DoD's $263M Advanced Technology Support Program contract awarded to Raytheon Company for microelectronic capability solutions

Contract Overview

Contract Amount: $262,996,909 ($263.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-09-25

End Date: 2028-03-31

Contract Duration: 918 days

Daily Burn Rate: $286.5K/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 CONTINUED REFINEMENT, ENHANCEMENT, AND DELIVERY OF SENSE AND INTERCEPT EQUIPMENT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $263.0 million to RAYTHEON COMPANY for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR CONTINUED REFINEMENT, ENHANCEMENT, AND DELIVERY OF SENSE AND INTERCEPT EQUIPMENT Key points: 1. Contract focuses on enhancing sense and intercept equipment, critical for defense capabilities. 2. Raytheon Company, a major defense contractor, holds this significant award. 3. The contract duration of 918 days suggests a sustained need for these advanced technologies. 4. Awarded under full and open competition, indicating a broad market solicitation. 5. The contract type (Cost Plus Fixed Fee) may present cost control challenges. 6. Performance is located in Arizona, a state with a growing defense industrial base.

Value Assessment

Rating: fair

The contract's value of $263 million over approximately 2.5 years warrants careful scrutiny. While specific performance metrics are not detailed, the Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed diligently. Benchmarking this against similar advanced technology development contracts is challenging without more granular data on the specific capabilities being acquired. However, the scale suggests a significant investment in a specialized area.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This process is generally expected to yield competitive pricing and innovative solutions. The number of bidders is not specified, but the 'full and open' designation implies a robust competitive environment was sought.

Taxpayer Impact: A competitive bidding process for this contract is beneficial for taxpayers as it increases the likelihood of securing the best value and prevents potential price gouging.

Public Impact

The Department of Defense benefits from enhanced sense and intercept equipment, improving national security. Advanced microelectronic capabilities will be developed and refined, supporting future defense technologies. The contract's performance in Arizona may stimulate the local defense technology workforce and economy. This investment supports the modernization of military sensing and interception systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor spending without strict cost ceilings.
Lack of specific performance metrics makes it difficult to assess the true value for money.
The long duration of the contract requires ongoing oversight to ensure continued alignment with evolving defense needs.

Positive Signals

Awarded through full and open competition, suggesting a competitive market was engaged.
Focus on advanced technology development aligns with strategic defense modernization goals.
The contract supports critical national security functions related to sensing and interception.

Sector Analysis

This contract falls within the Engineering Services sector, specifically focusing on advanced microelectronics for defense applications. The market for specialized defense electronics is characterized by high barriers to entry, significant R&D investment, and close ties to government funding. Comparable spending in this niche area is difficult to pinpoint without more specific technical details, but it represents a crucial component of the broader defense industrial base.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this contract. This suggests that the primary award was made to a large prime contractor, Raytheon Company. Subcontracting opportunities for small businesses may exist within the performance of this contract, but they are not explicitly detailed in the award information. Further analysis would be needed to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and program management offices, potentially including the Defense Contract Management Agency (DCMA). The Cost Plus Fixed Fee structure necessitates robust financial oversight to monitor expenditures and ensure compliance with the fixed fee. Transparency regarding specific deliverables and performance against objectives would be key to assessing accountability.

Related Government Programs

Advanced Persistent Threats (APT) Defense Programs
Electronic Warfare Systems Development
Intelligence, Surveillance, and Reconnaissance (ISR) Technology
Defense Research and Development (R&D) Contracts

Risk Flags

Cost Plus Fixed Fee contract type may lead to cost overruns.
Lack of specific performance metrics hinders value assessment.
Potential for contractor to prioritize profit over cost efficiency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $263.0 million to RAYTHEON COMPANY. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR CONTINUED REFINEMENT, ENHANCEMENT, AND DELIVERY OF SENSE AND INTERCEPT EQUIPMENT

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 $263.0 million.

What is the period of performance?

Start: 2025-09-25. End: 2028-03-31.

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

Raytheon Company, now part of RTX Corporation, has a long and extensive history of contracting with the Department of Defense, particularly in areas related to advanced technologies, aerospace, and defense systems. They are a prime contractor on numerous large-scale programs involving complex engineering, electronics, and weapon systems. Their track record includes developing and producing sophisticated sensors, communication systems, and electronic warfare capabilities. While specific performance details for past contracts are often sensitive, Raytheon is generally considered a capable and experienced provider of advanced technological solutions for military applications. However, like any large defense contractor, they have also faced scrutiny regarding cost, schedule, and performance on certain programs, necessitating diligent oversight by the DoD.

How does the $263 million value compare to other microelectronics development contracts within the DoD?

The $263 million value for the Advanced Technology Support Program (ATSP) contract is substantial, indicating a significant investment in microelectronic capability solutions. Comparing this directly to other DoD microelectronics contracts requires access to a comprehensive database of similar awards, including their scope, duration, and specific technological focus. However, contracts in the realm of advanced defense electronics, particularly those involving cutting-edge research, development, and integration of specialized equipment like sense and intercept systems, often run into the hundreds of millions of dollars. This figure suggests a multi-year effort to refine and enhance critical defense capabilities, aligning with the general trend of increasing investment in high-tech defense solutions.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced technology development?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, especially for advanced technology development, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. If the project's costs exceed initial estimates, the government bears the burden of these increased expenses. For advanced technology, where R&D can be unpredictable and requirements may evolve, this risk is amplified. Contractors may have less incentive to control costs rigorously compared to fixed-price contracts, as their profit is fixed regardless of the final cost. Effective oversight, detailed cost tracking, and clear definition of allowable costs are crucial to mitigate these risks.

What is the expected impact of this contract on the advancement of sense and intercept equipment?

This contract is expected to significantly advance the capabilities of sense and intercept equipment by focusing on the 'progressive microelectronic capability solutions for continued refinement, enhancement, and delivery.' This implies that the contract will drive innovation in the underlying microelectronic components and architectures that power these systems. Advancements could include improved sensitivity, faster processing, reduced size and weight, enhanced resistance to countermeasures, and greater adaptability to new threats. The refinement and enhancement of these core technologies are crucial for maintaining a technological edge in intelligence gathering, electronic warfare, and defensive operations.

How has DoD spending on microelectronics and related engineering services trended in recent years?

DoD spending on microelectronics and related engineering services has generally trended upwards in recent years, driven by a strategic imperative to maintain technological superiority and address evolving national security threats. There's a recognized vulnerability in the defense supply chain for critical components, including advanced semiconductors. Consequently, the DoD has increased investments in research, development, and domestic production capabilities for microelectronics. This includes funding for advanced materials, chip design, fabrication facilities, and the specialized engineering services required to integrate these components into complex defense systems. Contracts like the ATSP reflect this broader trend of prioritizing and investing in cutting-edge electronic capabilities.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $262,996,909

Exercised Options: $262,996,909

Current Obligation: $262,996,909

Subaward Activity

Number of Subawards: 44

Total Subaward Amount: $23,181,330

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