The US Department of Defense Press Desk released today, August 17, 2017 at 1700 EDT that Raytheon [NYSE: RTN] has been awarded a contract to the sum of $104,860,386 for the production of an undisclosed number of Griffin Missiles.
Department of the Air Force Contract:
“Raytheon Missile Systems, Tucson, Arizona, has been awarded a $104,860,386 firm-fixed-price, cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract for Griffin Missiles. This contract provides for delivery of all variants of Griffin standoff precision guided munitions and corresponding production, test and engineering support. Work will be performed in Tucson, Arizona, and is expected to be completed by Dec. 31, 2018. This award is the result of a sole-source acquisition. Fiscal 2016 and 2017 procurement funds in the amount of $24,071,072 are being obligated at time of award. The Air Force Life Cycle Management Center, Eglin Air Force Base, Florida, is the contracting activity (FA8656-17-D-0005)”
- Firm-Fixed-Price: A contract with such a price is not subject to any adjustment due to costs in performing said contract. This is a maximum risk, full responsibility contract in which Raytheon theoretically could end up eating costs that exceed the amount they’ve initially agreed upon. More
- Cost-Plus-Fixed-Fee: Such a contract provides for the payment of allowable incurred costs, to the maximum amount listed. This cost is negotiated on an initial basis, and due to being fixed, cannot be renegotiated or adjusted further. More
- Indefinite-Delivery/Indefinite Quantity: Such a contract provides for an indefinite number of items, within an agreed upon limit. In this case, the quantity is defined by the dollar amount. More
- Sole-Source Acquisition: A contract acquired in this way was done so without competition. More
The Griffin Missile Program
The Griffin Missile, AGM-176, was created to be a cheap, adaptable and multi-platform weapon. The missile can be launched from both aft-eject and forward-firing platforms. These variations are designated the Griffin A and Griffin B, respectively. The Griffin A was designed to be launched from a C-130, while the Griffin B can be launched from various maritime platforms and other aircraft. Once launched, the missile tracks a target through laser guidance- the operator must keep his or her target ‘painted’ until contact is made.
A third variation, the Griffin C, is currently in development.
As of this moment, I do not own shares of The Raytheon Company. My opinions are entirely my own and may or may not reflect the opinions of my peers on TickHounds. I am not being compensated for sharing my due diligence in any way other than what tips may be accrued.
Most information for this post was retrieved from various sources listed throughout the post. For other sources, see below: