DoD's $8.89M ESSM Contract Awarded to Raytheon Company for Missile Manufacturing

Contract Overview

Contract Amount: $8,893,143 ($8.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-12-22

End Date: 2030-12-31

Contract Duration: 1,835 days

Daily Burn Rate: $4.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ESSM DLMF/ILMF CY26-30

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $8.9 million to RAYTHEON COMPANY for work described as: ESSM DLMF/ILMF CY26-30 Key points: 1. Awarded to a single, established defense contractor, Raytheon Company. 2. Contract covers a significant period (2025-2030) for missile manufacturing. 3. Limited competition is a key factor in this award. 4. Focus on guided missile and space vehicle manufacturing sector.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking is difficult without specific unit cost data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is not available for competition, indicating a sole-source or limited source award. This limits price discovery and potentially increases costs for the government.

Taxpayer Impact: The lack of competition may result in higher costs for taxpayers compared to a fully competitive procurement.

Public Impact

Ensures continued production of essential missile systems for the Navy. Supports a major defense contractor and its supply chain. Long-term contract may provide stability but lacks competitive pressure for cost savings.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee contract type
Long contract duration

Positive Signals

Essential defense capability
Established contractor with proven track record

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical area for national defense. Spending in this sector is often characterized by high R&D costs and limited competition due to specialized requirements.

Small Business Impact

The contract is not set aside for small businesses, and the prime contractor, Raytheon Company, is a large corporation. There is no indication of small business participation in the provided data.

Oversight & Accountability

The Cost Plus Fixed Fee structure requires robust oversight from the Department of the Navy to ensure costs are reasonable and the fixed fee is justified. Tracking performance and expenditures will be crucial.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns with CPFF contract type
Long-term duration may reduce flexibility
No small business set-aside identified

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.9 million to RAYTHEON COMPANY. ESSM DLMF/ILMF CY26-30

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 $8.9 million.

What is the period of performance?

Start: 2025-12-22. End: 2030-12-31.

What is the estimated cost per unit for the ESSM missiles under this contract, and how does it compare to previous procurements or industry benchmarks?

The provided data does not include a per-unit cost. A Cost Plus Fixed Fee contract makes direct per-unit cost calculation difficult without further breakdown. Benchmarking against similar missile systems or historical data would be necessary to assess value for money. Without this, it's hard to determine if the pricing is competitive.

Given the 'NOT AVAILABLE FOR COMPETITION' status, what specific justifications were provided for limiting competition, and what are the potential risks to long-term cost-effectiveness?

The justification for limiting competition is not detailed in the provided data. Potential risks include inflated pricing due to lack of market pressure, reduced incentive for innovation from the contractor, and a missed opportunity to explore alternative solutions or suppliers that could offer better value or performance.

How will the Department of the Navy ensure effective oversight and accountability for this long-term Cost Plus Fixed Fee contract to mitigate risks of cost overruns and ensure mission success?

Effective oversight will require rigorous monitoring of contractor costs, regular performance reviews against defined milestones, and strong contract management. The Navy must ensure that the fixed fee is appropriate and that the contractor is incentivized to control costs while meeting stringent quality and delivery requirements for the ESSM.

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: N0002426R5415

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $120,634,624

Exercised Options: $40,607,721

Current Obligation: $8,893,143

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline