DoD Awards Raytheon $30.1M for Korea PDB-8 Missile Upgrade
Contract Overview
Contract Amount: $30,145,170 ($30.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2022-12-27
End Date: 2027-03-31
Contract Duration: 1,555 days
Daily Burn Rate: $19.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: NEW CONTRACT FOR KOREA PDB-8 UPGRADE IN SUPPORT OF REPUBLIC OF KOREA
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $30.1 million to RAYTHEON COMPANY for work described as: NEW CONTRACT FOR KOREA PDB-8 UPGRADE IN SUPPORT OF REPUBLIC OF KOREA Key points: 1. Contract awarded to Raytheon Company for missile system upgrade. 2. Significant investment in defense capabilities for the Republic of Korea. 3. Fixed Price Incentive contract type suggests shared risk between government and contractor. 4. Spending falls within the Guided Missile and Space Vehicle Manufacturing sector.
Value Assessment
Rating: fair
The contract value of $30.1M for a 1555-day duration is difficult to benchmark without specific per-unit cost data. The Fixed Price Incentive (FPI) structure aims to control costs, but final price can vary based on performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a limited source selection. This limits price discovery and potentially leads to higher costs compared to a competitive bidding process.
Taxpayer Impact: Taxpayer funds are allocated for a specific defense upgrade, impacting national security spending priorities.
Public Impact
Enhances defense readiness and interoperability with a key ally. Supports advanced missile technology development and manufacturing. Contributes to the defense industrial base and associated jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to suboptimal pricing.
- Fixed Price Incentive contracts can result in cost overruns if not managed closely.
Positive Signals
- Addresses a specific, stated need for a critical upgrade.
- Long-term contract duration provides stability for program execution.
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of defense spending. Benchmarks for similar upgrades are highly specific and often classified, making direct comparison challenging.
Small Business Impact
The contract was awarded to Raytheon Company, a large prime contractor. There is no indication of small business participation in the provided data.
Oversight & Accountability
Oversight will be crucial given the limited competition and FPI contract type to ensure cost control and effective program delivery.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition
- Potential for cost overruns with FPI contract
- Lack of transparency on performance incentives
- Specific upgrade details not publicly available
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 $30.1 million to RAYTHEON COMPANY. NEW CONTRACT FOR KOREA PDB-8 UPGRADE IN SUPPORT OF REPUBLIC OF KOREA
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 $30.1 million.
What is the period of performance?
Start: 2022-12-27. End: 2027-03-31.
What is the target performance metric that drives the incentive in this FPI contract, and how does it relate to the overall value proposition?
The specific target performance metric for this Fixed Price Incentive contract is not detailed in the provided data. However, FPI contracts typically incentivize the contractor to meet or exceed certain performance standards (e.g., delivery schedule, technical specifications) while sharing in cost savings or overruns with the government. The value proposition hinges on achieving these performance goals efficiently, ensuring the Republic of Korea receives a critical upgrade that meets its operational needs within a controlled cost framework.
Given the limited competition, what mechanisms are in place to mitigate the risk of inflated pricing for this missile upgrade?
While limited competition inherently reduces price pressure, the Fixed Price Incentive (FPI) structure itself provides some cost control. The government and contractor share in cost variances, incentivizing the contractor to manage expenses. Additionally, robust program management, detailed cost analysis of the contractor's proposal, and potentially using historical data from similar, albeit not identical, programs can help mitigate pricing risks. Independent government cost estimates are also a key tool.
How does this specific upgrade contribute to the overall effectiveness of the Republic of Korea's defense posture and U.S. security interests?
The PDB-8 upgrade likely enhances the precision, range, or survivability of the missile systems operated by the Republic of Korea. This strengthens their indigenous defense capabilities, contributing to regional stability and deterring potential adversaries. For U.S. security interests, a well-equipped and capable ally like South Korea reduces the burden on U.S. forces and reinforces the mutual defense treaty, ensuring a more effective combined defense posture against shared threats.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q22R0012
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $30,145,170
Exercised Options: $30,145,170
Current Obligation: $30,145,170
Subaward Activity
Number of Subawards: 22
Total Subaward Amount: $1,511,438
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-12-27
Current End Date: 2027-03-31
Potential End Date: 2027-03-31 12:03:00
Last Modified: 2025-12-15
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