Raytheon awarded $29.2M for advanced digital voice terminals, a sole-source contract for the Air Force

Contract Overview

Contract Amount: $29,209,699 ($29.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-02-28

End Date: 2026-02-28

Contract Duration: 1,096 days

Daily Burn Rate: $26.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINA (ANDVT) CRYPTOLOGIC MODERNIZATION (VACM) FULL RATE PRODUCTION (RFP).

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $29.2 million to RAYTHEON COMPANY for work described as: VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINA (ANDVT) CRYPTOLOGIC MODERNIZATION (VACM) FULL RATE PRODUCTION (RFP). Key points: 1. Contract awarded to Raytheon Company for $29.2 million for advanced digital voice terminals. 2. This contract is a sole-source award, indicating limited competition. 3. The contract duration is 1096 days, ending in February 2026. 4. The award falls under the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' industry code. 5. This is a delivery order under an existing contract, suggesting a continuation of services or products. 6. The contract type is Firm Fixed Price, which shifts cost risk to the contractor.

Value Assessment

Rating: fair

Benchmarking the value for this specific contract is challenging without more detailed cost breakdowns or comparisons to similar sole-source awards for advanced cryptographic communication equipment. The firm fixed price structure is generally favorable for cost control. However, the lack of competition inherently limits the ability to assess if the pricing represents the best possible value for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This typically occurs when a specific technology or capability is proprietary or when there are unique circumstances justifying a single source. The lack of open competition means the government did not benefit from a bidding process that could drive down prices through multiple offers.

Taxpayer Impact: Taxpayers may not be receiving the most competitive pricing due to the absence of a bidding process. The government's ability to negotiate favorable terms is reduced when only one provider is considered.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive modernized digital voice terminals. These terminals are crucial for secure and reliable voice communications in military operations. The contract supports advanced cryptographic modernization, enhancing national security. The geographic impact is primarily within the Department of Defense's operational theaters, though manufacturing is likely in Indiana. Workforce implications may include specialized manufacturing and engineering roles at Raytheon.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially leads to higher costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Dependence on a single contractor for critical communication technology.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Award is for modernization, implying an upgrade to existing, potentially outdated, systems.
Contract is a delivery order, suggesting it builds upon an established relationship and existing infrastructure.

Sector Analysis

The defense communications sector is characterized by high technological sophistication and significant government investment. Contracts often involve specialized equipment with long development cycles and stringent security requirements. Raytheon is a major player in this market. This contract for advanced digital voice terminals fits within the broader landscape of military communications modernization, where maintaining secure and interoperable systems is paramount. Spending in this area is substantial, driven by evolving threats and technological advancements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. Given the specialized nature of cryptographic modernization, it is possible that the prime contractor, Raytheon, will handle most of the work internally or with large, specialized subcontractors, potentially limiting opportunities for the small business ecosystem in this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a delivery order under an existing contract, the initial award justification and terms would have undergone review. Transparency is limited by the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the performance of the contract.

Related Government Programs

Military Communications Modernization Programs
Cryptographic Modernization Initiatives
Secure Voice Communication Systems
Department of Defense Procurement

Risk Flags

Sole-source award may limit cost savings.
Lack of competition could reduce innovation incentives.
Potential for vendor lock-in with specialized technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.2 million to RAYTHEON COMPANY. VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINA (ANDVT) CRYPTOLOGIC MODERNIZATION (VACM) FULL RATE PRODUCTION (RFP).

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 Air Force).

What is the total obligated amount?

The obligated amount is $29.2 million.

What is the period of performance?

Start: 2023-02-28. End: 2026-02-28.

What is the specific justification for awarding this contract on a sole-source basis to Raytheon Company?

The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is capable of providing the required supplies or services, or when there is a compelling urgency. For advanced cryptographic modernization, justifications often relate to proprietary technology, unique capabilities, or the need for compatibility with existing, specialized systems. A detailed review of the contract file, specifically the Justification for Other Than Full and Open Competition (JOFOC), would be necessary to understand the precise reasons.

How does the $29.2 million contract value compare to similar cryptographic modernization efforts within the Department of Defense?

Direct comparison of the $29.2 million contract value for Raytheon's advanced digital voice terminals is difficult without access to detailed spending data on comparable cryptographic modernization programs. The defense sector often involves large, multi-year contracts for complex systems. The value of this contract appears moderate for a specialized technology modernization effort. However, without knowing the scope, quantity of units, and specific technological advancements included, it's hard to benchmark effectively. Further analysis would require identifying similar contracts for voice terminals or cryptographic upgrades, considering their duration, scope, and the specific capabilities they provide.

What are the key performance indicators (KPIs) or metrics used to assess the success of this contract's delivery?

The provided data does not specify the key performance indicators (KPIs) or metrics for this contract. For a contract involving the delivery of advanced digital voice terminals with cryptographic modernization, typical KPIs would likely include adherence to delivery schedules, meeting technical specifications and performance requirements (e.g., signal clarity, encryption strength, interoperability), successful integration testing, and reliability of the equipment. Quality assurance provisions within the contract and inspection upon delivery would also serve as assessment mechanisms. The firm fixed price nature implies that meeting these defined requirements is paramount for the contractor to achieve full payment.

What is Raytheon Company's track record with similar defense communication or cryptographic contracts?

Raytheon Company, now part of RTX, has a long and extensive track record of providing advanced defense systems, including communication and cryptographic technologies, to the U.S. military and allied nations. They are a major defense contractor involved in numerous programs requiring secure and sophisticated communication solutions. Their experience spans various platforms and operational environments. While specific details on past performance for 'ANDVT Cryptologic Modernization' are not in the provided data, Raytheon's general portfolio suggests a strong capability in developing and delivering such specialized equipment. A deeper dive into their contract history with the DoD would reveal specific past performance ratings and project successes.

What is the potential risk associated with relying on a single vendor for critical communication modernization?

Relying on a single vendor for critical communication modernization, as is the case with this sole-source contract, presents several risks. Firstly, it can lead to a lack of competitive pressure, potentially resulting in higher prices and less incentive for the vendor to innovate or improve efficiency. Secondly, it creates a dependency; if the sole vendor experiences production issues, financial instability, or decides to discontinue the product line, the government may face significant disruption in acquiring necessary upgrades or support. Thirdly, it limits the government's flexibility in adopting alternative or emerging technologies that might become available from other sources. This dependency underscores the importance of robust contract management and contingency planning.

How does this contract align with broader Department of Defense strategies for secure communications and technological advancement?

This contract for the 'VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINA (ANDVT) CRYPTOLOGIC MODERNIZATION' directly aligns with the Department of Defense's (DoD) overarching strategies for maintaining secure and resilient communication capabilities. Modernizing cryptographic systems is essential for protecting sensitive information against evolving cyber threats and ensuring interoperability across different military branches and allied forces. The focus on digital voice terminals suggests an effort to upgrade legacy systems to more advanced, potentially software-defined, platforms that can offer enhanced security features, improved clarity, and greater flexibility. Such modernization efforts are critical for supporting joint operations and maintaining a technological edge.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1010 PRODUCTION RD, FORT WAYNE, IN, 46808

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $29,209,699

Exercised Options: $29,209,699

Current Obligation: $29,209,699

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA830717D0017

IDV Type: IDC

Timeline