DoD Awards Raytheon $347M for TOW and ITAS Parts, Extending Through 2025
Contract Overview
Contract Amount: $347,005,942 ($347.0M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2007-01-12
End Date: 2025-09-30
Contract Duration: 6,836 days
Daily Burn Rate: $50.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TAS::21 2020::TAS:: BASIC AWARD FOR PY07, CLS AND SPARES FOR TOW AND ITAS
Place of Performance
Location: MCKINNEY, COLLIN County, TEXAS, 75071
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $347.0 million to RAYTHEON COMPANY for work described as: TAS::21 2020::TAS:: BASIC AWARD FOR PY07, CLS AND SPARES FOR TOW AND ITAS Key points: 1. Significant contract value of $347 million for essential missile system components. 2. Sole-source award to Raytheon Company raises questions about competition and price discovery. 3. Long contract duration (2007-2025) suggests a critical, ongoing need for these parts. 4. The 'Other Guided Missile and Space Vehicle Parts' sector is highly specialized and defense-reliant.
Value Assessment
Rating: questionable
The contract value of $347 million is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar specialized defense components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and potentially leads to higher costs for taxpayers as competition is absent.
Taxpayer Impact: The lack of competition on a $347 million contract means taxpayers may be overpaying for these critical missile system parts.
Public Impact
Ensures continued availability of critical components for TOW and ITAS missile systems. Supports national defense capabilities by maintaining the supply chain for key weaponry. Potential for increased costs due to the sole-source nature of the award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Long contract duration
- High contract value
Positive Signals
- Essential defense procurement
- Established supplier relationship
Sector Analysis
This contract falls within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector. Spending in this niche area is driven by defense needs and technological advancements, often involving specialized, high-cost components.
Small Business Impact
The contract is awarded to Raytheon Company, a large defense contractor. There is no indication that small businesses are involved as subcontractors in this specific award, which is common for large, specialized sole-source procurements.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the pricing is justified and that efforts are made to introduce competition in future procurements where feasible.
Related Government Programs
- Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits price competition.
- Extended contract duration may mask inefficiencies.
- Lack of transparency in pricing justification.
- Potential for cost overruns without competitive pressure.
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $347.0 million to RAYTHEON COMPANY. TAS::21 2020::TAS:: BASIC AWARD FOR PY07, CLS AND SPARES FOR TOW AND ITAS
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 $347.0 million.
What is the period of performance?
Start: 2007-01-12. End: 2025-09-30.
What is the justification for the sole-source award, and have alternatives been explored?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by a single supplier. For this contract, the specific reasons for not competing it need to be documented by the Department of the Army. Oversight should confirm that alternatives were considered and that this was indeed the only viable option to meet the requirement.
How is the pricing validated to ensure it is fair and reasonable without competition?
Without competitive bids, price validation relies on cost analysis, historical pricing data, and benchmarking against similar, albeit potentially scarce, contracts. The Department of Defense should employ rigorous cost realism assessments and should have access to Raytheon's cost data to ensure the $347 million award is fair and reasonable.
What is the long-term strategy for ensuring cost-effectiveness and innovation in this supply chain?
The long-term strategy should focus on fostering competition where possible, perhaps through technology maturation programs or by breaking down the requirement into smaller, more competitive packages. Exploring alternative suppliers or developing second-source capabilities could also drive innovation and reduce costs over the extended contract period.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q06R0158
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 2501 W UNIVERSITY DR, MC KINNEY, TX, 75071
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $3,111,618,197
Exercised Options: $2,101,615,759
Current Obligation: $347,005,942
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2007-01-12
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2025-09-25
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