Raytheon Company awarded $50.1M contract for technical assistance on Patriot weapon systems for Ukraine

Contract Overview

Contract Amount: $50,122,846 ($50.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-02-24

End Date: 2026-02-23

Contract Duration: 1,095 days

Daily Burn Rate: $45.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UKRAINE REQUIREMENT FOR CONTRACTOR TECHNICAL ASSISTANCE FOR PATRIOT WEAPON SYSTEM IN SUPPORT OF UKRAINE. USAI FUNDING UTILIZED.

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $50.1 million to RAYTHEON COMPANY for work described as: UKRAINE REQUIREMENT FOR CONTRACTOR TECHNICAL ASSISTANCE FOR PATRIOT WEAPON SYSTEM IN SUPPORT OF UKRAINE. USAI FUNDING UTILIZED. Key points: 1. Contract awarded using USAI funding, indicating a focus on foreign military assistance. 2. The contract is a definitive contract with a firm fixed price, suggesting cost certainty. 3. Duration of 1095 days (3 years) indicates a long-term support requirement. 4. The award was not competed, raising questions about potential cost efficiencies. 5. The service category is 'All Other Professional, Scientific, and Technical Services', a broad classification. 6. The contractor, Raytheon Company, is a major defense contractor with extensive experience.

Value Assessment

Rating: fair

The contract value of $50.1 million for three years of technical assistance for a complex weapon system appears reasonable given the contractor's expertise and the critical nature of the support. However, without a competitive bidding process, it is difficult to benchmark the pricing against market alternatives or assess if the best possible value was achieved. The firm fixed-price structure offers cost predictability for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach is often used when a specific contractor possesses unique capabilities, intellectual property, or is the sole provider of a critical service or technology. While it ensures specialized support, it bypasses the potential benefits of a competitive process, such as lower prices and innovative solutions from multiple vendors.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings that could arise from a bidding process. The government relies on negotiation to secure a fair price, which can be less effective than market-driven price discovery.

Public Impact

The primary beneficiary is Ukraine, receiving critical technical assistance for the Patriot weapon system. Services delivered include technical support essential for the operation and maintenance of advanced air defense capabilities. The geographic impact is focused on Ukraine, enhancing its defense capabilities. Workforce implications include the deployment of specialized technical personnel by Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits opportunities for price discovery and potentially higher costs for taxpayers.
The broad 'All Other Professional, Scientific, and Technical Services' classification could obscure the specific nature of the technical assistance provided.
Reliance on a single contractor for critical technical support creates a dependency risk.

Positive Signals

Award to a highly experienced defense contractor (Raytheon) with proven expertise in the Patriot system.
Firm fixed-price contract provides cost certainty for the duration of the support.
USAI funding mechanism ensures the contract directly supports a critical foreign policy objective.

Sector Analysis

The defense sector, particularly air and missile defense systems, is characterized by high R&D costs, long product lifecycles, and significant government investment. Contracts for technical assistance on advanced platforms like the Patriot are crucial for maintaining operational readiness and effectiveness. Spending in this area is often driven by geopolitical needs and technological advancements. Comparable spending benchmarks would typically involve other major defense platforms requiring specialized, long-term technical support.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor is Raytheon Company, a large defense prime. There is no explicit information regarding subcontracting plans for small businesses within this award. This suggests that the primary focus is on direct support from the prime contractor, potentially limiting opportunities for small businesses to participate in this specific contract.

Oversight & Accountability

Oversight for this contract would likely fall under the Department of the Army and the Department of Defense, given the agency and sub-agency involved. The USAI funding mechanism may also involve specific oversight from relevant congressional committees and potentially the Government Accountability Office (GAO) for audit purposes. Transparency would be assessed through contract award databases and reporting requirements, though the sole-source nature might limit public detail on the negotiation process.

Related Government Programs

Foreign Military Sales (FMS)
USA Freedom Support Act (USFSA) programs
Patriot Missile System procurement and sustainment
USAI (Ukraine Security Assistance Initiative) funded contracts

Risk Flags

Sole-source award
Lack of competition
Broad service classification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.1 million to RAYTHEON COMPANY. UKRAINE REQUIREMENT FOR CONTRACTOR TECHNICAL ASSISTANCE FOR PATRIOT WEAPON SYSTEM IN SUPPORT OF UKRAINE. USAI FUNDING UTILIZED.

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 $50.1 million.

What is the period of performance?

Start: 2023-02-24. End: 2026-02-23.

What is Raytheon Company's track record with providing technical assistance for the Patriot weapon system?

Raytheon Company, now part of RTX Corporation, is the original developer and prime contractor for the Patriot Advanced Capability (PAC) missile system. They have an extensive and long-standing track record of providing comprehensive support, including technical assistance, training, maintenance, and upgrades for the Patriot system to numerous international customers and the U.S. military. Their deep institutional knowledge and proprietary data regarding the system's intricacies make them uniquely qualified for such support contracts. Historical data indicates numerous contracts, both competed and sole-source, for various aspects of Patriot sustainment and modernization over several decades.

How does the $50.1 million contract value compare to similar technical assistance contracts for advanced weapon systems?

Benchmarking this $50.1 million contract value is challenging without specific details on the scope of 'technical assistance' and the duration of comparable contracts. However, for major defense platforms like advanced air defense systems, multi-year technical support contracts often range from tens to hundreds of millions of dollars. Given the complexity of the Patriot system and the three-year duration, this award appears to be within a plausible range for specialized, long-term support. The absence of competition, however, prevents a direct value-for-money comparison against alternative providers or service levels.

What are the primary risks associated with a sole-source award for critical technical assistance?

The primary risks associated with a sole-source award for critical technical assistance include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a dependency risk where the government becomes reliant on a single provider. If the contractor faces performance issues, financial instability, or decides to discontinue the service, the government may have limited alternatives, potentially impacting the operational readiness of the supported system. Furthermore, the absence of a competitive process can lead to less transparency in pricing and negotiation outcomes.

How effective is the USAI funding mechanism in ensuring the delivery of critical defense support?

The Ukraine Security Assistance Initiative (USAI) is designed to provide security assistance to Ukraine by funding the procurement of defense articles, services, and training through contracts awarded by the Department of Defense. This mechanism allows for rapid acquisition and delivery of needed capabilities, often bypassing lengthy FMS processes. Its effectiveness lies in its flexibility and direct link to U.S. foreign policy objectives. However, like any government contracting, effectiveness is contingent on robust program management, oversight, and the ability to secure competitive pricing where feasible, though USAI awards can sometimes be sole-source due to urgency or specific requirements.

What is the historical spending trend for technical assistance related to air defense systems by the Department of Defense?

Historical spending by the Department of Defense (DoD) on technical assistance for air defense systems has been substantial and generally increasing, driven by evolving threats and the modernization of legacy systems, as well as the fielding of new platforms. This spending encompasses a wide range of services, including engineering support, maintenance, logistics, training, and upgrades. Contracts for systems like Patriot, THAAD, and others represent significant portions of the defense budget allocated to air and missile defense. Spending patterns are influenced by geopolitical events, strategic defense reviews, and congressional appropriations, often resulting in multi-year, high-value contracts.

What are the implications of the 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) classification for this contract?

The classification of 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) is a broad category used when a business activity does not fit into more specific industry classifications. For this contract, it suggests that the technical assistance provided by Raytheon may encompass a diverse range of specialized support activities related to the Patriot weapon system that do not neatly fall under categories like engineering services, IT services, or research and development. While this classification allows for flexibility, it can also make it more difficult to precisely understand the nature and cost breakdown of the services being procured without further detailed contract statements of work.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $50,122,846

Exercised Options: $50,122,846

Current Obligation: $50,122,846

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $263,660

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline