DoD's $12.8M Advanced Technology Support Program contract for microelectronics capability solutions awarded to Raytheon

Contract Overview

Contract Amount: $12,798,321 ($12.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-12-23

End Date: 2027-02-28

Contract Duration: 432 days

Daily Burn Rate: $29.6K/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 SMALL DIAMETER BOMB I.

Place of Performance

Location: GOLETA, SANTA BARBARA County, CALIFORNIA, 93117

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to RAYTHEON COMPANY for work described as: THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR SMALL DIAMETER BOMB I. Key points: 1. Contract aims to enhance microelectronic capabilities for small diameter bombs, a critical defense application. 2. Awarded via full and open competition, suggesting a broad market search for the best solution. 3. The contract duration of over 3 years indicates a need for sustained technological development. 4. Raytheon's selection highlights its established presence and capabilities in advanced defense technologies. 5. The cost-plus-fixed-fee (CPFF) contract type may allow for flexibility but requires careful oversight of costs. 6. Focus on 'progressive microelectronic capability solutions' points to innovation and future-proofing defense systems.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more granular cost data and comparison to similar R&D efforts in microelectronics for defense. The CPFF structure means the final cost is not fixed upfront, introducing potential for cost overruns if not managed diligently. However, the award to a single entity suggests a competitive process that, in theory, should have yielded a reasonable price for the defined scope. Further analysis would require understanding the specific technological advancements sought and their market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit proposals. This approach is generally favored for ensuring the widest possible access to innovative solutions and competitive pricing. The specific number of bidders is not provided, but the 'full and open' designation implies a robust competitive environment was intended.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of receiving the best value by encouraging multiple companies to bid, driving down costs through market forces.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units utilizing small diameter bombs, who will receive enhanced microelectronic capabilities. The contract will deliver advanced microelectronic solutions, potentially improving the performance, reliability, and sophistication of defense systems. The geographic impact is primarily within the defense sector, with potential for technology transfer and application in other advanced manufacturing areas. Workforce implications may include specialized engineering and technical roles within Raytheon and its potential subcontractors, focusing on cutting-edge microelectronics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to higher final costs than fixed-price contracts if not managed effectively.
Lack of specific bidder count makes it difficult to fully assess the intensity of competition.
The specialized nature of microelectronics may limit the pool of truly competitive bidders in the long run.

Positive Signals

Awarded through full and open competition, maximizing potential for diverse solutions.
Contract duration suggests a commitment to developing and integrating advanced capabilities.
Focus on 'progressive' solutions indicates a forward-looking approach to technological advancement.

Sector Analysis

The defense microelectronics sector is a highly specialized and critical area, involving the design, development, and manufacturing of advanced semiconductor and integrated circuit technologies for military applications. This contract fits within the broader defense engineering services market, which is characterized by high barriers to entry due to intellectual property, security clearances, and specialized R&D requirements. Spending in this niche is driven by the need for technological superiority and the obsolescence of existing systems. Comparable spending benchmarks would typically be found within other advanced R&D contracts for defense platforms.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if Raytheon chooses to engage them for specialized components or services. Without explicit subcontracting plans or goals, the direct benefit to the small business ecosystem from this specific award is uncertain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Microelectronics Activity (DMEA) and the Department of Defense. As a Cost Plus Fixed Fee (CPFF) contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee remains appropriate. Transparency will depend on the reporting requirements stipulated in the contract and the DoD's policies on releasing information about defense technology development. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Technology Support Program (ATSP)
Small Diameter Bomb (SDB) Program
Defense Microelectronics Activity (DMEA) Contracts
Raytheon Company Defense Contracts
Microelectronics Research and Development

Risk Flags

Cost Overrun Risk (CPFF Contract)
Technology Maturation Uncertainty
Limited Competition Visibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to RAYTHEON COMPANY. THE ADVANCED TECHNOLOGY SUPPORT PROGRAM (ATSP) CONTRACT ACQUIRES PROGRESSIVE MICROELECTRONIC CAPABILITY SOLUTIONS FOR SMALL DIAMETER BOMB I.

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 $12.8 million.

What is the period of performance?

Start: 2025-12-23. End: 2027-02-28.

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

Raytheon Company, now part of RTX, has a long and extensive history of developing advanced technologies for the Department of Defense across various domains, including aerospace, defense, and intelligence. They are a prime contractor on numerous complex programs involving sophisticated electronics, sensors, and weapon systems. Their track record includes significant contributions to missile defense, advanced radar systems, and electronic warfare capabilities. While specific details on past microelectronics development contracts for programs like the Small Diameter Bomb are proprietary, Raytheon's overall portfolio demonstrates a strong capability in handling large-scale, technologically challenging defense R&D initiatives. Performance metrics on past contracts, often assessed through contract performance reports and award fee evaluations, generally indicate a high level of technical competence, though like any large contractor, they may have faced challenges on specific projects.

How does the $12.8 million value compare to other microelectronics R&D contracts within the DoD?

The $12.8 million value for this Advanced Technology Support Program (ATSP) contract is relatively modest for a Department of Defense R&D initiative, especially in the field of advanced microelectronics. Major defense programs involving microelectronics can range from tens of millions to billions of dollars, particularly for full-scale development, production, and integration into major platforms. This contract appears to be focused on acquiring 'progressive microelectronic capability solutions,' suggesting it might be in an earlier research, prototyping, or technology maturation phase rather than full system development. Therefore, comparing it directly to large-scale production contracts would be misleading. It is more appropriately benchmarked against other targeted R&D efforts or specific technology insertion projects within the defense sector, where values can vary significantly based on the scope and duration of the research.

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, like the one awarded to Raytheon for the ATSP, 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. While the fee is fixed, the total cost is not. This can incentivize contractors to incur higher costs, as their profit margin (the fixed fee) remains constant regardless of the total expenditure. For the government, this means the final contract price could exceed initial estimates if costs escalate due to unforeseen technical challenges, scope creep, or inefficient performance. Effective oversight, stringent cost controls, and clear performance metrics are essential to mitigate these risks and ensure the government receives good value.

What is the expected impact of these 'progressive microelectronic capability solutions' on the Small Diameter Bomb's effectiveness?

The 'progressive microelectronic capability solutions' are expected to enhance the Small Diameter Bomb (SDB) by improving its performance, reliability, and potentially its mission capabilities. In microelectronics, advancements often translate to smaller, faster, more power-efficient, and more resilient components. For the SDB, this could mean improved guidance and control systems, enhanced sensor integration, better electronic warfare resistance, or increased processing power for target identification and engagement. The goal is likely to ensure the SDB remains a relevant and effective weapon system in the face of evolving threats and technological advancements, maintaining its precision strike capability while potentially reducing its size, weight, or power requirements.

How has spending on microelectronics R&D for defense programs evolved over the past five years?

Spending on microelectronics R&D for defense programs has generally seen an increasing trend over the past five years, driven by several factors. There is a recognized strategic imperative to maintain U.S. technological superiority, particularly in areas like artificial intelligence, advanced sensing, and secure communications, all of which rely heavily on cutting-edge microelectronics. Concerns about supply chain security and reliance on foreign manufacturing have also spurred domestic investment in R&D and advanced manufacturing capabilities. The Department of Defense has initiated various programs and funding initiatives aimed at revitalizing the U.S. defense industrial base for microelectronics. While specific aggregate spending figures fluctuate annually based on budget allocations and program priorities, the overall strategic focus indicates sustained or growing investment in this critical technology area.

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: 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: $12,798,321

Exercised Options: $12,798,321

Current Obligation: $12,798,321

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