DoD Awards $31.5M for Patriot Missile Spares to Raytheon Company, Lacking Competition
Contract Overview
Contract Amount: $31,517,700 ($31.5M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2024-10-03
End Date: 2030-10-31
Contract Duration: 2,219 days
Daily Burn Rate: $14.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PROCUREMENT OF PATRIOT MISSILE SPARES. PRICED ON SPRBL115D0017 P00237.
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $31.5 million to RAYTHEON COMPANY for work described as: PROCUREMENT OF PATRIOT MISSILE SPARES. PRICED ON SPRBL115D0017 P00237. Key points: 1. Significant award for critical missile defense components. 2. Sole reliance on Raytheon for spares raises long-term supply chain concerns. 3. High value contract warrants scrutiny of pricing and necessity. 4. Defense sector spending on sustainment is a consistent budget item.
Value Assessment
Rating: fair
The contract value of $31.5 million for spares is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to potential alternatives or previous pricing.
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 may result in inflated prices, directly impacting taxpayer funds allocated for defense.
Public Impact
Ensures continued operational readiness of the Patriot missile defense system. Supports critical national security infrastructure and deterrence capabilities. Potential for increased costs due to lack of competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Long-term sustainment dependency
Positive Signals
- Supports critical defense system
- Ensures operational readiness
Sector Analysis
This procurement falls within the defense sector, specifically focusing on sustainment and spare parts for a major weapons system. Spending on such items is typical for maintaining readiness but can be costly without competition.
Small Business Impact
This contract does not appear to involve small business participation, as it is a sole-source award to a large prime contractor. Opportunities for small businesses are likely limited to subcontracting roles, if any.
Oversight & Accountability
The sole-source nature of this award suggests limited oversight on price negotiation. Further review of justification for sole-sourcing and price reasonableness is recommended.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Lack of competitive bidding
- Sole-source award
- Potential for inflated pricing
- Long-term vendor dependency
- Limited transparency on price justification
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 $31.5 million to RAYTHEON COMPANY. PROCUREMENT OF PATRIOT MISSILE SPARES. PRICED ON SPRBL115D0017 P00237.
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 $31.5 million.
What is the period of performance?
Start: 2024-10-03. End: 2030-10-31.
What is the justification for awarding this contract on a sole-source basis, and has a price reasonableness analysis been conducted?
The justification for a sole-source award is crucial for understanding why competition was bypassed. Agencies typically require detailed documentation, such as a Justification and Approval (J&A), to support sole-source procurements. A thorough price reasonableness analysis is essential to ensure the government is not overpaying, especially when competitive benchmarks are unavailable.
What are the long-term risks associated with relying solely on Raytheon for Patriot missile spares, particularly regarding obsolescence and future pricing?
Long-term sole-source reliance poses risks of vendor lock-in, potential price escalation as the system ages, and challenges in managing obsolescence. Without competitive pressure, Raytheon may have less incentive to innovate or offer cost reductions. This dependency could also impact the government's ability to secure parts if the prime contractor faces production issues or strategic shifts.
How does the cost of these spares compare to similar sustainment contracts for other major defense systems, and what is the projected lifecycle cost?
Benchmarking against similar sustainment contracts for comparable defense systems is vital for assessing cost-effectiveness. Without this data, it's difficult to determine if the $31.5 million award is reasonable. Understanding the projected lifecycle costs, including maintenance, upgrades, and future spare needs, provides a more comprehensive view of the total investment and potential long-term financial implications.
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: FIRE CONTROL EQPT.
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: $31,517,700
Exercised Options: $31,517,700
Current Obligation: $31,517,700
Subaward Activity
Number of Subawards: 16
Total Subaward Amount: $3,854,222
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: 2024-10-03
Current End Date: 2030-10-31
Potential End Date: 2030-10-31 12:10:00
Last Modified: 2025-04-15
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