DoD Awards Raytheon $37.7M for AN/AAS-54 EO/IR System Retrofit Kit Development

Contract Overview

Contract Amount: $37,666,360 ($37.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-03-21

End Date: 2027-04-28

Contract Duration: 768 days

Daily Burn Rate: $49.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/AAS-54 EO/IR SYSTEM RETROFIT KIT DEVELOPMENT AND PRODUCTION LINE

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $37.7 million to RAYTHEON COMPANY for work described as: AN/AAS-54 EO/IR SYSTEM RETROFIT KIT DEVELOPMENT AND PRODUCTION LINE Key points: 1. Significant investment in advanced sensor technology for defense applications. 2. Sole-source award to Raytheon Company, a major defense contractor. 3. Potential for cost overruns or schedule delays given the complexity of development and production. 4. Focus on enhancing situational awareness and targeting capabilities.

Value Assessment

Rating: fair

The award amount of $37.7M for development and production line setup appears reasonable for a specialized defense system. However, without detailed cost breakdowns or benchmarks for similar retrofit kits, a definitive assessment of value is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon. This limits price discovery and potentially leads to higher costs compared to a competitive procurement.

Taxpayer Impact: Taxpayer funds are being used for a sole-source contract, which may not represent the best possible value due to the lack of competition.

Public Impact

Enhances critical intelligence, surveillance, and reconnaissance (ISR) capabilities for military platforms. Supports the modernization of existing defense assets with advanced electro-optical/infrared (EO/IR) technology. Contributes to improved target identification and tracking in various operational environments. Potential for follow-on production contracts, extending the program's lifecycle and investment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Development and production line setup can be prone to cost overruns.
Long contract duration (768 days) increases exposure to market fluctuations.

Positive Signals

Addresses a critical defense capability need.
Award to an established prime contractor with relevant expertise.
Firm Fixed Price contract provides cost certainty if scope is well-defined.

Sector Analysis

This contract falls within the Defense sector, specifically in the manufacturing of advanced sensor systems. Spending in this area is driven by the need for technological superiority and modernization of military hardware. Benchmarks for similar complex system development and production lines are highly specialized.

Small Business Impact

The contract is awarded to Raytheon Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses in the provided data, which is common for sole-source, high-technology defense procurements.

Oversight & Accountability

Oversight will be provided by the Defense Contract Management Agency (DCMA). Given the sole-source nature and development focus, robust oversight is crucial to manage costs, schedule, and technical performance effectively.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition may lead to inflated costs.
Technical risks associated with developing and establishing a new production line.
Potential for scope creep during the development phase.
Dependency on a single contractor for critical defense technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.7 million to RAYTHEON COMPANY. AN/AAS-54 EO/IR SYSTEM RETROFIT KIT DEVELOPMENT AND PRODUCTION LINE

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $37.7 million.

What is the period of performance?

Start: 2025-03-21. End: 2027-04-28.

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

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The Department of Defense should have documented this justification. To ensure fair pricing, they may rely on historical pricing data, independent cost estimates, or price analysis techniques to validate Raytheon's proposed costs.

What are the key performance metrics and milestones for this development and production line setup, and how will they be monitored?

Key performance metrics would likely include successful integration of the retrofit kit onto target platforms, achievement of specified EO/IR performance standards (e.g., resolution, sensitivity, range), and establishment of a reliable production process. Milestones would encompass design reviews, prototype testing, production readiness reviews, and initial production deliveries. DCMA will monitor these through regular progress reports, site visits, and technical reviews.

What is the projected lifecycle cost of the AN/AAS-54 system, including sustainment and potential future upgrades, beyond this initial development contract?

The provided data only covers the initial development and production line setup. The full lifecycle cost would encompass sustainment, maintenance, spare parts, potential software updates, and future hardware upgrades or modifications. Estimating this requires further analysis of operational requirements, expected system lifespan, and planned modernization efforts.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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

Financial Breakdown

Contract Ceiling: $61,701,695

Exercised Options: $61,701,695

Current Obligation: $37,666,360

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $1,728,428

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA850925DB004

IDV Type: IDC

Timeline