DoD Awards $417.8M Javelin Missile Contract to Raytheon/Lockheed Martin JV, Undisclosed Competition

Contract Overview

Contract Amount: $417,791,072 ($417.8M)

Contractor: Raytheon/Lockheed Martin Javelin JV

Awarding Agency: Department of Defense

Start Date: 2004-01-25

End Date: 2026-06-30

Contract Duration: 8,192 days

Daily Burn Rate: $51.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $417.8 million to RAYTHEON/LOCKHEED MARTIN JAVELIN JV for work described as: Key points: 1. Significant contract value of over $417 million for Javelin missile systems. 2. Sole-source award to a joint venture of major defense contractors raises competition concerns. 3. Long contract duration (2004-2026) suggests a sustained need for these systems. 4. The sector is dominated by a few large players, limiting competitive options.

Value Assessment

Rating: questionable

The contract's value is substantial, but without clear competition, assessing its value for money is difficult. Benchmarking against similar missile system contracts would be necessary for a more precise evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

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

Taxpayer Impact: The absence of competition likely results in higher prices than a competed contract, impacting taxpayer funds.

Public Impact

Taxpayers may be overpaying for essential defense equipment due to lack of competition. The long-term nature of the contract could lock in pricing without market adjustments. Dependence on a single joint venture for critical missile systems poses a supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration
High contract value

Positive Signals

Essential defense system
Established contractors

Sector Analysis

The guided missile and space vehicle manufacturing sector is highly specialized and often characterized by limited competition due to high barriers to entry and technological complexity. Spending benchmarks are difficult without specific system comparisons.

Small Business Impact

This contract does not appear to involve small businesses, as it is awarded to a joint venture of major defense contractors. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and performance. Accountability for cost overruns or performance issues is crucial given the lack of competitive pressure.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition and price discovery.
Potential for higher costs to taxpayers due to lack of competitive bidding.
Long contract duration may not reflect current market conditions or technological advancements.
Dependence on a single entity for critical defense systems poses a supply chain risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $417.8 million to RAYTHEON/LOCKHEED MARTIN JAVELIN JV. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is RAYTHEON/LOCKHEED MARTIN JAVELIN JV.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $417.8 million.

What is the period of performance?

Start: 2004-01-25. End: 2026-06-30.

What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities or urgent needs. Without competition, the agency must rely on robust negotiation and market research to ensure fair pricing. Regular reviews and cost analyses are essential to monitor expenditures and prevent potential overpricing, ensuring taxpayer funds are used efficiently for critical defense assets.

What are the long-term risks associated with relying on a single joint venture for Javelin missile production?

The primary risks include supply chain vulnerability, potential price escalation without competitive pressure, and reduced innovation. If the joint venture faces production issues, financial instability, or decides to increase prices significantly, the Department of Defense has limited alternatives. This dependence could also stifle the development of alternative or improved missile technologies from other potential manufacturers.

How does the performance of this contract compare to industry benchmarks for similar guided missile systems?

Without access to specific performance metrics and cost data, a direct comparison to industry benchmarks is challenging. However, the lack of competition suggests that performance may not be driven by market forces as effectively as in a competed scenario. The agency should conduct regular performance reviews and compare costs against available market intelligence for similar systems to ensure effectiveness and value.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

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

Address: 1151 E HERMANS RD BLDG 80, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $416,571,194

Exercised Options: $416,571,194

Current Obligation: $417,791,072

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline