DoD Awards Raytheon $75M for Mid-Range Munition R&D Amidst Ammunition Manufacturing Spending
Contract Overview
Contract Amount: $74,959,988 ($75.0M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2007-12-20
End Date: 2013-12-31
Contract Duration: 2,203 days
Daily Burn Rate: $34.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: INITIAL INCREMENTAL FUNDING FOR THE MID-RANGE MUNITION (MRM) PROGRAM - SDD R&D PHASE.
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756, UNITED STATES OF AMERICA
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $75.0 million to RAYTHEON COMPANY for work described as: INITIAL INCREMENTAL FUNDING FOR THE MID-RANGE MUNITION (MRM) PROGRAM - SDD R&D PHASE. Key points: 1. Significant R&D investment in advanced munitions. 2. Raytheon Company is the sole awardee, raising questions about competition. 3. Cost-plus contracts can pose risks if not managed tightly. 4. Spending falls within the defense sector's R&D and manufacturing categories.
Value Assessment
Rating: questionable
The contract is a Cost Plus Incentive Fee (CPIF) type, which can lead to cost overruns if not carefully monitored. The initial award amount is substantial for an R&D phase.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While the contract states 'FULL AND OPEN COMPETITION', the award is to a single entity, Raytheon Company. This suggests a competitive bidding process occurred, but the specific details of price discovery and how Raytheon's price was determined are not detailed.
Taxpayer Impact: Taxpayer funds are being invested in developing advanced defense capabilities, which could have long-term security benefits, but the cost-effectiveness of this specific award needs scrutiny.
Public Impact
Investment in next-generation military technology. Potential for job creation in defense manufacturing. Enhances national defense capabilities. Funds allocated to a specific R&D phase, indicating a longer-term program.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus contract type
- Sole awardee despite stated full and open competition
- Lack of detailed cost breakdown for R&D phase
Positive Signals
- Investment in critical defense technology
- Potential for technological advancement
- Awarded to a known defense contractor
Sector Analysis
This contract falls under the 'Ammunition (except Small Arms) Manufacturing' sector, specifically for Research, Development, Testing, and Evaluation (R&D). Spending in this area is crucial for maintaining technological superiority in defense.
Small Business Impact
The data indicates no specific set-aside for small businesses. Large defense contracts like this often involve prime contractors who may subcontract, but direct small business participation is not evident from this award.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The CPIF structure necessitates robust oversight to ensure costs are reasonable and performance targets are met.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost-plus contract type can lead to cost overruns.
- Sole awardee despite 'full and open competition' claim.
- Lack of transparency on price justification.
- Potential for scope creep in R&D phase.
- Limited visibility into small business participation.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, az, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $75.0 million to RAYTHEON COMPANY. INITIAL INCREMENTAL FUNDING FOR THE MID-RANGE MUNITION (MRM) PROGRAM - SDD R&D PHASE.
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $75.0 million.
What is the period of performance?
Start: 2007-12-20. End: 2013-12-31.
What is the projected total cost of the MRM program beyond this initial R&D phase, and how does it compare to similar munition development programs?
The provided data only covers the initial incremental funding for the R&D phase, totaling approximately $75 million. Information on the total program cost or comparisons to similar munition development programs is not available in this dataset. Further analysis would require access to the full program budget and historical data on comparable projects to assess long-term value.
Given the 'full and open competition' designation but a sole awardee, what mechanisms were in place to ensure fair pricing and prevent potential monopolies in future phases?
While the contract states 'full and open competition,' the award to a single entity, Raytheon, warrants scrutiny. Mechanisms like competitive bidding, detailed cost proposals, and independent cost estimates are typically employed. However, the specific price discovery process and how Raytheon's price was validated against market benchmarks or alternative solutions are not detailed here, raising questions about potential future pricing.
How will the effectiveness of the Mid-Range Munition (MRM) be measured during the SDD R&D phase, and what are the key performance indicators for this contract?
The effectiveness of the MRM during the SDD R&D phase would typically be measured against specific technical performance parameters outlined in the contract's Statement of Work (SOW). Key performance indicators (KPIs) would likely include accuracy, range, lethality, reliability, and integration capabilities. The CPIF structure suggests incentives tied to achieving these performance goals within cost constraints.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 1151 E HERMANS RD, TUCSON, AZ, 85756
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: $549,849,273
Exercised Options: $230,100,717
Current Obligation: $74,959,988
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2007-12-20
Current End Date: 2013-12-31
Potential End Date: 2013-12-31 00:00:00
Last Modified: 2016-02-29
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