UNDER THE RADAR

Pentagon Pete Busted Handing $400M to Fraud Firm

Navy officials agreed that a severe punishment was “not necessary.”

Pete Hegseth’s Department of Defense has handed a contract extension worth up to $400 million to a weapons firm that has admitted to fraud against the government.

Raytheon was awarded the massive deal just a month after officials determined it wouldn’t be suspended for its past actions, the Daily Beast’s sister Substack, PunchUp, reported.

The Missile Defense Agency has handed the subsidiary of major arms manufacturer RTX a two-year no-compete extension worth up to $394 million to maintain government radars, with $112.3 million already obligated, the Pentagon announced last week.

The decision came just a month after RTX said the Navy had decided Raytheon would remain eligible for government contracts, despite the company admitting in 2024 that it inflated the price of a radar maintenance deal with the Air Force by $11.1 million in 2017 and 2018.

That firm also admitted to a $100.1 million Patriot missile fraud as part of a separate Army contract across 2011 and 2012.

“These schemes to defraud caused the DOD to pay Raytheon over $111 million more than Raytheon should have been paid on the contracts,” the Justice Department said in a press release at the time.

After the admission, Raytheon entered into a deferred prosecution agreement covering both the radar and missile frauds, with prosecutors pledging to back off as long as it agreed to a three-year period of intense government oversight.

“As a result of Raytheon’s fraud in connection with FOS2 negotiations and award, the U.S. Air Force agreed to a contract price for FOS2 that was fraudulently inflated by $11,072,009,” the agreement said in 2024.

In September this year, Navy officials “determined that suspension or debarment proceedings are not necessary to protect the U.S. government’s interests,” according to federal filings by RTX reviewed by PunchUp.

On Oct. 13, the Navy awarded Raytheon a new $15.1 million delivery order for radar parts under a previous agreement.

Eight days later, the Pentagon announced the $394 million Missile Defense Agency extension.

The new contract will keep Raytheon on the Missile Defense Agency’s books until 2028 and will see it complete work inside and outside the continental U.S.

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“This modification provides for a non-competitive, two-year extension and increases the contract ceiling from $2,605,033,000 to $2,999,033,000,” the Pentagon said in a statement.

“The current contract was the result of a sole-source acquisition. Under this contract extension, Raytheon will continue operations and sustainment support for the Army Navy/Transportable Radar Surveillance and Control Model 2 (AN/TPY-2) radar systems, utilizing a combination of cost-plus-incentive-fee, cost-plus-fixed-fee, and firm-fixed-price contract line items.”

The smaller Oct. 13 Navy agreement was for parts for AN/SPY-1 and AN/SPY-3 radar systems, which are largely used on ships for target tracking and missile defense.

The Pentagon also handed Raytheon two large missile deals this month, with the Navy awarding it a missile contract worth up to $24 billion on Oct. 1. On Oct. 8, the Missile Defense Agency announced a missile contract worth up to $6.3 billion.

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Raytheon has steadily maintained a close relationship with the Pentagon after its fraud went public. Before the latest extension, the deal between the firm and the MDA received a $900 million increase in the contract ceiling just nine days after the DoJ announced the deferred prosecution agreement in 2024.

This took the deal’s ceiling to $2.6 billion at the time. The Navy has also awarded billions in potential radar and missile supply contracts to Raytheon since then.

“In accordance with Federal Acquisition Regulation Part 9, MDA thoroughly assesses contractor responsibility and eligibility prior to executing any contract action,” an MDA spokesperson told the Daily Beast in a statement.

“Because the contractor was not suspended or debarred, and the acquisition fulfilled a critical mission requirement for the agency, MDA executed the extension.”

The Pentagon and Raytheon have been contacted for comment.

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