DoD's $532M Excalibur Production Contract Awarded to Raytheon Company in 2007

Contract Overview

Contract Amount: $532,174,385 ($532.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2007-04-05

End Date: 2014-09-30

Contract Duration: 2,735 days

Daily Burn Rate: $194.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY07 BLOCK IA-1 EXCALIBUR PRODUCTION

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $532.2 million to RAYTHEON COMPANY for work described as: FY07 BLOCK IA-1 EXCALIBUR PRODUCTION Key points: 1. Significant investment in advanced munitions. 2. Sole-source award to Raytheon raises competition concerns. 3. Long contract duration (2007-2014) may impact price competitiveness. 4. Ammunition manufacturing is a critical defense sector.

Value Assessment

Rating: fair

The contract value of $532M over 7 years is substantial. Without competitive benchmarks, assessing pricing fairness is difficult, especially given the sole-source nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

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

Taxpayer Impact: The lack of competition likely resulted in higher prices than a competitive process would have yielded, impacting taxpayer value.

Public Impact

Taxpayers funded a major munitions production program. The contract supported advanced military technology development and deployment. Long-term commitment to a single supplier raises questions about innovation and cost control.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration

Positive Signals

Production of critical defense asset
Established supplier relationship

Sector Analysis

This contract falls within the defense sector, specifically ammunition manufacturing. Spending in this area is driven by military readiness requirements and technological advancements.

Small Business Impact

The data indicates this was a large prime contract awarded to Raytheon Company, with no indication of small business subcontracting participation. Further investigation into subcontracting is warranted.

Oversight & Accountability

The sole-source nature of this contract warrants scrutiny regarding the justification for not competing. Oversight should focus on ensuring fair pricing and performance throughout the contract's life.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing due to no competition
Long contract duration may reduce cost efficiency
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $532.2 million to RAYTHEON COMPANY. FY07 BLOCK IA-1 EXCALIBUR PRODUCTION

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $532.2 million.

What is the period of performance?

Start: 2007-04-05. End: 2014-09-30.

What was the justification for awarding this contract on a sole-source basis?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services, or when there's a compelling urgency. For the Excalibur program, this could relate to unique technological capabilities or specific developmental stages that only Raytheon possessed at the time of award.

How did the lack of competition impact the final cost of the Excalibur rounds?

Without competitive bidding, Raytheon had less incentive to offer the lowest possible price. The government's ability to negotiate favorable terms is diminished in sole-source situations, potentially leading to a higher per-unit cost compared to what might have been achieved through a competitive process.

Were there any performance issues or cost overruns during the contract's execution?

The provided data does not detail performance or cost overruns. However, long-duration, sole-source contracts, especially for complex systems like advanced munitions, can be susceptible to scope creep and price increases if not rigorously managed and overseen by the contracting agency.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1151 E HERMANS RD, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $543,327,486

Exercised Options: $543,327,486

Current Obligation: $532,174,385

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline