DoD Awards $91M for Stinger Missiles to Raytheon for Taiwan FMS, Lacking Competition

Contract Overview

Contract Amount: $91,287,310 ($91.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-06-23

End Date: 2015-02-28

Contract Duration: 2,076 days

Daily Burn Rate: $44.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: STINGER MISSILES, AIR-TO-AIR LAUNCHERS, AND ASSOCIATED SPARES FOR TAIWAN FMS

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $91.3 million to RAYTHEON COMPANY for work described as: STINGER MISSILES, AIR-TO-AIR LAUNCHERS, AND ASSOCIATED SPARES FOR TAIWAN FMS Key points: 1. Significant award of $91.3M for critical defense equipment. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Foreign Military Sales (FMS) program highlights international defense cooperation. 4. High value contract in the Guided Missile and Space Vehicle Manufacturing sector.

Value Assessment

Rating: fair

The contract value of $91.3M is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential market alternatives. The benchmark of $4.4M for similar contracts suggests this award might be on the higher side.

Cost Per Unit: $4,397,300

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This lack of competition limits price discovery and potentially leads to higher costs for the government and the recipient nation.

Taxpayer Impact: Taxpayer funds are used for this FMS program, and the absence of competition means less assurance of cost-effectiveness.

Public Impact

Ensures Taiwan's defense capabilities with advanced missile systems. Supports U.S. foreign policy objectives through military aid. Impacts the defense manufacturing sector and supply chains. Potential for increased geopolitical stability in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for overpricing

Positive Signals

Provides critical defense capability to an ally
Supports U.S. foreign policy goals
Long-term contract duration

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of defense. Spending in this sector is often driven by geopolitical needs and technological advancements, with significant R&D investment.

Small Business Impact

The contract was awarded to Raytheon Company, a large prime contractor. There is no indication of small business participation in this specific award, which is common for highly specialized defense systems.

Oversight & Accountability

As a sole-source award for FMS, oversight would involve both the Department of Defense and potentially State Department, ensuring compliance with FMS regulations and U.S. foreign policy. Accountability for cost and performance rests with Raytheon.

Related Government Programs

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

Risk Flags

Lack of competitive bidding
Sole-source award
Potential for inflated pricing
Limited transparency in price negotiation
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.3 million to RAYTHEON COMPANY. STINGER MISSILES, AIR-TO-AIR LAUNCHERS, AND ASSOCIATED SPARES FOR TAIWAN FMS

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 $91.3 million.

What is the period of performance?

Start: 2009-06-23. End: 2015-02-28.

What is the justification for the sole-source award, and were alternative suppliers or competitive options ever considered?

The justification for a sole-source award typically involves unique capabilities, national security concerns, or the absence of viable alternatives. For FMS programs, specific geopolitical considerations and existing relationships with defense manufacturers often play a role. A thorough review would be needed to confirm if competitive options were explored and why they were deemed unsuitable for this specific requirement.

How does the per-unit cost of these Stinger missiles compare to historical FMS sales or domestic procurements of the same system?

Comparing the per-unit cost of $4.4M against historical data is crucial for assessing value. If previous FMS sales or domestic procurements of Stingers were significantly lower, it would raise concerns about the current pricing. Without access to that comparative data, it's difficult to definitively state if the price is fair, but the benchmark suggests potential for higher costs due to the lack of competition.

What are the long-term implications of relying on a single supplier for critical defense assets like Stinger missiles for allied nations?

Long-term reliance on a single supplier can create vulnerabilities, including potential supply chain disruptions, price escalations, and reduced innovation. For allied nations, it can also foster dependency. Diversifying suppliers or ensuring robust long-term agreements with clear cost controls and performance metrics would be beneficial for both the U.S. and its allies.

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: $91,287,310

Exercised Options: $91,287,310

Current Obligation: $91,287,310

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline