DoD's $47.2M Raytheon Contract for Guided Missiles: Sole-Source Award Raises Concerns

Contract Overview

Contract Amount: $47,198,697 ($47.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-06-23

End Date: 2013-02-28

Contract Duration: 1,346 days

Daily Burn Rate: $35.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UCA

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $47.2 million to RAYTHEON COMPANY for work described as: UCA Key points: 1. Significant spending on guided missile manufacturing by the Department of the Army. 2. Sole-source award to Raytheon Company limits competitive pricing and innovation. 3. Contract duration of over three years suggests a substantial, ongoing need. 4. The lack of competition is a key risk factor for taxpayer value.

Value Assessment

Rating: questionable

The contract value of $47.2 million for guided missile manufacturing is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar defense systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was considered. This approach bypasses the competitive process, potentially leading to higher prices and reduced pressure for cost efficiency.

Taxpayer Impact: The absence of competition in this sole-source award means taxpayers may not be receiving the best possible price for these critical defense assets.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. Reliance on a single supplier could create vulnerabilities in the supply chain. The substantial investment in missile technology highlights national defense priorities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
No small business participation

Positive Signals

Essential defense procurement
Long-term contract provides stability

Sector Analysis

This contract falls within the defense manufacturing sector, specifically guided missile and space vehicle production. Spending in this area is critical for national security, but often involves high costs and complex procurement processes.

Small Business Impact

The data indicates no small business participation in this contract. This is common in large, specialized defense contracts but represents a missed opportunity for small business growth and innovation within the defense industrial base.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price paid was fair and reasonable, and that the justification for not competing was sound.

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 competition.
Potential for overpayment due to lack of competitive bidding.
No small business participation.
Contract awarded prior to 2010, potentially outdated pricing.
Long contract duration may not reflect current market conditions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.2 million to RAYTHEON COMPANY. UCA

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 $47.2 million.

What is the period of performance?

Start: 2009-06-23. End: 2013-02-28.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or the unavailability of alternative sources. For this specific contract, the Department of Defense would need to provide documentation detailing why Raytheon was the only viable option, potentially citing proprietary technology or specific performance requirements that only they could meet.

How does the unit cost of these guided missiles compare to similar systems procured competitively?

Without access to Raytheon's pricing structure and comparative market data for similar guided missile systems, it is impossible to definitively assess the unit cost. A sole-source award inherently limits the ability to benchmark against competitive offerings, making a direct comparison challenging and potentially masking inefficiencies.

What is the long-term strategic risk associated with relying solely on Raytheon for this specific missile system?

The long-term strategic risk includes potential supply chain disruptions if Raytheon faces production issues, and a lack of incentive for Raytheon to innovate or reduce costs aggressively. It also limits the government's flexibility to switch to potentially superior or more cost-effective systems developed by competitors in the future.

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

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,198,697

Exercised Options: $47,198,697

Current Obligation: $47,198,697

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline