Raytheon Company awarded $53M contract for ALR-69A Radar Warning Receiver for Japan Air Self-Defense Force

Contract Overview

Contract Amount: $52,991,320 ($53.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-05-29

End Date: 2022-08-31

Contract Duration: 1,555 days

Daily Burn Rate: $34.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ALR-69A RADAR WARNING RECEIVER FOR JAPAN AIR SELF-DEFENSE FORCE (JASDF)

Place of Performance

Location: GOLETA, SANTA BARBARA County, CALIFORNIA, 93117

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $53.0 million to RAYTHEON COMPANY for work described as: ALR-69A RADAR WARNING RECEIVER FOR JAPAN AIR SELF-DEFENSE FORCE (JASDF) Key points: 1. Contract awarded to a single source, raising questions about price competitiveness. 2. The contract is for a specialized defense system, indicating a niche market. 3. Performance period spans over four years, suggesting a long-term need. 4. The award is a delivery order under a larger contract, implying potential for future modifications or expansions. 5. The system is for a foreign military sale, indicating international defense cooperation. 6. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns if not managed carefully.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging due to its nature as a foreign military sale and a delivery order under a potentially larger, unstated contract. The Cost Plus Fixed Fee (CPFF) structure, while common for complex R&D or production where costs are uncertain, carries inherent risks of cost escalation. Without comparable sole-source procurements for similar advanced radar warning systems, it's difficult to definitively assess if the $53 million represents optimal value for the taxpayer or the recipient nation. Further analysis would require access to the base contract and detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or when urgent national security needs preclude a lengthy competition. The lack of competition means that the government did not receive offers from multiple vendors, potentially limiting price discovery and the opportunity to secure the best possible pricing through a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is less pressure on the contractor to offer competitive pricing. The absence of competition removes a key mechanism for ensuring cost-effectiveness.

Public Impact

The primary beneficiary is the Japan Air Self-Defense Force (JASDF), which will receive advanced radar warning capabilities. The services delivered include the provision of the ALR-69A Radar Warning Receiver system. The geographic impact is primarily Japan, enhancing its national defense capabilities. Workforce implications may include specialized manufacturing, engineering, and logistics roles within Raytheon Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing pressure.
Cost Plus Fixed Fee contract type can lead to cost overruns if not closely monitored.
Foreign military sales can be complex to manage and may involve unique logistical challenges.
Lack of detailed public information on the base contract makes comprehensive value assessment difficult.

Positive Signals

Provides critical defense technology to a key U.S. ally.
The ALR-69A is a proven system, suggesting reliability and effectiveness.
Delivery order structure allows for phased acquisition and potential future upgrades.
Award supports U.S. defense industrial base and international security cooperation.

Sector Analysis

The defense electronics sector is characterized by high R&D costs, long product lifecycles, and significant government procurement. Companies like Raytheon operate in a market where technological superiority is paramount, often leading to specialized systems and limited competition for advanced platforms. The market for radar warning receivers is a niche within this sector, serving critical military aviation needs. Comparable spending benchmarks are difficult to establish without knowing the specific configuration and capabilities of the ALR-69A system and its integration requirements.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the prime contractor being Raytheon Company. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large prime contractors often utilize small businesses in their supply chains for specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a foreign military sale, there may be additional oversight from the Defense Security Cooperation Agency (DSCA). Transparency is limited due to the sole-source nature and the foreign military sale aspect, which often involves classified or sensitive information. Inspector General jurisdiction would apply to allegations of fraud, waste, or abuse.

Related Government Programs

FMS Program Management
Airborne Electronic Warfare Systems
Radar Systems Manufacturing
Defense Industrial Base Support
International Security Cooperation Programs

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Foreign Military Sale complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.0 million to RAYTHEON COMPANY. ALR-69A RADAR WARNING RECEIVER FOR JAPAN AIR SELF-DEFENSE FORCE (JASDF)

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 $53.0 million.

What is the period of performance?

Start: 2018-05-29. End: 2022-08-31.

What is the track record of Raytheon Company in delivering similar defense electronic systems, particularly radar warning receivers?

Raytheon Company, now part of RTX Corporation, has a long and extensive track record in developing and manufacturing advanced defense electronic systems, including radar, electronic warfare, and command and control systems. They are a major prime contractor for the U.S. Department of Defense and numerous international allies. The ALR-69A itself is an evolution of previous radar warning receiver technologies, and Raytheon has been involved in its development and sustainment. Their experience in producing complex, high-reliability systems for military applications is well-established, suggesting a strong capability to deliver on this contract. However, the specific performance metrics and historical delivery timeliness for the ALR-69A to foreign customers would require deeper investigation into program-specific data.

How does the pricing of this contract compare to similar radar warning receiver systems procured by the U.S. or allied nations?

Direct price comparison for this specific ALR-69A contract is difficult due to its sole-source nature and its status as a foreign military sale (FMS). FMS pricing can be influenced by factors beyond direct procurement costs, including program support, training, and specific integration requirements for the recipient nation. Furthermore, the Cost Plus Fixed Fee (CPFF) contract type means that the final cost can vary based on actual expenses incurred, making a fixed benchmark challenging. Generally, sole-source procurements tend to be more expensive than competed ones. Without access to the detailed cost breakdown or comparable sole-source awards for similar systems, a definitive value-for-money assessment against market rates is not feasible from the provided data.

What are the primary risks associated with a sole-source award for a critical defense system like the ALR-69A?

The primary risk associated with a sole-source award for a critical defense system like the ALR-69A is the potential for inflated pricing due to the lack of competitive pressure. Without multiple bidders vying for the contract, the contractor may have less incentive to minimize costs or offer the most aggressive pricing. Another risk is the potential for reduced innovation, as the absence of competition can lessen the drive to develop more cost-effective or technologically superior solutions. Furthermore, sole-source awards can sometimes indicate a lack of readily available alternatives or a dependency on a single supplier, which can create supply chain vulnerabilities. Ensuring robust oversight and negotiation is crucial to mitigate these risks.

What is the historical spending pattern for the ALR-69A system or similar radar warning receivers by the Department of Defense or other agencies?

Historical spending data for the ALR-69A system specifically, especially in the context of foreign military sales, is not readily available in public databases. However, the Department of Defense procures a wide array of electronic warfare and radar systems. Spending on such systems can fluctuate significantly year-to-year based on modernization programs, threat assessments, and geopolitical priorities. The ALR-69A is part of the broader category of Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing (NAICS 334511). Analyzing broader spending trends within this NAICS code or within airborne electronic warfare programs could provide context, but direct historical spending on this specific variant for FMS is not easily isolated. The $53 million award represents a significant, but likely not annual, expenditure for this particular system.

How does the Cost Plus Fixed Fee (CPFF) contract type impact cost control and taxpayer value for this acquisition?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is well-defined, but the exact costs are uncertain, such as in the production of complex defense systems. Under CPFF, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure provides the contractor with an incentive to control costs, as the fee remains constant regardless of the final cost incurred. However, it does not provide the same level of cost-saving incentive as fixed-price contracts. If the contractor incurs costs significantly higher than anticipated, the government still reimburses them, potentially leading to higher overall expenditures than initially projected. Effective oversight by the government is critical to ensure that costs are reasonable and allowable, and that the fixed fee represents fair profit for the work performed.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA852317R0020

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 6380 HOLLISTER AVE, GOLETA, CA, 93117

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: $131,247,103

Exercised Options: $92,727,264

Current Obligation: $52,991,320

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $859,387

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA852318D0003

IDV Type: IDC

Timeline