DoD Awards $1 Billion Javelin Missile Production IDIQ to Raytheon/Lockheed Martin JV for Ukraine

Contract Overview

Contract Amount: $1,014,766,853 ($1.0B)

Contractor: Raytheon/Lockheed Martin Javelin JV

Awarding Agency: Department of Defense

Start Date: 2024-08-23

End Date: 2030-06-30

Contract Duration: 2,137 days

Daily Burn Rate: $474.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UKRAINE JAVELIN PRODUCTION SYSTEM PRODUCTION IDIQ DELIVERY ORDER: 6,432 MISSILES AND PRODUCTION RAMP UP

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $1.01 billion to RAYTHEON/LOCKHEED MARTIN JAVELIN JV for work described as: UKRAINE JAVELIN PRODUCTION SYSTEM PRODUCTION IDIQ DELIVERY ORDER: 6,432 MISSILES AND PRODUCTION RAMP UP Key points: 1. Significant investment in critical defense capabilities for Ukraine. 2. Sole-source award to established Javelin JV raises competition concerns. 3. Long-term contract (2030) suggests sustained demand and production ramp-up. 4. Focus on guided missile manufacturing within the defense sector.

Value Assessment

Rating: questionable

The contract value is substantial, but without competitive bidding, it's difficult to assess if this represents the best value. The firm fixed-price structure provides cost certainty but doesn't inherently guarantee optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, awarded directly to the Raytheon/Lockheed Martin Javelin JV. This limits price discovery and potentially increases costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition may lead to higher costs for taxpayers, as there was no market pressure to drive down prices.

Public Impact

Ensures continued supply of vital anti-tank weapons to Ukraine. Supports U.S. defense industrial base and high-tech manufacturing jobs. Potential for cost overruns due to sole-source nature. Long-term commitment impacts future defense budget allocations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Long contract duration

Positive Signals

Critical support for Ukraine
Production ramp-up capability
Firm fixed-price contract

Sector Analysis

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

Small Business Impact

The awardee is a joint venture of two major defense contractors, indicating no direct benefit or subcontracting opportunities for small businesses are immediately apparent from this data. Further analysis would be needed to determine potential SMB involvement.

Oversight & Accountability

The Department of Defense is the contracting agency. Oversight will be crucial to ensure efficient execution, cost control, and timely delivery, especially given the sole-source nature and long duration.

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 price gouging
Dependency on a single contractor
Long-term budget commitment
Geopolitical supply chain risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.01 billion to RAYTHEON/LOCKHEED MARTIN JAVELIN JV. UKRAINE JAVELIN PRODUCTION SYSTEM PRODUCTION IDIQ DELIVERY ORDER: 6,432 MISSILES AND 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 $1.01 billion.

What is the period of performance?

Start: 2024-08-23. End: 2030-06-30.

What is the projected per-unit cost of a Javelin missile under this contract, and how does it compare to historical or benchmark pricing?

The provided data does not include per-unit cost breakdowns or historical pricing benchmarks. Determining the per-unit cost would require access to detailed contract line item numbers and comparative market data. Without this, assessing value for money is challenging, especially given the sole-source award.

What specific risks are associated with a sole-source award for such a critical defense system, particularly concerning production capacity and potential price escalations?

Sole-source awards carry risks of inflated pricing due to lack of competition and potential complacency in production efficiency. For critical systems like Javelin, reliance on a single provider could also create vulnerabilities in supply chain resilience and long-term availability if the JV faces internal issues.

How effectively will this long-term contract enable the production ramp-up needed to meet sustained demand from Ukraine and potentially other allies?

The IDIQ structure and long duration (through 2030) are designed to facilitate production ramp-up by providing the contractor with a predictable demand signal. This allows for investment in manufacturing capacity and workforce. However, effective oversight is needed to ensure the ramp-up meets targets without compromising quality or incurring excessive costs.

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: $1,693,489,986

Exercised Options: $1,014,766,853

Current Obligation: $1,014,766,853

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $32,429,827

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