DoD Awards Raytheon $173M for CAAP ASIC Life-Time Buy, Ammunition Manufacturing

Contract Overview

Contract Amount: $172,992,717 ($173.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-09-23

End Date: 2025-10-31

Contract Duration: 1,134 days

Daily Burn Rate: $152.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CAAP ASIC LIFE-TIME BUY

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $173.0 million to RAYTHEON COMPANY for work described as: CAAP ASIC LIFE-TIME BUY Key points: 1. Significant contract value of $173 million for critical ammunition components. 2. Raytheon Company is the sole awardee, indicating a specific capability or existing relationship. 3. The contract spans over three years, suggesting a long-term need for these components. 4. This award falls under the Ammunition (except Small Arms) Manufacturing sector.

Value Assessment

Rating: good

The contract is a Firm Fixed Price type, which provides cost certainty. The awarded amount of $173 million appears reasonable for a life-time buy of specialized ASIC components for ammunition, though a direct benchmark is difficult without more specific cost data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting multiple vendors had the opportunity to bid. However, the 'DELIVERY ORDER' designation implies this might be one order under a larger, potentially pre-existing contract vehicle, which could influence the price discovery process.

Taxpayer Impact: The use of full and open competition aims to secure the best value for taxpayers. The firm fixed price structure further protects against cost overruns.

Public Impact

Ensures continued supply of critical components for defense munitions. Supports Raytheon's manufacturing capabilities and associated workforce. Contributes to the readiness of Air Force operational units. Potential for follow-on contracts based on this life-time buy award.

Waste & Efficiency Indicators

Waste Risk Score: 75 / 10

Warning Flags

Lack of specific unit cost data for detailed price analysis.
Potential for limited competition if this is a follow-on to a sole-source effort.

Positive Signals

Firm Fixed Price contract type.
Awarded under Full and Open Competition.
Addresses a long-term, life-time buy requirement.

Sector Analysis

This contract falls within the Ammunition (except Small Arms) Manufacturing sector, a critical area for defense readiness. Spending in this sector is often driven by strategic needs and technological advancements in ordnance.

Small Business Impact

The data indicates the prime contractor is Raytheon Company, a large business. There is no explicit mention of small business participation in this specific award, suggesting potential for subcontracting opportunities that would need further investigation.

Oversight & Accountability

The Department of the Air Force is the contracting activity, overseen by the Department of Defense. Standard procurement regulations and oversight mechanisms are expected to be in place to ensure contract compliance and fiscal responsibility.

Related Government Programs

Ammunition (except Small Arms) Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Potential for technological obsolescence over the contract duration.
Limited visibility into specific unit pricing for detailed analysis.
Risk of overstocking or understocking if future demand forecasts are inaccurate.
No explicit mention of small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $173.0 million to RAYTHEON COMPANY. CAAP ASIC LIFE-TIME BUY

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 $173.0 million.

What is the period of performance?

Start: 2022-09-23. End: 2025-10-31.

What is the projected unit cost of the CAAP ASIC components, and how does it compare to industry benchmarks for similar specialized electronic components?

The provided data does not include specific unit cost information for the CAAP ASIC components. A precise comparison to industry benchmarks is therefore not possible. However, given the specialized nature of ASICs for military applications and the 'life-time buy' designation, costs are likely to be higher than commercial-grade components due to stringent reliability, performance, and testing requirements.

What specific risks are associated with a 'life-time buy' for ammunition components, particularly concerning technological obsolescence or future demand fluctuations?

A 'life-time buy' mitigates immediate supply chain risks but introduces long-term obsolescence concerns if the technology becomes outdated before the end of the intended lifespan. It also ties up significant capital and may not perfectly align with future, potentially reduced, demand, leading to inventory carrying costs or the risk of overstocking if requirements change.

How effectively does the 'full and open competition' method ensure optimal value and innovation for specialized defense components like the CAAP ASIC?

Full and open competition is designed to maximize value by fostering a competitive environment that drives down prices and encourages innovation. For specialized components, its effectiveness depends on the number of qualified vendors capable of meeting stringent technical requirements. If only a few vendors can produce the CAAP ASIC, the competitive pressure might be less intense, potentially impacting the ultimate value achieved.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $172,992,717

Exercised Options: $172,992,717

Current Obligation: $172,992,717

Actual Outlays: $4,831,094

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $69,655,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865621DA004

IDV Type: IDC

Timeline