DoD Awards Raytheon $21.3M for NASAMS Maintenance, Sustaining Critical Air Defense Capabilities

Contract Overview

Contract Amount: $21,281,204 ($21.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-07-01

End Date: 2026-06-30

Contract Duration: 729 days

Daily Burn Rate: $29.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: NATIONAL ADVANCED SURFACE-TO-AIR-MISSILE SYSTEM (NASAMS) MAINTENANCE, SUSTAINMENT, AND ENGINEERING SERVICES NECESSARY TO SUPPORT NASAMS AND ASSOCIATED EQUIPMENT.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35807

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $21.3 million to RAYTHEON COMPANY for work described as: NATIONAL ADVANCED SURFACE-TO-AIR-MISSILE SYSTEM (NASAMS) MAINTENANCE, SUSTAINMENT, AND ENGINEERING SERVICES NECESSARY TO SUPPORT NASAMS AND ASSOCIATED EQUIPMENT. Key points: 1. This contract focuses on sustaining the National Advanced Surface-to-Air Missile System (NASAMS), a key component of air defense. 2. Raytheon Company, the sole awardee, is a major defense contractor with extensive experience in missile systems. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. The R&D NAICS code (541712) suggests a focus on advanced engineering and scientific support for the system.

Value Assessment

Rating: good

The award amount of $21.3M over two years for sustainment and engineering services appears reasonable given the complexity of advanced missile systems. Benchmarking against similar sustainment contracts for complex defense platforms would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a competitive bidding process. However, the specific award mechanism (Delivery Order) suggests it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, which could limit the scope of competition for this specific order.

Taxpayer Impact: Taxpayer funds are being used to ensure the operational readiness of a critical national defense asset, contributing to national security.

Public Impact

Ensures continued operational readiness of a vital air defense system for the U.S. Army. Supports advanced technology maintenance and engineering, potentially leading to system improvements. Maintains critical defense capabilities, contributing to national security and deterrence. Funds advanced research and development in physical and engineering sciences.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractor to increase costs.
Sole awardee may indicate limited competition for this specific delivery order.
System sustainment is critical but can be costly over the long term.

Positive Signals

Awarded under full and open competition.
Supports a critical national defense asset.
Contract duration is defined (729 days).

Sector Analysis

The Department of Defense consistently represents a significant portion of federal spending, particularly in areas like advanced missile systems and R&D. This contract aligns with typical spending patterns for sustainment of complex defense platforms, where specialized engineering and maintenance are crucial.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as the awardee is Raytheon Company. There is no indication of subcontracting opportunities for small businesses within this specific award notice.

Oversight & Accountability

The Department of the Army is responsible for overseeing this contract. The Cost Plus Fixed Fee structure necessitates robust oversight to ensure costs remain reasonable and that the fixed fee is justified by the scope of work.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for cost overruns due to CPFF contract type.
Lack of small business participation noted.
Reliance on a single contractor for critical sustainment.
Long-term sustainment costs for advanced weapon systems can be substantial.
National security implications if system readiness is compromised.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.3 million to RAYTHEON COMPANY. NATIONAL ADVANCED SURFACE-TO-AIR-MISSILE SYSTEM (NASAMS) MAINTENANCE, SUSTAINMENT, AND ENGINEERING SERVICES NECESSARY TO SUPPORT NASAMS AND ASSOCIATED EQUIPMENT.

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 $21.3 million.

What is the period of performance?

Start: 2024-07-01. End: 2026-06-30.

What is the projected cost growth potential for this Cost Plus Fixed Fee contract, and what oversight mechanisms are in place to mitigate it?

Cost Plus Fixed Fee contracts inherently carry a risk of cost growth as the contractor is reimbursed for actual costs plus a fixed fee. Mitigation strategies typically involve stringent cost tracking, regular audits, performance reviews, and clear definition of allowable costs. The Department of the Army's oversight team would be responsible for monitoring expenditures against the estimated cost and ensuring adherence to the contract terms to prevent excessive cost increases.

How does the sustainment cost of NASAMS compare to similar advanced surface-to-air missile systems, and what is the long-term cost projection?

Benchmarking NASAMS sustainment costs against comparable systems like Patriot or THAAD requires detailed cost data not publicly available. Factors influencing cost include system complexity, number of units, operational tempo, and technological obsolescence. Long-term projections would involve analyzing historical sustainment trends, planned upgrades, and anticipated operational lifespan to forecast future budgetary needs.

What specific engineering and R&D activities are included in this contract, and how do they contribute to the future effectiveness of the NASAMS?

This contract likely includes services such as diagnostics, repair, component replacement, software updates, and technical support for the NASAMS. The R&D component may involve analyzing system performance, identifying areas for improvement, and developing solutions for obsolescence or enhanced capabilities. These activities are crucial for maintaining the system's effectiveness against evolving threats and ensuring its continued relevance in air defense.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9113M13R0010

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 50 APPLE HILL DR, TEWKSBURY, MA, 01876

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: $91,323,699

Exercised Options: $35,643,464

Current Obligation: $21,281,204

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $2,542,644

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9113M17D0006

IDV Type: IDC

Timeline