DoD's $267M Raytheon Contract for Ordnance: Long Duration, Limited Competition Raises Questions

Contract Overview

Contract Amount: $266,882,466 ($266.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2002-05-15

End Date: 2019-08-18

Contract Duration: 6,304 days

Daily Burn Rate: $42.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40214

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $266.9 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $266.8 million awarded to Raytheon Company. 2. Limited competition due to 'NOT COMPETED' status suggests potential for higher costs. 3. Long contract duration (2002-2019) may indicate outdated pricing or missed opportunities for re-evaluation. 4. Focus on Small Arms, Ordnance, and Ordnance Accessories Manufacturing places it within the defense industrial base.

Value Assessment

Rating: questionable

The contract's value of $266.8 million over 17 years is substantial. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to market rates for similar ordnance manufacturing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was 'NOT COMPETED,' indicating a sole-source award to Raytheon. This lack of competition limits price discovery and may result in less favorable terms for the government.

Taxpayer Impact: The absence of competitive bidding over a long period likely means taxpayers may have paid more than necessary for these ordnance supplies.

Public Impact

Taxpayers funded a significant contract for defense matériel over nearly two decades. The long duration suggests a sustained need for these specific ordnance products. Lack of competition raises concerns about government's ability to secure best value.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Long Contract Duration
Potential for Overpricing

Positive Signals

Awarded to a major defense contractor
Specific product category with clear defense application

Sector Analysis

This contract falls within the defense sector, specifically focusing on ordnance manufacturing. Spending benchmarks in this area are highly dependent on specific weapon systems and geopolitical factors, but long-term, non-competitive contracts warrant scrutiny.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company and does not specify any small business participation. Given the nature and value of the contract, it is unlikely that small businesses were primary awardees.

Oversight & Accountability

The 'NOT COMPETED' status and long duration suggest potential weaknesses in oversight. Regular reviews and justifications for sole-source awards are crucial for ensuring accountability and value for taxpayer money.

Related Government Programs

Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition raises concerns about fair pricing.
Extended contract duration may indicate missed opportunities for cost savings.
Sole-source awards require strong justification and oversight.
Potential for outdated technology or specifications due to long term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $266.9 million to RAYTHEON COMPANY. See the official description on USAspending.

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 Navy).

What is the total obligated amount?

The obligated amount is $266.9 million.

What is the period of performance?

Start: 2002-05-15. End: 2019-08-18.

What was the justification for awarding this contract on a sole-source basis for such an extended period?

The justification for a sole-source award over 17 years is not provided in the data. Typically, such decisions are based on factors like unique capabilities, national security requirements, or lack of viable alternatives. However, the extended duration without re-competition raises questions about whether these conditions remained valid throughout the contract's life or if opportunities for competitive sourcing were missed.

How does the unit cost of these ordnance items compare to similar products procured competitively?

Without access to specific unit cost data and comparable competitive contracts, it is impossible to definitively assess the cost-effectiveness. However, the 'NOT COMPETED' status inherently limits the ability to benchmark against market prices. A lack of competition often leads to higher costs than would be achieved through a competitive bidding process, suggesting this contract may not represent the best value.

What is the strategic importance of these specific ordnance items, and were there alternative suppliers?

The strategic importance of 'Small Arms, Ordnance, and Ordnance Accessories' is clear within a defense context, likely supporting military readiness. The data does not provide information on alternative suppliers or the specific strategic necessity that precluded competition. A thorough review would be needed to confirm if Raytheon was indeed the only viable source throughout the contract's lifespan.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1151 E HERMANS RD, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline