DoD Awards Raytheon $37M for ANDVT Cryptologic Modernization, No Competition

Contract Overview

Contract Amount: $37,059,507 ($37.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-09-26

End Date: 2026-09-29

Contract Duration: 733 days

Daily Burn Rate: $50.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

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

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $37.1 million to RAYTHEON COMPANY for work described as: VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINAL (ANDVT) CRYPTOLOGIC MODERNIZATION (VACM) FULL RATE PRODUCTION (FRP). Key points: 1. Significant contract value for specialized communication equipment. 2. Sole-source award raises questions about price discovery and competition. 3. Potential risk associated with reliance on a single vendor for critical modernization. 4. IT and Defense sectors are key areas for this type of spending.

Value Assessment

Rating: questionable

The contract value of $37.06 million for the ANDVT Cryptologic Modernization is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar modernization efforts or alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Raytheon was the only vendor considered. This limits price discovery and may lead to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competition, as the government did not leverage market forces to secure the best possible price.

Public Impact

Modernization of secure communication systems is vital for national security. The award impacts the Department of the Air Force's ability to maintain secure voice communications. Raytheon's role as a sole-source provider highlights potential single points of failure in the supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Essential modernization of critical communication systems
Award to established defense contractor

Sector Analysis

This contract falls within the IT and Defense sectors, specifically related to advanced communications equipment manufacturing. Spending benchmarks for similar cryptographic modernization projects are difficult to establish without competitive data, but $37M is a significant investment.

Small Business Impact

The awardee, Raytheon Company, is a large defense contractor. There is no indication that small businesses were involved in this specific sole-source procurement, missing an opportunity for small business participation.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and effective delivery. The Department of Defense's contracting officers must rigorously validate the necessity and cost-effectiveness of this award.

Related Government Programs

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits price competition.
Potential for inflated costs due to lack of bidding.
Dependency on a single supplier for critical technology.
Limited transparency on cost justification.
Missed opportunity for small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.1 million to RAYTHEON COMPANY. VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINAL (ANDVT) CRYPTOLOGIC MODERNIZATION (VACM) FULL RATE PRODUCTION (FRP).

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 $37.1 million.

What is the period of performance?

Start: 2024-09-26. End: 2026-09-29.

What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing without competition?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. The Department of Defense should have conducted a thorough market research and cost analysis to validate the necessity and ensure the pricing is fair and reasonable, even without competitive bids. This often involves comparing costs to historical data or independent cost estimates.

What are the long-term risks associated with relying on a single vendor for critical cryptologic modernization, particularly regarding future upgrades and cybersecurity?

Long-term reliance on a single vendor for critical systems like cryptologic modernization poses risks of vendor lock-in, potentially leading to escalating costs for future upgrades or maintenance. It can also create vulnerabilities if the vendor's technology becomes obsolete or if they face financial instability. Cybersecurity risks are amplified if the vendor's security practices are not continuously scrutinized or if they become a target for sophisticated attacks.

How does this $37 million investment in ANDVT modernization align with the Air Force's broader communication strategy and interoperability goals?

This investment is intended to ensure the continued secure voice communication capabilities of the ANDVT system. Its alignment with broader strategies depends on how this modernized system integrates with other Air Force communication networks and future technology roadmaps. Ensuring interoperability with legacy and next-generation systems is key to its effectiveness and long-term value.

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: $37,059,507

Exercised Options: $37,059,507

Current Obligation: $37,059,507

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