Raytheon Awarded $794M for Ballistic Missile Defense Systems, Research & Development

Contract Overview

Contract Amount: $1,832,700,865 ($1.8B)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-08-15

End Date: 2009-08-04

Contract Duration: 2,181 days

Daily Burn Rate: $840.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: 200312!036818!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002403C6111 !A!N! !N! !20030815!20080930!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000056456813!N!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !2CAA!BALLISTIC MISSILE DEFENSE SYS !541710!E! !3!B!S! ! ! !99990909!B! ! !A! !D!U!R!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $1.83 billion to RAYTHEON COMPANY for work described as: 200312!036818!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002403C6111 !A!N! !N! !20030815!20080930!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000056456813!N!N!000000000000!1410!GUIDED MISSILES !A2 !… Key points: 1. Significant investment in advanced defense technology. 2. Sole-source award raises questions about competition and pricing. 3. Long-term contract duration suggests ongoing R&D needs. 4. Focus on critical national security systems.

Value Assessment

Rating: questionable

The contract value of $794,598,573 is substantial for R&D in ballistic missile defense. Without competitive bids, it's difficult to assess if this price represents fair market value compared to similar systems or research efforts.

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 potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition in this large contract could result in taxpayers paying a premium for the developed systems.

Public Impact

Enhances national security through advanced missile defense capabilities. Supports high-tech research and development jobs in Arizona. Contributes to the technological superiority of U.S. defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Potential for cost overruns in R&D.
Long contract duration may not reflect evolving threats.

Positive Signals

Addresses critical national security need.
Invests in advanced technological capabilities.
Supports domestic R&D and manufacturing.

Sector Analysis

This contract falls under Research and Development in Physical, Engineering, and Life Sciences, specifically focusing on ballistic missile defense systems. Spending in this sector is crucial for national security but often involves high costs and complex technological challenges.

Small Business Impact

No specific information is provided regarding small business participation in this contract. Sole-source awards often have limited subcontracting opportunities for small businesses unless specifically mandated.

Oversight & Accountability

The Department of Defense, through the Naval Sea Systems Command, is the awarding agency. Oversight would typically involve contract performance monitoring and financial reviews to ensure adherence to terms and budget.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition may lead to inflated costs.
Potential for scope creep in long-term R&D.
Dependence on a single contractor for critical technology.
Complexity of R&D makes cost and schedule predictability challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.83 billion to RAYTHEON COMPANY. 200312!036818!1700!BZ006 !NAVAL SEA SYSTEMS COMMAND !N0002403C6111 !A!N! !N! !20030815!20080930!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000056456813!N!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !2CAA!BALLISTIC MISSILE DEFENSE SYS !541710!E! !3!B!S! ! ! !99990909!B! ! !A! !D!U!R!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $1.83 billion.

What is the period of performance?

Start: 2003-08-15. End: 2009-08-04.

What specific technological advancements are expected from this R&D contract, and how do they align with current and future threat assessments?

This contract aims to advance ballistic missile defense capabilities, likely focusing on improved detection, tracking, and interception technologies. The specific advancements would be detailed in classified program objectives, but they are intended to counter evolving ballistic missile threats from potential adversaries, ensuring the U.S. maintains a strategic advantage in missile defense.

Given the sole-source nature, what mechanisms are in place to ensure cost control and prevent contractor overreach throughout the contract's duration?

As a Cost Plus Award Fee (CPAF) contract, cost control relies on performance incentives and rigorous oversight. The government sets objective criteria for performance, and the contractor earns award fees based on meeting or exceeding these targets. Regular audits and reviews by the Defense Contract Management Agency (DCMA) are crucial for monitoring expenditures and ensuring value.

How will the effectiveness of the developed ballistic missile defense systems be measured and validated, especially considering the long-term nature of the research and development?

Effectiveness will be measured through a phased approach involving rigorous testing and evaluation (T&E) at component, subsystem, and system levels. This includes simulations, ground tests, and potentially live-fire exercises. Independent verification and validation by government agencies will ensure the systems meet stringent performance requirements before fielding.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $1,828,637,283

Exercised Options: $1,828,637,283

Current Obligation: $1,832,700,865

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline