DoD Awards $1.25 Billion Javelin Missile Production Contract to Raytheon/Lockheed Martin JV

Contract Overview

Contract Amount: $1,254,528,791 ($1.3B)

Contractor: Raytheon/Lockheed Martin Javelin JV

Awarding Agency: Department of Defense

Start Date: 2023-05-03

End Date: 2028-06-30

Contract Duration: 1,885 days

Daily Burn Rate: $665.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JAVELIN WEAPONS SYSTEM PRODUCTION IDIQ DELIVERY ORDER: 6300 MISSILES & PRODUCTION RAMP UP

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $1.25 billion to RAYTHEON/LOCKHEED MARTIN JAVELIN JV for work described as: JAVELIN WEAPONS SYSTEM PRODUCTION IDIQ DELIVERY ORDER: 6300 MISSILES & PRODUCTION RAMP UP Key points: 1. Significant investment in guided missile manufacturing for the Army. 2. Sole-source award raises questions about price discovery and competition. 3. Long-term contract (5 years) indicates sustained demand for Javelin systems. 4. Focus on production ramp-up suggests potential for increased unit output.

Value Assessment

Rating: questionable

The contract value is substantial at over $1.25 billion. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar missile production contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition on this large contract could lead to suboptimal pricing, potentially increasing the financial burden on taxpayers.

Public Impact

Ensures continued supply of a critical anti-tank weapon system for the U.S. Army. Supports advanced missile production capabilities within the defense industrial base. Potential for Javelin systems to be supplied to allied nations, enhancing interoperability. Long-term commitment may influence future defense budget allocations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
High contract value

Positive Signals

Critical weapon system production
Long-term delivery schedule
Production ramp-up

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often driven by geopolitical factors and national security needs.

Small Business Impact

The data indicates this contract was awarded to a joint venture of major defense contractors (Raytheon/Lockheed Martin). There is no indication of small business participation in this specific award.

Oversight & Accountability

Oversight will be crucial to ensure the contractor meets production targets and quality standards, especially given the sole-source nature of the award and the significant taxpayer investment.

Related Government Programs

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

Risk Flags

Sole-source award limits price competition.
High contract value increases financial risk.
Lack of transparency in price justification.
Potential for cost overruns without competitive pressure.
Long-term commitment may reduce flexibility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.25 billion to RAYTHEON/LOCKHEED MARTIN JAVELIN JV. JAVELIN WEAPONS SYSTEM PRODUCTION IDIQ DELIVERY ORDER: 6300 MISSILES & PRODUCTION RAMP UP

Who is the contractor on this award?

The obligated recipient is RAYTHEON/LOCKHEED MARTIN JAVELIN JV.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $1.25 billion.

What is the period of performance?

Start: 2023-05-03. End: 2028-06-30.

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 urgent needs. For this Javelin contract, the Department of Defense should provide a detailed rationale. To ensure fair pricing, mechanisms like cost realism analyses, profit controls, and potentially post-award audits are essential, though less effective than pre-award competition.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risk is paying a premium due to the lack of competitive pressure, potentially leading to inefficient use of taxpayer funds. Other risks include vendor lock-in, reduced innovation incentives, and potential quality compromises if oversight is insufficient. The long duration also ties the government to a single provider for an extended period.

How does the production ramp-up align with current and projected operational needs for the Javelin system?

The production ramp-up suggests an anticipated increase in demand or a need to replenish existing stockpiles. Aligning this with operational needs requires close coordination between the Army's requirements planners and the contractor. Monitoring inventory levels and deployment rates will be key to assessing the effectiveness of this production increase.

Industry Classification

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

Product/Service Code: HARDWARE AND ABRASIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1151 E HERMANS RD BLDG 805 M\\S C6, TUCSON, AZ, 85756

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,254,528,791

Exercised Options: $1,254,528,791

Current Obligation: $1,254,528,791

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q23D0014

IDV Type: IDC

Timeline