Raytheon Awarded $246M Patriot SAM-X Contract to Republic of Korea Air Force
Contract Overview
Contract Amount: $246,153,543 ($246.2M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2008-03-28
End Date: 2011-10-31
Contract Duration: 1,312 days
Daily Burn Rate: $187.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: REPUBLIC OF KOREA AIR FORCE (ROKAD) FOR THE PATRIOT (SAM-X) PROGRAM
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $246.2 million to RAYTHEON COMPANY for work described as: REPUBLIC OF KOREA AIR FORCE (ROKAD) FOR THE PATRIOT (SAM-X) PROGRAM Key points: 1. Significant contract value of $246M for advanced missile defense. 2. Sole-source award to Raytheon Company, limiting competitive pricing. 3. Potential risk in long-term sustainment and technology obsolescence. 4. Sector focus on Defense, specifically guided missile manufacturing.
Value Assessment
Rating: fair
The contract value of $246M is substantial for a missile system. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar systems or previous Patriot procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning no competition was sought. This significantly impacts price discovery, as the government did not leverage competitive pressures to achieve the best possible price.
Taxpayer Impact: The lack of competition raises concerns about taxpayer value, as the full potential for cost savings through bidding was not realized.
Public Impact
Enhances air defense capabilities for an allied nation. Supports advanced missile manufacturing and defense technology. Represents a significant foreign military sale for the US defense industry.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Long contract duration may lead to cost overruns.
- Potential for sustainment costs to exceed initial procurement.
Positive Signals
- Provides critical defense capability to an ally.
- Leverages established Patriot missile system technology.
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of guided missiles and space vehicles. Spending in this area is critical for national security and maintaining technological superiority, often involving high-value, specialized procurements.
Small Business Impact
There is no indication that small businesses were involved in this specific contract award, as it was a direct award to a large prime contractor for a complex defense system.
Oversight & Accountability
As a sole-source award for a foreign military sale, oversight would likely focus on contract performance, delivery schedules, and ensuring the technology transfer meets agreed-upon terms, with potential oversight from both the Department of the Army and the Republic of Korea.
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 competitive pricing
- Potential for high sustainment costs
- Long contract duration
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, ma, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $246.2 million to RAYTHEON COMPANY. REPUBLIC OF KOREA AIR FORCE (ROKAD) FOR THE PATRIOT (SAM-X) PROGRAM
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 $246.2 million.
What is the period of performance?
Start: 2008-03-28. End: 2011-10-31.
What was the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or specific program requirements that only one contractor can meet. For the Patriot SAM-X program, the rationale likely centered on the established performance and integration of the Raytheon-produced Patriot system. However, without detailed documentation, it's unclear if alternative competitive strategies were thoroughly explored or deemed infeasible.
How does the per-unit cost of this Patriot system compare to other international sales or domestic procurements?
Benchmarking the per-unit cost is challenging without access to specific pricing details and configurations for comparable contracts. Foreign Military Sales (FMS) pricing can vary based on quantity, support packages, and specific country requirements. A comprehensive analysis would require comparing this contract's unit price against other Patriot sales to different nations and any domestic US Army procurements of similar configurations.
What are the long-term sustainment and upgrade cost implications for the Republic of Korea Air Force?
Long-term sustainment and upgrade costs for advanced missile systems like Patriot can be substantial and often exceed the initial procurement price. This includes costs for spare parts, maintenance, training, software updates, and potential future technology enhancements. The Republic of Korea Air Force will need to budget for these ongoing expenses to ensure the system remains operational and effective throughout its lifecycle.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 350 LOWELL ST, ANDOVER, MA, 01810
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $246,153,543
Exercised Options: $246,153,543
Current Obligation: $246,153,543
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-03-28
Current End Date: 2011-10-31
Potential End Date: 2011-10-31 12:10:00
Last Modified: 2025-05-14
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