DoD's $213.8M Advanced Technology Support Program contract for microelectronics solutions awarded to Raytheon Company

Contract Overview

Contract Amount: $21,384,559 ($21.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-09-26

End Date: 2026-09-30

Contract Duration: 734 days

Daily Burn Rate: $29.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONICS CAPABILITY SOLUTIONS FOR ENGINEERING SERVICES TO DESIGN, DEVELOP, TEST, AND INTEGRATE SOLUTIONS TO IMPROVE PERFORMANCE IN A COMBAT TRAINING SYTEM.

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $21.4 million to RAYTHEON COMPANY for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONICS CAPABILITY SOLUTIONS FOR ENGINEERING SERVICES TO DESIGN, DEVELOP, TEST, AND INTEGRATE SOLUTIONS TO IMPROVE PERFORMANCE IN A COMBAT TRAINING SYTEM. Key points: 1. Contract aims to enhance combat training system performance through advanced microelectronics. 2. Raytheon Company, a major defense contractor, secured this significant award. 3. The contract utilizes a Firm Fixed Price structure, indicating defined cost expectations. 4. Performance period spans over two years, suggesting a medium-term project. 5. The award is a Delivery Order under a larger contract vehicle. 6. Focus on engineering services for design, development, testing, and integration. 7. No small business set-aside or subcontracting noted, potentially limiting small business participation.

Value Assessment

Rating: good

The contract value of $213.8 million for engineering services over approximately two years appears reasonable given the scope of acquiring progressive microelectronics capability solutions. Benchmarking against similar large-scale defense engineering contracts for advanced technology development suggests this pricing is within expected ranges. The Firm Fixed Price (FFP) structure provides cost certainty for the government, although it places cost risk on the contractor. Without specific per-unit cost data for the microelectronics solutions, a precise value-for-money assessment is challenging, but the overall contract size aligns with the complexity of developing and integrating advanced systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The data does not specify the number of bidders, but full and open competition generally fosters a competitive environment that can lead to better pricing and innovation. The Defense Microelectronics Activity's approach suggests a commitment to exploring the broadest possible range of capabilities and solutions available in the market.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value by encouraging multiple companies to bid, driving down prices and improving the quality of services.

Public Impact

The primary beneficiaries are the U.S. military personnel who will utilize the enhanced combat training system. Services delivered include design, development, testing, and integration of advanced microelectronics. The geographic impact is likely concentrated within Department of Defense facilities and potentially Raytheon's operational sites. Workforce implications include specialized engineering and technical roles within Raytheon and potentially its subcontractors. The contract contributes to the modernization of defense training capabilities, improving readiness and effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise in microelectronics development under a fixed-price contract.
Dependence on a single large contractor (Raytheon) for critical advanced technology solutions.
Limited visibility into the specific performance metrics of the microelectronics solutions without further detail.
Risk of technology obsolescence if development timelines are extended or if market advancements outpace the project.

Positive Signals

Award to a reputable and experienced defense contractor (Raytheon Company) suggests a higher likelihood of successful execution.
The use of Firm Fixed Price contract type provides cost certainty for the government.
Focus on advanced technology development aligns with strategic defense modernization goals.
Full and open competition process theoretically ensures a wide selection of potential solutions and providers.

Sector Analysis

The defense microelectronics sector is a critical and highly specialized area within the broader aerospace and defense industry. This contract falls under engineering services, specifically focusing on the design, development, and integration of advanced microelectronic solutions. The market is characterized by high R&D costs, long development cycles, and stringent performance requirements, often driven by government demand for cutting-edge capabilities. Comparable spending benchmarks for advanced technology development contracts in defense can range from tens to hundreds of millions of dollars, depending on the complexity and duration.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large defense contractor, Raytheon Company. There is no explicit information regarding subcontracting plans for small businesses. Without specific subcontracting goals or set-asides, the direct impact on the small business ecosystem for this particular contract appears limited, though large prime contractors often engage small businesses for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA) or equivalent within the Department of Defense. Accountability measures are embedded in the Firm Fixed Price contract structure, requiring Raytheon to deliver specified solutions within the agreed-upon cost. Transparency is generally maintained through contract award databases and reporting requirements, though detailed technical progress and specific cost breakdowns may be less publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Advanced Technology Support Program (ATSP)
Defense Microelectronics Activity Contracts
Combat Training System Modernization
Microelectronics Research and Development
Department of Defense Engineering Services

Risk Flags

Potential for cost overruns due to R&D complexity.
Risk of technology obsolescence.
Dependence on a single large contractor.
Cybersecurity vulnerabilities in advanced microelectronics.
Integration challenges with existing systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to RAYTHEON COMPANY. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONICS CAPABILITY SOLUTIONS FOR ENGINEERING SERVICES TO DESIGN, DEVELOP, TEST, AND INTEGRATE SOLUTIONS TO IMPROVE PERFORMANCE IN A COMBAT TRAINING SYTEM.

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 $21.4 million.

What is the period of performance?

Start: 2024-09-26. End: 2026-09-30.

What is Raytheon Company's track record with similar advanced technology development contracts for the Department of Defense?

Raytheon Company, now RTX, has a long and extensive history of performing complex engineering and technology development contracts for the Department of Defense across various domains, including aerospace, defense systems, and intelligence. They are a major prime contractor on numerous large-scale programs involving advanced materials, electronics, software, and integrated systems. Their track record includes developing and delivering sophisticated solutions for platforms like fighter jets, missile defense systems, and command and control networks. While specific performance metrics for past contracts are not detailed here, their consistent selection for high-value, technologically challenging projects indicates a generally strong capability and established relationship with the DoD. However, like any large contractor, they have faced scrutiny and performance challenges on specific programs in the past, underscoring the importance of ongoing oversight for current contracts.

How does the $213.8 million contract value compare to other DoD microelectronics or engineering services contracts?

The $213.8 million contract value for the Advanced Technology Support Program (ATSP) is substantial, placing it in the upper tier for engineering services contracts focused on specialized technology development. While the DoD procures a vast array of services, contracts in the hundreds of millions are typically reserved for programs with significant scope, duration, and technological complexity. For instance, major platform development, advanced research initiatives, or large-scale system integration efforts often fall into this spending bracket. Contracts for more routine or less technologically intensive engineering services might be in the tens of millions. This ATSP contract's value suggests a critical need for advanced microelectronics capability solutions aimed at enhancing combat training systems, indicating a significant investment in future defense readiness.

What are the primary risks associated with developing and integrating advanced microelectronics for combat training systems?

Developing and integrating advanced microelectronics for combat training systems presents several key risks. Technical risks include the inherent complexity of designing and fabricating cutting-edge semiconductor devices, potential for performance degradation under harsh operational conditions, and the challenge of ensuring interoperability with existing training infrastructure. Schedule risks can arise from lengthy development cycles, unforeseen manufacturing issues, or delays in testing and validation. Cost risks are significant, particularly with Firm Fixed Price contracts, as R&D in microelectronics is prone to unexpected expenses and the need for specialized, expensive equipment and expertise. Furthermore, the rapid pace of technological advancement means there's a risk of obsolescence if the developed solutions do not meet future training needs or if newer, superior technologies emerge during the development lifecycle. Cybersecurity vulnerabilities in the microelectronics themselves also pose a critical risk.

What is the expected program effectiveness and impact on combat readiness from this contract?

The expected program effectiveness hinges on the successful design, development, testing, and integration of advanced microelectronics to improve a combat training system. If successful, this contract should lead to more realistic, sophisticated, and responsive training environments. Enhanced training systems can better prepare military personnel for complex combat scenarios by providing higher fidelity simulations, more accurate feedback, and potentially incorporating new training methodologies. This improved preparedness directly translates to increased combat readiness, reducing the gap between training and real-world operational demands. The ultimate impact is a more skilled and adaptable fighting force, better equipped to handle current and future threats, thereby enhancing overall national security.

How has DoD spending on engineering services for advanced technology development trended in recent years?

DoD spending on engineering services for advanced technology development has generally trended upwards over recent years, driven by a strategic focus on maintaining technological superiority and modernizing military capabilities. Factors contributing to this trend include increasing geopolitical competition, the rapid evolution of technologies like artificial intelligence, cyber, and advanced materials, and the need to upgrade aging platforms and systems. The DoD consistently allocates significant portions of its budget to R&D and acquisition programs that rely heavily on specialized engineering expertise. While specific figures fluctuate annually based on budget allocations and program priorities, the overall demand for advanced engineering services to support innovation and integration of new technologies remains robust, reflecting a sustained commitment to technological advancement in defense.

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: FIRM FIXED PRICE (J)

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: $21,384,559

Exercised Options: $21,384,559

Current Obligation: $21,384,559

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