DoD's $15.5M Advanced Technology Support Program contract for microelectronics solutions awarded to Raytheon Company

Contract Overview

Contract Amount: $15,509,574 ($15.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-03-19

End Date: 2026-09-30

Contract Duration: 925 days

Daily Burn Rate: $16.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR SOFTWARE SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED SYSTEM.

Place of Performance

Location: TEWKSBURY, MIDDLESEX County, MASSACHUSETTS, 01876

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $15.5 million to RAYTHEON COMPANY for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR SOFTWARE SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED SYSTEM. Key points: 1. Contract focuses on enhancing microelectronics-based systems through advanced technology support. 2. Raytheon Company, a major defense contractor, is the awardee. 3. The contract type is Cost Plus Fixed Fee, which can carry higher cost risk. 4. Performance period extends over 925 days, indicating a medium-term engagement. 5. The contract is for engineering services, specifically related to microelectronics. 6. Awarded under full and open competition, suggesting a competitive bidding process.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure warrants careful monitoring due to its potential for cost overruns compared to fixed-price contracts. Benchmarking the specific value for 'progressive microelectronic capability solutions' is challenging without detailed task orders. However, the award to a large, established contractor like Raytheon suggests a baseline level of expected performance and quality. The total value of $15.5 million over approximately 2.5 years needs to be assessed against the complexity and novelty of the microelectronic solutions required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This approach is generally favored for maximizing competition and potentially achieving better pricing and innovation. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive environment was intended.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovative solutions, leading to better value for public funds.

Public Impact

The Department of Defense benefits from improved microelectronic capabilities for its systems. Advanced software solutions will enhance the performance of existing microelectronics-based systems. The contract supports the development and integration of cutting-edge microelectronic technologies. Workforce implications may include specialized engineering and technical roles within Raytheon and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed diligently.
The specific nature of 'progressive microelectronic capability solutions' may involve inherent technical risks and uncertainties.
Reliance on a single large contractor, even from competitive bidding, can sometimes limit broader market engagement.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive process.
The contract aims to enhance critical defense technology, aligning with national security objectives.
The duration of the contract allows for focused development and integration of advanced capabilities.

Sector Analysis

The defense microelectronics sector is critical for national security, encompassing the design, development, and manufacturing of advanced semiconductor and integrated circuit technologies. This contract fits within the broader engineering services category, specifically focusing on the application of advanced technologies to enhance existing defense systems. Spending in this area is often characterized by high R&D investment, long development cycles, and a need for specialized expertise, with major players like Raytheon being key contributors.

Small Business Impact

While this contract was awarded under full and open competition and does not explicitly mention small business set-asides, large prime contractors like Raytheon are often required to meet subcontracting goals for small businesses. The extent to which small businesses will participate will depend on Raytheon's subcontracting plan and the availability of specialized small businesses capable of providing the required microelectronic solutions.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Microelectronics Activity (DMEA) and the relevant contracting officers within the Department of Defense. The CPFF contract type necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency will be maintained through contract reporting requirements, and potential issues may be addressed by the DoD Inspector General.

Related Government Programs

Defense Microelectronics Activity (DMEA) Contracts
Advanced Technology Development Programs
Microelectronics Research and Development
Department of Defense Engineering Services

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost escalations.
The 'progressive' nature of the technology implies inherent technical risks and uncertainties.
Dependence on a single large contractor may limit broader ecosystem engagement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.5 million to RAYTHEON COMPANY. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR SOFTWARE SOLUTIONS TO ADD CAPABILITY AND IMPROVE PERFORMANCE OF THE MICROELECTRONICS-BASED SYSTEM.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Microelectronics Activity).

What is the total obligated amount?

The obligated amount is $15.5 million.

What is the period of performance?

Start: 2024-03-19. End: 2026-09-30.

What is the historical spending pattern for the Advanced Technology Support Program (ATSP) contract?

The provided data indicates this is a new contract awarded on March 19, 2024, with a total value of $15,509,574.46 and an estimated completion date of September 30, 2026. There is no historical spending data available for this specific ATSP contract in the provided information. To understand historical spending patterns, one would need to look for previous contracts under the same or similar program names, or analyze broader spending trends within the Defense Microelectronics Activity (DMEA) for microelectronics capability solutions.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in terms of risk and value for this type of service?

Cost Plus Fixed Fee (CPFF) contracts are common for research and development or services where the scope is not precisely defined at the outset, allowing for flexibility. The government agrees to pay the contractor's actual costs plus a fixed fee representing profit. This structure shifts some cost risk to the government, as the final price is not capped. Compared to Fixed-Price contracts, CPFF can be less cost-certain for the government but may encourage innovation and allow for adaptation to evolving technical requirements, which is often the case in advanced technology development like microelectronics. Value is realized if the contractor delivers the required advanced capabilities effectively and efficiently within the negotiated fee.

What is Raytheon Company's track record with similar microelectronics or advanced technology support contracts for the DoD?

Raytheon Company (now RTX) is a major defense contractor with extensive experience in advanced technologies, including microelectronics, aerospace, and defense systems. They have a long history of performing complex engineering and technology development contracts for the Department of Defense. While specific details of their past performance on contracts identical to this ATSP are not provided, their general profile suggests a strong capability in delivering sophisticated technological solutions. A deeper dive into their contract history would reveal specific projects, performance ratings, and any past issues related to cost, schedule, or technical performance on similar endeavors.

What are the key performance indicators (KPIs) likely being used to measure the success of this contract?

Key performance indicators for this contract would likely focus on the successful development and integration of 'progressive microelectronic capability solutions.' This could include metrics related to technical performance improvements in the targeted microelectronics-based systems, adherence to project milestones and delivery schedules, quality of the software solutions developed, and the effectiveness of the enhanced system performance. For a CPFF contract, cost control and efficient use of resources would also be implicitly monitored, even though the final cost is variable. Successful demonstration of the new capabilities would be a primary indicator.

What is the estimated market size for advanced technology support in defense microelectronics, and how does this contract fit within it?

The market for advanced technology support in defense microelectronics is substantial and growing, driven by the need for secure, high-performance, and resilient electronic systems for national defense. While precise figures for 'advanced technology support' within defense microelectronics are difficult to isolate, the broader defense electronics market is valued in the tens of billions of dollars annually. This $15.5 million contract represents a focused investment by the DoD to enhance specific capabilities. It fits within the sector by addressing a critical need for innovation and performance improvement in a technologically sensitive area, likely contributing to the overall modernization efforts within the defense industrial base.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ072715R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $18,521,907

Exercised Options: $18,521,907

Current Obligation: $15,509,574

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $44,160

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ072716D0006

IDV Type: IDC

Timeline