DoD's $932M Javelin Missile Contract Awarded to Raytheon/Lockheed Martin JV Under Sole Source

Contract Overview

Contract Amount: $932,328,124 ($932.3M)

Contractor: Raytheon/Lockheed Martin Javelin JV

Awarding Agency: Department of Defense

Start Date: 2004-06-23

End Date: 2012-04-30

Contract Duration: 2,868 days

Daily Burn Rate: $325.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMS CAR

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $932.3 million to RAYTHEON/LOCKHEED MARTIN JAVELIN JV for work described as: FMS CAR Key points: 1. Significant investment in guided missile manufacturing. 2. Dominated by two major defense contractors. 3. Sole-source award raises questions about price discovery and competition. 4. Long contract duration (2004-2012) suggests a stable, long-term program.

Value Assessment

Rating: questionable

The contract value of $932M over 8 years for guided missiles is substantial. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to potential market rates or alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no direct competition to drive down prices.

Taxpayer Impact: The lack of competition in this large contract likely results in a higher cost to taxpayers than a fully competed procurement.

Public Impact

Ensures continued supply of critical Javelin anti-tank missile systems for the U.S. Army. Supports jobs within the defense manufacturing sector, specifically at Raytheon and Lockheed Martin. Potential for advanced missile technology development through sustained funding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Long contract duration

Positive Signals

Critical defense capability
Established contractor base

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a key component of the broader defense industry. Spending in this area is often characterized by high R&D costs, long production cycles, and significant government oversight due to national security implications.

Small Business Impact

The contract was awarded to a joint venture of major defense contractors (Raytheon/Lockheed Martin), indicating no direct benefit or subcontracting opportunities for small businesses were specified in this data. The scale of the award suggests it's beyond the typical scope for small business prime contractors.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and performance. The Department of Defense's contracting process should include mechanisms to periodically review the necessity of sole-source awards and explore competitive alternatives where feasible.

Related Government Programs

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

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited innovation due to no competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $932.3 million to RAYTHEON/LOCKHEED MARTIN JAVELIN JV. FMS CAR

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 $932.3 million.

What is the period of performance?

Start: 2004-06-23. End: 2012-04-30.

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, often due to unique capabilities, proprietary technology, or urgent national security needs. Without specific documentation, the exact justification for this Javelin missile contract remains unclear, but it likely relates to the specialized nature of the weapon system and the established production capabilities of the joint venture.

How does the lack of competition impact the long-term cost-effectiveness of the Javelin missile program?

The absence of competition inherently limits the government's ability to negotiate the best possible price. Over the contract's duration, this can lead to significantly higher per-unit costs compared to a scenario where multiple bidders vied for the contract. While the Javelin is a critical system, sustained sole-source procurement may not be the most cost-effective approach for taxpayers in the long run.

What are the potential risks associated with relying on a single joint venture for such a critical defense asset?

Relying on a single entity, even a joint venture, for a critical defense asset like the Javelin missile introduces risks such as supply chain vulnerabilities, potential for contractor complacency, and limited innovation due to lack of competitive pressure. If the joint venture faces production issues or financial instability, it could disrupt the supply of essential weaponry, posing a national security risk.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

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: Raytheon Company (UEI: 001339159)

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $932,428,124

Exercised Options: $932,328,124

Current Obligation: $932,328,124

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline