DoD Awards $1B+ Letter Contract for Javelin Missile Long-Lead Parts to Raytheon/Lockheed Martin JV

Contract Overview

Contract Amount: $1,006,482,469 ($1.0B)

Contractor: Raytheon/Lockheed Martin Javelin JV

Awarding Agency: Department of Defense

Start Date: 2009-04-08

End Date: 2018-08-30

Contract Duration: 3,431 days

Daily Burn Rate: $293.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LETTER CONTRACT FOR FY09 LONG LEAD PARTS AND LAST TIME BUYS

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $1.01 billion to RAYTHEON/LOCKHEED MARTIN JAVELIN JV for work described as: LETTER CONTRACT FOR FY09 LONG LEAD PARTS AND LAST TIME BUYS Key points: 1. Significant investment in critical missile components. 2. Sole-source award to a joint venture raises competition concerns. 3. Long contract duration (over 9 years) may impact price competitiveness. 4. Focus on 'last time buys' suggests potential obsolescence or supply chain risks.

Value Assessment

Rating: questionable

The contract value is substantial, but the lack of competition and long duration make it difficult to assess value for money without further data on pricing benchmarks for similar long-lead procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

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

Taxpayer Impact: The lack of competition for a $1B+ contract suggests taxpayers may be paying a premium for these critical missile components.

Public Impact

Ensures continued production of essential Javelin anti-tank missile components. Supports readiness for Army ground forces. Potential for long-term reliance on a single supplier for critical parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Long contract duration
Sole-source award

Positive Signals

Ensures supply of critical components
Supports defense readiness

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of defense industrial base. Spending in this sector is often characterized by high R&D costs and limited competition due to unique technological requirements.

Small Business Impact

The contract was awarded to a joint venture of major defense contractors (Raytheon/Lockheed Martin), with no indication of small business participation in this specific award. Subcontracting opportunities for small businesses are not detailed here.

Oversight & Accountability

The long duration and sole-source nature of this contract warrant close oversight to ensure fair pricing and prevent cost overruns. Regular reviews of performance and cost are essential.

Related Government Programs

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

Risk Flags

Lack of competition
Sole-source award
Long contract duration
Potential for cost overruns
Limited transparency on pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.01 billion to RAYTHEON/LOCKHEED MARTIN JAVELIN JV. LETTER CONTRACT FOR FY09 LONG LEAD PARTS AND LAST TIME BUYS

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 $1.01 billion.

What is the period of performance?

Start: 2009-04-08. End: 2018-08-30.

What is the justification for the sole-source award, and were alternative competitive strategies considered?

The data indicates a sole-source award, likely due to the specialized nature of Javelin missile components and the existing partnership between Raytheon and Lockheed Martin. However, the specific justification and any exploration of competitive alternatives are not provided. A thorough review would examine if market research was conducted to identify potential competitors or if the unique requirements necessitated this approach.

How does the pricing structure of this long-lead parts contract compare to industry benchmarks for similar defense components?

Without specific pricing details or comparable contract data, it's challenging to benchmark. However, the lack of competition and the 'last time buy' nature for long-lead items can often lead to premium pricing. Further analysis would require access to detailed cost breakdowns and comparisons with other sole-source or limited-competition procurements for similar advanced missile systems.

What are the potential risks associated with a sole-source award for critical missile components over a nearly decade-long period?

The primary risks include inflated costs due to lack of competition, potential for vendor complacency, and reduced incentive for innovation. There's also a risk of vendor lock-in, making it difficult to switch suppliers if issues arise. Furthermore, the long duration increases exposure to market fluctuations and potential obsolescence of technology if not managed proactively.

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

Solicitation ID: W31P4Q09R0184

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, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,006,482,469

Exercised Options: $1,006,482,469

Current Obligation: $1,006,482,469

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline