DoD awards $81.8M Raytheon contract for Patriot missile system hardware to support Ukraine

Contract Overview

Contract Amount: $81,785,234 ($81.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-08-29

End Date: 2029-09-30

Contract Duration: 1,493 days

Daily Burn Rate: $54.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER UCA FOR UKRAINE HARDWARE TO SUPPORT THE PATRIOT MISSILE SYSTEM.

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $81.8 million to RAYTHEON COMPANY for work described as: DELIVERY ORDER UCA FOR UKRAINE HARDWARE TO SUPPORT THE PATRIOT MISSILE SYSTEM. Key points: 1. Contract awarded to Raytheon Company for critical hardware for the Patriot missile system. 2. This contract is a delivery order under an existing contract vehicle. 3. The contract has a long performance period, extending through September 2029. 4. The firm-fixed-price contract type aims to control costs for the government. 5. The procurement was not competed, raising questions about price discovery and potential value. 6. The contract supports U.S. efforts to provide hardware to Ukraine. 7. The value of the contract is significant, reflecting the importance of the Patriot system.

Value Assessment

Rating: fair

The contract value of $81.8 million for Patriot missile system hardware is substantial. Without specific details on the hardware components or quantities, direct benchmarking against similar contracts is challenging. However, given the critical nature and advanced technology of the Patriot system, pricing is expected to be high. The firm-fixed-price structure provides some cost certainty, but the lack of competition means there's no direct market comparison to assess if this represents the best possible value for the taxpayer.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a delivery order under an existing contract vehicle and was not competed. This indicates that the Defense Logistics Agency likely leveraged a pre-negotiated agreement, potentially for expediency or because Raytheon is the sole provider of certain specialized components or systems. The lack of open competition limits the opportunity for multiple vendors to bid, which could have driven down prices through a more competitive bidding process.

Taxpayer Impact: The absence of competition means taxpayers may not be benefiting from the lowest possible price that could have been achieved through a bidding war among multiple qualified suppliers.

Public Impact

The primary beneficiaries are U.S. military operations and the government of Ukraine, which will receive critical hardware. The services delivered involve the provision of hardware essential for the functioning and maintenance of the Patriot missile defense system. The geographic impact is global, supporting U.S. defense initiatives and security assistance to Ukraine. Workforce implications are likely within Raytheon's manufacturing and supply chain operations, potentially sustaining jobs in these areas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a fully competed contract.
Long contract duration could introduce risks related to obsolescence or changing requirements.
Reliance on a single source for critical hardware can create supply chain vulnerabilities.

Positive Signals

Firm-fixed-price contract type helps to cap government liability for cost overruns.
Awarding to Raytheon, a known entity with expertise in this system, suggests a degree of reliability.
Contract supports a critical national security objective related to defense aid for Ukraine.

Sector Analysis

The defense sector, particularly missile systems manufacturing, is characterized by high technological barriers to entry and significant government investment. Contracts for advanced systems like the Patriot are often awarded to a limited number of prime contractors with specialized expertise. The market size for such systems is substantial, driven by global defense spending and geopolitical needs. This contract fits within the broader category of strategic weapon systems procurement, where sole-source or limited competition is not uncommon due to proprietary technology or existing platform integration.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the 'ss' and 'sb' fields being false. Raytheon Company is a large defense contractor. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem for this particular award is unclear, though large prime contractors often utilize small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Logistics Agency. As a delivery order under an existing contract vehicle, some level of oversight and negotiation has likely already occurred. Transparency is moderate; while the award is public, the specifics of the 'not competed' justification and detailed pricing are not readily available. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Patriot Missile System Procurement
Foreign Military Sales (FMS) - Ukraine
Defense Logistics Agency (DLA) Contracts
Raytheon Company Defense Contracts
Strategic Weapon Systems

Risk Flags

Non-competitive award
Potential for elevated pricing due to lack of competition
Long performance period extending over multiple fiscal years

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.8 million to RAYTHEON COMPANY. DELIVERY ORDER UCA FOR UKRAINE HARDWARE TO SUPPORT THE PATRIOT MISSILE SYSTEM.

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 $81.8 million.

What is the period of performance?

Start: 2025-08-29. End: 2029-09-30.

What specific hardware components are being procured under this delivery order, and what is the justification for not competing this award?

The provided data indicates the contract is for 'DELIVERY ORDER UCA FOR UKRAINE HARDWARE TO SUPPORT THE PATRIOT MISSILE SYSTEM.' However, the specific hardware components are not detailed. The contract type is listed as 'NOT COMPETED,' suggesting that the Defense Logistics Agency (DLA) utilized an existing contract vehicle without soliciting new offers. Justifications for non-competition typically include factors like urgency, the unavailability of other sources, or the need to maintain compatibility with existing systems where only one source can meet the requirement. For a system as complex as the Patriot, it's plausible that specific components or upgrades are only available from the original manufacturer, Raytheon, or that the urgency of supporting Ukraine necessitated rapid procurement through an established channel.

How does the $81.8 million contract value compare to historical spending on similar Patriot missile system hardware procurements?

Directly comparing the $81.8 million value to historical spending on 'similar' Patriot hardware is challenging without granular data on the specific components and quantities. Patriot system procurements can vary widely in cost depending on whether they involve new missile production, upgrades to existing systems, spare parts, or support equipment. Raytheon has received numerous contracts for the Patriot system over the years, with individual awards ranging from millions to billions of dollars. This $81.8 million delivery order appears to be for specific hardware to support Ukraine, suggesting it might be a component of a larger support package. Benchmarking would require understanding if this represents a standard replenishment of parts, a specific upgrade, or a unique set of components.

What are the key performance indicators (KPIs) or metrics used to assess the successful delivery and performance of this hardware?

The provided data does not specify the Key Performance Indicators (KPIs) or metrics for this particular delivery order. However, for defense hardware contracts, especially those involving critical systems like the Patriot, performance is typically assessed based on several factors. These often include adherence to delivery schedules, meeting technical specifications and quality standards (e.g., reliability, durability, operational readiness), successful integration into the existing Patriot system, and compliance with contractual terms. Acceptance testing by the government would be a crucial step in verifying that the delivered hardware meets all required specifications before final payment is made. The firm-fixed-price nature of the contract also implies that meeting these specifications is paramount for the contractor to receive full payment.

What is Raytheon Company's track record with the Department of Defense, particularly concerning Patriot missile system contracts?

Raytheon Company (now RTX Corporation) has an extensive and long-standing track record with the Department of Defense, particularly as the prime contractor for the Patriot missile defense system. They have been responsible for the development, production, and sustainment of the Patriot system for decades. Their history includes numerous large-scale contracts for various configurations and upgrades of the Patriot, both for the U.S. military and for allied nations through Foreign Military Sales. While specific performance details for every contract are not publicly available, Raytheon is generally considered a highly capable and experienced provider of complex defense systems. However, like any major defense contractor, they have likely faced scrutiny over pricing, delivery schedules, and technical performance on various programs throughout their history.

Given the 'NOT COMPETED' status, what are the potential risks associated with this procurement strategy for the government?

The primary risk associated with a 'NOT COMPETED' procurement strategy is the potential for paying a higher price than could be achieved through open competition. Without multiple bids, the government loses the benefit of price discovery driven by market forces. This can lead to reduced value for taxpayer money. Additionally, non-competitive awards can sometimes mask inefficiencies or a lack of urgency from the contractor, as there is less external pressure to perform optimally. There's also a risk that the government might miss out on innovative solutions or alternative technologies that could be offered by other potential suppliers if the market were opened up. For critical systems like the Patriot, ensuring a robust and competitive supply chain, where feasible, is important for long-term sustainment and cost management.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $81,785,234

Exercised Options: $81,785,234

Current Obligation: $81,785,234

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