Raytheon Awarded $794.6M for Standard Missile 2 (SM 2) Production
Contract Overview
Contract Amount: $599,875,760 ($599.9M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2004-06-03
End Date: 2019-08-18
Contract Duration: 5,554 days
Daily Burn Rate: $108.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200411!043715!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002404C5460 !A!N! !N! ! !20040603!20070903!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!48000!111!21!LOUISVILLE !JEFFERSON !KENTUCKY !+000044445640!N!N!000044445640!1095!MISCELLANEOUS WEAPONS !A5 !WEAPONS !234 !STANDARD MISSILE 2 (SM 2) !332994!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1G!Z!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !
Place of Performance
Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40201
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $599.9 million to RAYTHEON COMPANY for work described as: 200411!043715!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002404C5460 !A!N! !N! ! !20040603!20070903!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!48000!111!21!LOUISVILLE !JEFF… Key points: 1. Contract awarded to Raytheon Company for miscellaneous weapons. 2. The contract is for Standard Missile 2 (SM 2) production. 3. This is a definitive contract with a firm fixed price. 4. The contract was not competed, raising potential value concerns.
Value Assessment
Rating: questionable
The total contract value is $794,598,573. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar missile system contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition could result in inflated prices, meaning taxpayers may be paying more than necessary for these missile systems.
Public Impact
Defense spending on critical missile systems. Potential impact on military readiness if costs are excessive. Long-term implications for defense procurement strategies. Role of sole-source contracts in defense acquisition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Long contract duration
Positive Signals
- Award to established defense contractor
- Production of critical defense asset
Sector Analysis
This contract falls within the defense sector, specifically for the production of missile systems. Defense spending benchmarks for similar weapon systems would be relevant for comparison.
Small Business Impact
The data does not indicate any specific provisions or subcontracting goals for small businesses in this contract.
Oversight & Accountability
The contract was awarded by the Department of Defense, Naval Sea Systems Command. Oversight would focus on contract performance and adherence to terms, especially given the sole-source nature.
Related Government Programs
- Small Arms, Ordnance, and Ordnance Accessories Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Potential for cost overruns due to lack of competition.
- Long contract duration may not reflect evolving needs or technology.
- Limited transparency on specific cost breakdowns.
- Dependence on a single contractor for critical defense systems.
Tags
small-arms-ordnance-and-ordnance-accesso, department-of-defense, ky, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $599.9 million to RAYTHEON COMPANY. 200411!043715!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002404C5460 !A!N! !N! ! !20040603!20070903!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!48000!111!21!LOUISVILLE !JEFFERSON !KENTUCKY !+000044445640!N!N!000044445640!1095!MISCELLANEOUS WEAPONS !A5 !WEAPONS !234 !STANDARD MISSILE 2 (SM 2) !332994!E! !3! ! ! ! ! !999
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 $599.9 million.
What is the period of performance?
Start: 2004-06-03. End: 2019-08-18.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of adequate competition. Without further details, it's difficult to ascertain the specific reasons. However, sole-source contracts warrant close scrutiny to ensure they are truly necessary and that pricing remains fair and reasonable.
How does the per-unit cost of the Standard Missile 2 (SM 2) compare to similar missile systems, especially those procured competitively?
Benchmarking the per-unit cost of the SM 2 against similar missile systems is crucial for value assessment. If competitive contracts for comparable systems show significantly lower prices, it would raise concerns about the pricing of this sole-source award. Further analysis would require access to detailed cost data and market research.
What is the long-term strategic value of continued investment in the Standard Missile 2 (SM 2) program?
The long-term strategic value hinges on the SM 2's continued relevance in naval defense capabilities. Its effectiveness against evolving threats, integration with existing platforms, and potential for upgrades are key factors. Assessing its role in maintaining fleet readiness and countering adversary capabilities provides insight into the justification for sustained procurement.
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 EAST HERMANS ROAD, 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: YES
Timeline
Start Date: 2004-06-03
Current End Date: 2019-08-18
Potential End Date: 2019-08-18 00:00:00
Last Modified: 2019-08-18
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