DoD's $44.3M Javelin Missile Contract Awarded to Raytheon/Lockheed Martin JV Lacked Competition

Contract Overview

Contract Amount: $44,270,520 ($44.3M)

Contractor: Raytheon/Lockheed Martin Javelin JV

Awarding Agency: Department of Defense

Start Date: 2004-03-31

End Date: 2013-03-31

Contract Duration: 3,287 days

Daily Burn Rate: $13.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $44.3 million to RAYTHEON/LOCKHEED MARTIN JAVELIN JV for work described as: Key points: 1. The contract awarded to a joint venture of two major defense contractors highlights a lack of competition in a critical weapons system. 2. The Javelin missile system is a key component of U.S. Army ground forces, making its procurement strategy significant. 3. The sole-source nature of this award raises questions about potential price inflation and missed opportunities for cost savings. 4. This procurement falls within the Guided Missile and Space Vehicle Manufacturing sector, characterized by high R&D costs and specialized production.

Value Assessment

Rating: questionable

The contract type (Cost Plus Award Fee) can incentivize contractor performance but also carries inherent risks of cost overruns if not managed tightly. Without competitive benchmarks, assessing the value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.

Taxpayer Impact: The lack of competition likely resulted in higher costs for the Javelin missile system, meaning taxpayers may have paid more than necessary for this critical defense asset.

Public Impact

Ensures continued supply of a vital anti-tank weapon system for ground troops. Potential for higher costs due to lack of competitive bidding. Limited transparency on pricing mechanisms due to sole-source nature. Impacts the defense industrial base by consolidating production with established prime contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Sole-Source Award
Cost Plus Award Fee Contract Type

Positive Signals

Ensures supply of critical defense asset
Awarded to established prime contractors with proven capabilities

Sector Analysis

This contract falls under the Guided Missile and Space Vehicle Manufacturing sector. Spending in this sector is often characterized by long-term development cycles, high R&D investment, and significant reliance on a few specialized contractors, making competition challenging but crucial for cost control.

Small Business Impact

The data indicates this contract was awarded to a joint venture of large prime contractors (Raytheon/Lockheed Martin) and does not show any indication of subcontracting opportunities for small businesses. This suggests limited direct benefit to the small business sector from this specific award.

Oversight & Accountability

The 'NOT COMPETED' status suggests that standard competitive procedures were bypassed. Oversight would be critical to ensure the justification for the sole-source award was valid and that the government negotiated the best possible terms under the circumstances.

Related Government Programs

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

Risk Flags

Sole-source award limits price discovery.
Cost Plus Award Fee contract type can lead to cost overruns.
Lack of transparency in pricing due to non-competitive nature.
Potential for reduced innovation without competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.3 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 $44.3 million.

What is the period of performance?

Start: 2004-03-31. End: 2013-03-31.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or the unavailability of other sources. Without further documentation, it's unclear if alternative competitive strategies were explored. The government should have robust documentation justifying why competition was not feasible to ensure taxpayer funds are used efficiently and effectively.

How does the Cost Plus Award Fee structure impact the final cost and contractor incentive compared to other contract types for similar defense systems?

Cost Plus Award Fee (CPAF) contracts reimburse allowable costs plus a fee that is composed of a base amount and an award amount. While CPAF can incentivize contractor performance, it carries a higher risk of cost growth than fixed-price contracts. The award fee component aims to motivate efficiency, but effective oversight is crucial to prevent cost overruns and ensure the award criteria align with desired outcomes.

What is the long-term strategy for ensuring competitive sourcing for future Javelin missile procurements or similar weapon systems?

A long-term strategy should focus on fostering competition within the defense industrial base, potentially through encouraging new entrants, developing alternative technologies, or breaking down complex systems into components that can be procured competitively. For critical systems like the Javelin, the Department of Defense should proactively plan for future competitions to drive innovation and cost savings.

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: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Raytheon Company (UEI: 001339159)

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

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline