risk of scope creep or requirement changes increases over time, requiring robust contract management. Furthermore, economic factors like inflation or material cost fluctuations become more relevant over longer periods, even under a firm-fixed-price contract, potentially impacting the contractor's profitability and, indirectly, their motivation if not managed carefully. Regular performance reviews and milestone tracking are crucial to mitigate risks associated with extended contract periods.

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: N0002425R5403

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, 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: $275,998,033

Exercised Options: $146,205,116

Current Obligation: $146,205,116

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline