The Contract

The US Department of Defense Press Desk released today that The Raytheon Company [NYSE: RTN] has been awarded a contract to the sum of $119,021,912 in support of the Maritime Strike Tomahawk Program.

 

Source Excerpt

Department of the Navy Contract:

“Raytheon Co., Tucson, Arizona, is being awarded an $119,021,912 cost-plus-incentive-fee delivery order (N00019-17-F-2001) against a previously issued basic ordering agreement (N00019-15-G-0003).  This order provides for analysis, trade studies, architecture, modeling, simulation development, evaluation, and prototyping activities for the integration of seeker suite technology and processing capabilities into the Tactical Tomahawk Block IV All-Up-Round missile system in support of the Maritime Strike Tomahawk Program.  Work will be performed in Tucson, Arizona (44.7 percent); Dallas, Texas (23.3 percent); Boulder, Colorado (20.6 percent); and various other locations inside and outside the U.S. (11.4 percent), and is expected to be completed in August 2019.  Fiscal 2017 research, development, test and evaluation (Navy) funds in the amount of $9,400,000 are being obligated on this award, none of which will expire at the end of the current fiscal year.  The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity..”

Source

 

Contract Interpretation

  • Cost-Plus-Incentive-Fee: A contract that provides for the initially negotiated amount to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. The amount can be increased when allowable costs come in at less than target costs, or fees can be decreased when allowable costs exceed target costs. As such, this kind of contract creates an incentive for the contractor to come in at or under target costs. More

 

Maritime Strike Tomahawk Program

The Maritime Strike Tomahawk Program is part of a bigger effort to modify and recertify the combat-proven Tomahawk Cruise Missile. Here, Raytheon is being tasked with integrating technological upgrades into a more modern and potent Tomahawk.

 


Disclaimer

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:

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