DoD Awards Raytheon $65.4M for PATRIOT Missile Production Kits, Sole-Source Contract

Contract Overview

Contract Amount: $65,397,046 ($65.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-09-29

End Date: 2024-11-30

Contract Duration: 2,254 days

Daily Burn Rate: $29.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PATRIOT SWEEP 9 PRODUCTION KITS FOR US AND FMS COUNTRIES

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $65.4 million to RAYTHEON COMPANY for work described as: PATRIOT SWEEP 9 PRODUCTION KITS FOR US AND FMS COUNTRIES Key points: 1. Significant award for critical missile defense technology. 2. Sole-source nature raises questions about price competition. 3. Long contract duration (2254 days) may impact cost control. 4. Focus on PATRIOT system highlights ongoing defense needs.

Value Assessment

Rating: questionable

The contract is sole-source, making direct price comparisons difficult. Without competitive bidding, it's hard to ascertain if the $65.4 million represents the best value for the taxpayer.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon. This limits price discovery and potentially leads to higher costs compared to a competitive environment.

Taxpayer Impact: The lack of competition for this significant award means taxpayers may not be receiving the most cost-effective solution.

Public Impact

Ensures continued availability of advanced missile defense systems. Supports U.S. and allied military readiness. Funds critical manufacturing capabilities within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing

Positive Signals

Essential defense capability
Supports allied security

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of defense. Spending in this niche is driven by national security requirements and technological advancements.

Small Business Impact

The contract data does not indicate any specific set-asides for small businesses. The prime contractor, Raytheon, is a large defense corporation, suggesting limited direct opportunities for small businesses on this specific award.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and efficient use of funds. Robust auditing and performance monitoring are crucial.

Related Government Programs

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

Risk Flags

Lack of competitive bidding
Potential for cost overruns
Risk of technological obsolescence
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.4 million to RAYTHEON COMPANY. PATRIOT SWEEP 9 PRODUCTION KITS FOR US AND FMS COUNTRIES

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 $65.4 million.

What is the period of performance?

Start: 2018-09-29. End: 2024-11-30.

What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities or lack of viable alternatives. For this contract, the Department of the Army would need to provide specific documentation. To ensure fair pricing, the agency should conduct thorough cost analyses, benchmark against similar sole-source procurements, and potentially negotiate profit margins aggressively.

How does the long contract duration impact the overall cost and potential for obsolescence?

A long duration like 2254 days (over 6 years) can lock in prices, potentially benefiting the government if initial pricing is favorable. However, it also increases the risk of cost overruns due to inflation or unforeseen production challenges. Furthermore, extended timelines raise concerns about technological obsolescence, as the PATRIOT system may evolve or be superseded during the contract period.

What is the projected return on investment or strategic value of these PATRIOT missile production kits?

The strategic value lies in maintaining and enhancing U.S. and allied air and missile defense capabilities, crucial for national security and deterrence. The return on investment is measured not just in financial terms but in the prevention of potential threats and the safeguarding of military assets and personnel. Quantifying this value is complex but essential for justifying the expenditure.

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: W31P4Q17R0005

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 350 LOWELL ST, ANDOVER, MA, 01810

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: $141,875,000

Exercised Options: $65,397,046

Current Obligation: $65,397,046

Subaward Activity

Number of Subawards: 484

Total Subaward Amount: $65,590,385

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline