Raytheon/Lockheed Martin Javelin JV contract for missile manufacturing valued at $50.6M, awarded via sole-source negotiation

Contract Overview

Contract Amount: $50,598,578 ($50.6M)

Contractor: Raytheon/Lockheed Martin Javelin JV

Awarding Agency: Department of Defense

Start Date: 2014-07-10

End Date: 2018-02-28

Contract Duration: 1,329 days

Daily Burn Rate: $38.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF LCCS UCA

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $50.6 million to RAYTHEON/LOCKHEED MARTIN JAVELIN JV for work described as: IGF::CT::IGF LCCS UCA Key points: 1. The contract was awarded on a sole-source basis, raising questions about potential price overruns and lack of competitive pressure. 2. The firm-fixed-price structure shifts some risk to the government, but the absence of competition limits benchmarking opportunities. 3. Performance duration of 1329 days suggests a long-term need for these missile systems. 4. The contract falls under Guided Missile and Space Vehicle Manufacturing, a critical defense sector. 5. The award value of $50.6 million is significant, necessitating careful oversight to ensure value for taxpayer dollars. 6. The contractor is a joint venture of two major defense primes, indicating substantial experience but also potential for concentrated market power.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized nature of guided missile manufacturing. Without competitive bids, it's difficult to definitively assess if the $50.6 million price represents fair market value. The firm-fixed-price contract type provides some cost certainty, but the lack of competition means the government cannot leverage market forces to drive down costs. Further analysis would require access to internal cost data or comparisons with similar, competitively awarded contracts for comparable systems, which are not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source negotiation, meaning only one contractor was considered. This approach is typically justified when only one responsible source is available or when a compelling reason exists to bypass full and open competition. The absence of multiple bidders means there was no direct price competition, which can lead to higher costs for the government compared to a competitively awarded contract. The specific justification for this sole-source award would need to be examined to understand why other potential manufacturers were not considered.

Taxpayer Impact: Taxpayers may have paid a premium for this missile system due to the lack of competitive bidding. Without competing offers, the government had limited leverage to negotiate the lowest possible price, potentially resulting in a less efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Army warfighters who will receive advanced guided missile systems. The contract delivers essential munitions for national defense and strategic military operations. The manufacturing is located in Arizona, contributing to the state's defense industrial base and workforce. This contract supports specialized jobs within the defense manufacturing sector, requiring skilled labor in engineering and production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could obscure potential inefficiencies.
Reliance on a single joint venture for critical missile systems poses a supply chain risk.
Firm-fixed-price contract, while offering cost certainty, may not reflect the best possible value without competition.

Positive Signals

Award to a joint venture of established defense contractors suggests high technical capability.
Firm-fixed-price contract provides budget predictability for the Department of the Army.
Manufacturing in Arizona supports the domestic defense industrial base.
The contract addresses a critical need for advanced missile systems in the U.S. military.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized and capital-intensive segment of the aerospace and defense industry. It is characterized by long development cycles, stringent quality requirements, and significant government investment. Major players are typically large, established defense contractors. This contract for Javelin missiles fits squarely within this sector, representing a key component of the U.S. military's precision strike capabilities. Spending in this area is driven by geopolitical factors and the need for advanced weaponry.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor is a joint venture of two large defense corporations. While the prime contractors themselves are not small businesses, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem is unclear. Large sole-source contracts can sometimes limit subcontracting opportunities for smaller firms if the prime contractor opts for in-house capabilities or works with established large suppliers.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The Inspector General (IG) for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award, making public oversight more challenging. Accountability would be measured through contract performance metrics, delivery schedules, and adherence to specifications, as outlined in the contract terms.

Related Government Programs

Other Missile Systems Contracts
Defense Ammunition Procurement
Guided Missile Manufacturing
Department of the Army Weapon Systems Procurement

Risk Flags

Sole-source award
Lack of competitive pricing
Potential for cost overruns
Critical defense system dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.6 million to RAYTHEON/LOCKHEED MARTIN JAVELIN JV. IGF::CT::IGF LCCS UCA

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 $50.6 million.

What is the period of performance?

Start: 2014-07-10. End: 2018-02-28.

What is the track record of the Raytheon/Lockheed Martin Javelin JV in delivering similar missile systems?

The Raytheon/Lockheed Martin Javelin JV is a well-established entity responsible for the production of the Javelin anti-tank missile system, a critical weapon for the U.S. Army and its allies. Both parent companies, Raytheon and Lockheed Martin, have extensive histories in defense manufacturing, including missile development and production. The Javelin system itself has a proven combat record and has undergone numerous upgrades and modifications since its introduction. The JV's track record is generally considered strong in terms of technical capability and meeting production demands for this specific weapon system, although specific performance metrics on past contracts, such as on-time delivery rates or defect rates, would require deeper contractual data analysis.

How does the $50.6 million contract value compare to historical spending on Javelin missiles?

The $50.6 million contract value represents a specific procurement tranche for Javelin missiles. Historical spending on the Javelin program has been significantly higher over its lifecycle, reflecting ongoing production, upgrades, and foreign military sales. For instance, cumulative spending on the Javelin system has reached billions of dollars since its inception. This $50.6 million award is likely one of many contracts awarded over the years to sustain and replenish the Javelin inventory. To provide a precise comparison, one would need to analyze annual spending trends, contract types (e.g., multi-year procurements vs. individual awards), and the specific quantities and configurations of missiles procured in different fiscal years.

What are the primary risks associated with this sole-source contract for Javelin missile manufacturing?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. Without competing offers, the government has reduced leverage to negotiate the best possible price, potentially leading to a less efficient use of taxpayer funds. Another risk is contractor complacency; a sole-source provider may have less incentive to innovate or improve efficiency compared to a contractor facing market competition. Furthermore, reliance on a single entity for a critical defense asset like the Javelin missile can create supply chain vulnerabilities. If the contractor experiences production issues, delays, or faces unforeseen challenges, it could significantly impact the availability of these essential weapons for the military.

How effective is the Javelin missile system in fulfilling its intended military purpose?

The Javelin missile system is widely regarded as a highly effective shoulder-fired anti-tank weapon system. Its fire-and-forget capability, employing a "top-attack" mode, allows the operator to seek cover after launch, significantly increasing survivability. It is designed to defeat main battle tanks by striking their more vulnerable top armor. The Javelin has demonstrated significant effectiveness in various combat theaters, including Iraq and Afghanistan, and has been credited with destroying numerous armored vehicles. Its relatively lightweight design and ease of use make it a versatile weapon for infantry units. Continuous upgrades ensure its relevance against evolving armored threats.

What is the typical contract structure for major defense weapon systems like the Javelin?

Major defense weapon systems like the Javelin are typically procured through a combination of contract types and structures, often evolving over the system's lifecycle. Initial development and testing phases might involve cost-plus contracts. Once the system is mature and production is stable, firm-fixed-price (FFP) contracts are often preferred by the government to control costs and transfer risk to the contractor. Multi-year procurement (MYP) contracts are also common, allowing the government to commit to purchasing a certain quantity over several years, often at a reduced price, while providing the contractor with production stability. Sole-source awards, as seen here, are used when competition is not feasible or advantageous, but they are generally less preferred than competitive awards for long-term sustainment and production.

Are there alternative missile systems that could fulfill the same role as the Javelin?

While the Javelin is a premier anti-tank guided missile (ATGM) system, there are indeed alternative systems that fulfill similar roles, though often with different capabilities, costs, and operational characteristics. These include other man-portable ATGMs like the TOW (Tube-launched, Optically-tracked, Wire-guided) missile, which is heavier and requires continuous operator guidance, or the NLAW (Next generation Light Anti-tank Weapon), used by some European allies. Vehicle-mounted missile systems and loitering munitions also offer anti-armor capabilities. However, the Javelin's combination of fire-and-forget technology, top-attack capability, portability, and proven effectiveness makes it a unique and highly sought-after system, often making direct substitution challenging without compromising specific operational advantages.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q13R0025

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $65,694,805

Exercised Options: $50,598,578

Current Obligation: $50,598,578

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline