DoD awards Raytheon $34.7M for Patriot missile system support, a sole-source contract

Contract Overview

Contract Amount: $34,741,366 ($34.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-09-25

End Date: 2029-07-31

Contract Duration: 1,405 days

Daily Burn Rate: $24.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT TO SUPPORT THE MD6 PATRIOT MISSILE SYSTEM

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $34.7 million to RAYTHEON COMPANY for work described as: PROCUREMENT TO SUPPORT THE MD6 PATRIOT MISSILE SYSTEM Key points: 1. Contract awarded to a single vendor suggests limited market competition. 2. Long-term contract duration indicates a sustained need for missile system sustainment. 3. Firm Fixed Price contract type shifts cost risk to the contractor. 4. Procurement supports critical defense capabilities for national security. 5. Contract value represents a portion of broader defense spending on missile defense systems.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source procurements for similar missile system support. The $34.7 million award over approximately four years suggests a significant but not exceptionally high annual spend for sustainment of a major weapons system. Further analysis would require understanding the scope of services and parts included, as well as historical pricing trends for this specific system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the sole manufacturer of a critical component. The lack of competition means the government did not solicit bids from multiple vendors, potentially limiting price discovery and negotiation leverage.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as competitive pressures are absent. The government must rely on robust negotiation and oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are the U.S. Department of Defense, ensuring readiness of the Patriot missile defense system. Services include sustainment, maintenance, and potentially spare parts for the Patriot system. Geographic impact is national, supporting military readiness across various operational theaters. Workforce implications include specialized technical roles for maintaining advanced missile systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competed contract.
Sole-source awards require strong justification and oversight to prevent potential overpricing.
Dependence on a single contractor can create supply chain risks if the contractor faces issues.

Positive Signals

Award to Raytheon, a known defense contractor with established expertise in missile systems.
Firm Fixed Price contract structure provides cost certainty for the government.
Long contract duration suggests a stable, long-term need for critical defense capabilities.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on missile systems manufacturing and support. The market for advanced air and missile defense systems is highly specialized, often dominated by a few large prime contractors. Spending in this area is driven by national security priorities and evolving threat landscapes. Comparable spending benchmarks would involve analyzing other major weapons system sustainment contracts within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, there are no direct subcontracting implications for small businesses mandated by this specific award. However, the prime contractor may engage small businesses for specific components or services, but this is not a requirement of the contract itself.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), ensuring compliance with contract terms and financial accountability. Transparency is facilitated through contract databases, though detailed performance metrics may not always be publicly available for national security reasons. The Inspector General of the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Patriot Missile System
Missile Defense Systems
Air Defense Systems
Department of Defense Procurement
Defense Logistics Agency Contracts

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for cost overruns in long-term sustainment contracts.
Dependence on a single contractor for critical defense capability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.7 million to RAYTHEON COMPANY. PROCUREMENT TO SUPPORT THE MD6 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 $34.7 million.

What is the period of performance?

Start: 2025-09-25. End: 2029-07-31.

What is Raytheon Company's track record with the Patriot missile system and similar defense contracts?

Raytheon Company, now part of RTX Corporation, has a long and established history as the prime contractor for the Patriot missile system. They have been responsible for its development, production, and sustainment for decades. Their track record includes numerous upgrades and modifications to the system to maintain its effectiveness against evolving threats. Raytheon also holds numerous other large defense contracts across various platforms and weapon systems, demonstrating significant experience in managing complex, high-value government procurements. This extensive experience suggests a high level of technical expertise and program management capability relevant to this specific contract.

How does the value of this contract compare to other Patriot missile system support contracts or similar defense sustainment efforts?

The $34.7 million award for approximately four years of support for the MD6 Patriot Missile System represents an average annual value of roughly $8.7 million. This figure needs to be contextualized against the overall lifecycle cost of the Patriot system, which runs into billions of dollars. Compared to other major defense sustainment contracts for complex weapon systems (e.g., aircraft, naval vessels, other missile defense platforms), this contract appears to be of moderate value. However, without detailed scope of work and specific performance metrics, a direct comparison of value-for-money is difficult. Sole-source contracts often carry a premium compared to competed ones, which should be factored into any value assessment.

What are the primary risks associated with this sole-source contract for Patriot missile system support?

The primary risk associated with this sole-source contract is the potential for elevated costs due to the lack of competition. Without competing bids, Raytheon may not be incentivized to offer the lowest possible price. Another risk is contractor dependency; the DoD becomes reliant on Raytheon for critical sustainment, potentially creating vulnerabilities if the contractor experiences production issues, financial instability, or changes in strategic focus. Furthermore, the long duration of the contract (ending July 2029) means that potential cost overruns or performance issues could persist for an extended period, impacting readiness and budget predictability.

What is the expected effectiveness or program outcome of this contract for the Patriot missile system?

The expected outcome of this contract is the continued operational readiness and effectiveness of the Patriot missile defense system. This includes ensuring the system can perform its intended mission of intercepting tactical ballistic missiles, cruise missiles, and advanced aircraft. Effective sustainment ensures that the system remains technologically relevant through potential upgrades or maintenance, and that spare parts are available when needed. The contract aims to maintain the system's reliability and availability, thereby supporting U.S. national security objectives and protecting deployed forces and critical assets.

What have been historical spending patterns for Patriot missile system support, and how does this award fit in?

Historical spending on the Patriot missile system, including its acquisition and sustainment, has been substantial, reflecting its critical role in U.S. air and missile defense strategy. Over the years, the DoD has awarded numerous contracts to Raytheon for various aspects of the Patriot system, ranging from new production to upgrades and long-term sustainment. This $34.7 million award represents a continuation of this historical spending pattern, focusing specifically on the sustainment phase. It is likely part of a larger, multi-year strategy for maintaining the Patriot fleet, and its value should be viewed in the context of cumulative spending on the system over its operational life.

Are there any specific performance metrics or Key Performance Indicators (KPIs) associated with this contract that indicate its success?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, typical KPIs for defense sustainment contracts often include metrics such as system availability rates, mean time between failures (MTBF), mean time to repair (MTTR), on-time delivery of parts and services, and adherence to maintenance schedules. For a sole-source contract, the government would rely heavily on robust contract surveillance and performance monitoring by the Defense Contract Management Agency (DCMA) to ensure Raytheon meets its obligations. The absence of publicly available KPIs makes a detailed assessment of performance difficult.

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: 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: $34,741,366

Exercised Options: $34,741,366

Current Obligation: $34,741,366

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $128,921

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