DoD Awards Raytheon $37.9M for HAWK Missile Sustainment, Lacking Competition
Contract Overview
Contract Amount: $37,922,229 ($37.9M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2022-05-27
End Date: 2026-05-28
Contract Duration: 1,462 days
Daily Burn Rate: $25.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Defense
Official Description: COST ONLY UNDEFINITIZED CONTRACT ACTION (UCA) FOR THE PROCUREMENT OF 12 MONTHS OF CONTINUED, UNINTERRUPTED, HOMING ALL THE WAY (HAWK) FAIR SHARE SUSTAINMENT OPERATIONS (FSSO)SUPPORT.
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $37.9 million to RAYTHEON COMPANY for work described as: COST ONLY UNDEFINITIZED CONTRACT ACTION (UCA) FOR THE PROCUREMENT OF 12 MONTHS OF CONTINUED, UNINTERRUPTED, HOMING ALL THE WAY (HAWK) FAIR SHARE SUSTAINMENT OPERATIONS (FSSO)SUPPORT. Key points: 1. Significant award for critical missile sustainment operations. 2. Sole-source nature raises concerns about price discovery and value. 3. Long contract duration (4 years) warrants close monitoring. 4. Focus on HAWK system sustainment, a mature technology.
Value Assessment
Rating: questionable
The contract type is Cost No Fee, which offers limited incentive for cost control. Without competitive benchmarking, it's difficult to assess if $37.9 million for 12 months of sustainment is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition for a substantial contract value suggests potential overspending, impacting taxpayer funds negatively.
Public Impact
Ensures continued operational readiness of the HAWK missile system. Supports ongoing defense capabilities for the U.S. Army. Potential for taxpayer funds to be used inefficiently due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Ensures critical system sustainment
- Supports national defense
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector. Spending in this area is critical for national defense, but often involves complex, high-cost systems where competitive sourcing is paramount.
Small Business Impact
There is no indication of small business participation in this sole-source award. Future solicitations should explore opportunities for small business involvement where feasible.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure the contractor is performing efficiently and that costs are reasonable, despite the absence of competition.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition
- Cost No Fee contract type
- Potential for cost overruns
- Limited transparency on pricing justification
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, ma, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.9 million to RAYTHEON COMPANY. COST ONLY UNDEFINITIZED CONTRACT ACTION (UCA) FOR THE PROCUREMENT OF 12 MONTHS OF CONTINUED, UNINTERRUPTED, HOMING ALL THE WAY (HAWK) FAIR SHARE SUSTAINMENT OPERATIONS (FSSO)SUPPORT.
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 $37.9 million.
What is the period of performance?
Start: 2022-05-27. End: 2026-05-28.
What is the historical cost trend for HAWK sustainment and how does this award compare?
Without access to historical cost data for HAWK sustainment operations and comparable contracts, it is challenging to definitively assess the value of this $37.9 million award. The sole-source nature and Cost No Fee structure further complicate a precise value assessment, highlighting a need for better cost transparency and competitive benchmarking in future procurements.
What are the specific risks associated with a sole-source award for critical missile sustainment?
The primary risk of a sole-source award for critical missile sustainment is the potential for inflated costs due to a lack of competitive pressure. This can lead to inefficient use of taxpayer funds. Additionally, it may reduce incentives for the sole provider to innovate or improve service delivery, potentially impacting long-term system readiness and support quality.
How effective is the Cost No Fee contract type in ensuring efficient spending for sustainment operations?
The Cost No Fee contract type offers minimal incentive for the contractor to control costs, as the government agrees to reimburse all allowable costs without a fee. This structure is generally not considered effective for promoting cost efficiency, especially in sustainment operations where performance metrics can be complex. It places a greater burden on government oversight to manage expenditures.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
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: $68,043,409
Exercised Options: $41,775,423
Current Obligation: $37,922,229
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $30,937
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-05-27
Current End Date: 2026-05-28
Potential End Date: 2027-11-30 00:00:00
Last Modified: 2025-11-04
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