DoD Awards Raytheon $208M for Stinger Missile Production, Facing Limited Competition

Contract Overview

Contract Amount: $207,949,888 ($207.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2016-12-28

End Date: 2022-04-30

Contract Duration: 1,949 days

Daily Burn Rate: $106.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: STINGER FMS MISSILE PRODUCTION

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $207.9 million to RAYTHEON COMPANY for work described as: STINGER FMS MISSILE PRODUCTION Key points: 1. Significant contract value of $208M for critical defense asset. 2. Raytheon Company is the sole provider, indicating a lack of competition. 3. Potential risks include reliance on a single supplier and price escalation. 4. Spending falls within the Guided Missile and Space Vehicle Manufacturing sector.

Value Assessment

Rating: fair

The contract value of $208M is substantial for missile production. Without available benchmarks or pricing details, it's difficult to definitively assess if this price is competitive. The 'NOT AVAILABLE FOR COMPETITION' status for contract type suggests limited price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is awarded under a 'DEFINITIVE CONTRACT' with 'NOT AVAILABLE FOR COMPETITION' status, indicating limited or no competitive bidding. This lack of competition may lead to higher prices than if multiple vendors were involved.

Taxpayer Impact: Taxpayer funds are being used for a critical defense system with limited competitive pressure on pricing, potentially impacting overall value for money.

Public Impact

Ensures continued availability of a vital anti-aircraft missile system for national defense. Supports advanced manufacturing capabilities within the U.S. defense industrial base. Potential for long-term reliance on Raytheon for Stinger missile sustainment and upgrades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole source procurement
Lack of competitive pricing data
Long contract duration (1949 days)

Positive Signals

Procurement of critical defense asset
Supports domestic manufacturing

Sector Analysis

This contract falls under the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of defense production. Spending in this sector is often characterized by high R&D costs, long production cycles, and significant government oversight due to national security implications.

Small Business Impact

The data does not indicate any specific provisions or participation by small businesses in this contract. Large defense contracts like this often involve complex supply chains, but direct small business involvement is not specified here.

Oversight & Accountability

The contract is a definitive contract awarded by the Department of the Army. Oversight would typically involve program management, quality assurance, and financial tracking to ensure delivery and adherence to terms, especially given the sole-source nature.

Related Government Programs

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

Risk Flags

Sole source procurement limits price negotiation.
Lack of transparency in competition justification.
Potential for cost overruns due to limited oversight on pricing.
Long contract duration may not reflect current market conditions.
Dependence on a single manufacturer for critical defense capability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $207.9 million to RAYTHEON COMPANY. STINGER FMS MISSILE PRODUCTION

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 $207.9 million.

What is the period of performance?

Start: 2016-12-28. End: 2022-04-30.

What is the justification for awarding this contract as limited competition, and what steps were taken to ensure fair pricing?

The justification for limited competition is not provided in the data. Typically, such justifications are based on factors like unique capabilities, urgent need, or lack of alternative sources. Without this information, it's impossible to assess the fairness of the pricing or the thoroughness of the price discovery process employed by the agency.

What are the long-term risks associated with relying solely on Raytheon for Stinger missile production and sustainment?

Long-term risks include potential price gouging due to lack of competition, reduced innovation from a single supplier, and vulnerability if Raytheon faces production issues or strategic shifts. Dependence on one company can also limit the government's flexibility in adapting to evolving threats or seeking alternative technologies.

How does the $208M contract value compare to historical spending on similar missile systems, and does it represent good value for taxpayers?

Without specific historical data for comparable missile systems or detailed cost breakdowns for this contract, it is challenging to definitively state if $208M represents good value. The 'NOT AVAILABLE FOR COMPETITION' status further complicates a value assessment, as competitive benchmarks are absent.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q16R0025

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $415,899,776

Exercised Options: $207,949,888

Current Obligation: $207,949,888

Subaward Activity

Number of Subawards: 426

Total Subaward Amount: $298,219,528

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline