DoD Awards $43.8M Missile Spares Contract to Raytheon, Lacking Competition

Contract Overview

Contract Amount: $43,836,571 ($43.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-08-16

End Date: 2028-12-31

Contract Duration: 1,598 days

Daily Burn Rate: $27.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MISSILE SPARES

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $43.8 million to RAYTHEON COMPANY for work described as: MISSILE SPARES Key points: 1. Significant contract value for critical missile components. 2. Sole awardee raises questions about competitive pricing. 3. Long contract duration (2028) warrants close monitoring. 4. Sector focus on defense manufacturing and logistics.

Value Assessment

Rating: questionable

The contract value of $43.8M for missile spares is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts or potential alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The absence of competition may result in inflated prices, directly impacting taxpayer funds allocated for defense.

Public Impact

Ensures continued operational readiness of critical missile systems. Potential for higher costs due to lack of competitive pressure. Supports a major defense contractor's supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Long contract duration

Positive Signals

Essential for national defense
Supports critical infrastructure

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on missile systems and their components. Spending benchmarks in this niche area are often influenced by technological complexity and national security requirements.

Small Business Impact

The data indicates no specific set-aside for small businesses. This contract likely benefits large prime contractors, with limited direct opportunities for small businesses unless they are subcontractors.

Oversight & Accountability

Given the sole-source nature, robust oversight is crucial to ensure fair pricing and performance. The Defense Logistics Agency should actively monitor contract execution and costs.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award limits price competition.
Long contract duration increases dependency risk.
Potential for cost overruns without competitive pressure.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.8 million to RAYTHEON COMPANY. MISSILE SPARES

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $43.8 million.

What is the period of performance?

Start: 2024-08-16. End: 2028-12-31.

What is the justification for the sole-source award, and has an adequate price analysis been performed?

The justification for a sole-source award is critical for understanding why competition was bypassed. An adequate price analysis would involve comparing the proposed prices to historical data, other government contracts, or commercial price lists to ensure the government is not overpaying. Without this information, the value proposition remains uncertain.

What are the risks associated with relying on a single supplier for critical missile spares over a five-year period?

The primary risks include potential supply chain disruptions if the sole supplier faces production issues, price escalations due to lack of leverage, and reduced innovation. Over a five-year period, this dependency could become a significant vulnerability if not actively managed through close monitoring and contingency planning.

How will the effectiveness of this contract be measured, particularly in terms of ensuring timely delivery and quality of missile spares?

Effectiveness will be measured through key performance indicators (KPIs) such as on-time delivery rates, defect rates, and adherence to technical specifications. The Defense Logistics Agency must establish clear metrics and conduct regular performance reviews to ensure Raytheon meets its contractual obligations and maintains the required quality standards for these critical components.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 350 LOWELL ST, ANDOVER, MA, 01810

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: $43,836,571

Exercised Options: $43,836,571

Current Obligation: $43,836,571

Actual Outlays: $4,397

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $4,221,510

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRBL115D0017

IDV Type: IDC

Timeline