DoD Awards $219M for PATRIOT Missile Spares to Raytheon, Raising Oversight Concerns
Contract Overview
Contract Amount: $21,882,725 ($21.9M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2024-09-17
End Date: 2029-02-28
Contract Duration: 1,625 days
Daily Burn Rate: $13.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PATRIOT MISSILE SPARES PROCUREMENT
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $21.9 million to RAYTHEON COMPANY for work described as: PATRIOT MISSILE SPARES PROCUREMENT Key points: 1. Significant contract value of $218.8M for critical missile spares. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Long contract duration (2024-2029) may impact price flexibility. 4. Procurement falls under Defense Logistics Agency, supporting national security.
Value Assessment
Rating: questionable
The contract's value is substantial for missile spares. Without competition, it's difficult to assess if the firm fixed price represents fair market value compared to potential bids from other qualified manufacturers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon Company. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for essential missile spares could result in inflated prices, directly impacting taxpayer funds allocated for defense.
Public Impact
Ensures continued operational readiness of the PATRIOT missile defense system. Supports a key defense contractor, potentially impacting jobs and supply chains. Highlights potential for increased defense spending without competitive pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Critical national security asset procurement
- Supports established defense industrial base
Sector Analysis
This procurement falls within the Defense sector, specifically for advanced weapon systems. Spending benchmarks for such specialized components are often high due to R&D and manufacturing complexity, but competition is key to controlling costs.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this sole-source contract. Large defense contracts often bypass smaller entities unless specifically included.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the pricing is justified and that future procurements explore competitive options where feasible to maximize value.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Potential for overpayment due to lack of competition.
- Risk of supply chain disruption from single-source dependency.
- Limited transparency on cost justification.
- Long contract duration may not reflect market changes.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.9 million to RAYTHEON COMPANY. PATRIOT MISSILE SPARES PROCUREMENT
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 $21.9 million.
What is the period of performance?
Start: 2024-09-17. End: 2029-02-28.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, without competitive bidding, rigorous internal review and benchmarking are crucial to validate the firm fixed price. Agencies should document the rationale thoroughly and explore opportunities for future competition or price negotiation.
What are the long-term risks associated with relying on a single supplier for critical missile spares, particularly regarding supply chain resilience and cost escalation?
Sole-source reliance creates significant supply chain risk; disruptions at the supplier can halt production or delivery. It also removes competitive pressure, potentially leading to sustained price increases over the contract's lifespan. This can strain defense budgets and reduce the overall value for taxpayer investment in national security.
How does this procurement align with the Department of Defense's goals for maintaining technological superiority and cost-effectiveness in its weapon systems?
While procuring advanced systems like PATRIOT spares supports technological superiority, the sole-source nature raises questions about cost-effectiveness. Ideally, competitive processes drive innovation and efficiency. This award suggests a potential trade-off where immediate availability or specific capabilities outweigh the benefits of competitive price discovery, requiring careful justification.
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: ELECTRICAL/ELECTRONIC EQPT COMPNTS
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: $21,882,725
Exercised Options: $21,882,725
Current Obligation: $21,882,725
Subaward Activity
Number of Subawards: 23
Total Subaward Amount: $6,405,435
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
Start Date: 2024-09-17
Current End Date: 2029-02-28
Potential End Date: 2029-02-28 00:00:00
Last Modified: 2025-04-26
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