Raytheon Company awarded $40.6M contract for AN/ARC 231 radios, supporting Army production line needs

Contract Overview

Contract Amount: $40,603,544 ($40.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2014-09-30

End Date: 2017-05-31

Contract Duration: 974 days

Daily Burn Rate: $41.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TO PROCURE AN/ARC 231 RADIOS AND EQUIPMENT TO SUPPORT PRODUCTION LINE NEEDS IN FY15.

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808, UNITED STATES OF AMERICA

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $40.6 million to RAYTHEON COMPANY for work described as: TO PROCURE AN/ARC 231 RADIOS AND EQUIPMENT TO SUPPORT PRODUCTION LINE NEEDS IN FY15. Key points: 1. Contract value of $40.6 million for radios and equipment. 2. Procurement supports Army production line needs. 3. Awarded to Raytheon Company. 4. Contract type is Firm Fixed Price. 5. Duration of the contract is 974 days. 6. Competition was Full and Open. 7. Small business set-aside was not utilized. 8. Contract awarded in Indiana.

Value Assessment

Rating: good

The contract value of $40.6 million appears reasonable for the procurement of specialized radio equipment to support production line needs. Benchmarking against similar procurements for military communication systems would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that cost risks are largely borne by the contractor, which can be beneficial for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bids suggests a moderate level of competition for this specific requirement. A higher number of bidders typically leads to more competitive pricing and a wider range of technical solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the best value. The 3 bids received suggest a reasonable, though not intensely competitive, environment for this procurement.

Public Impact

The U.S. Army benefits from the acquisition of essential radio equipment. Production line needs for AN/ARC 231 radios are met. The contract supports manufacturing and assembly operations. Workforce in Indiana may be impacted by production support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for obsolescence of radio technology over the contract duration.
Dependence on a single contractor for critical production line support.

Positive Signals

Firm fixed-price contract limits cost overruns for the government.
Full and open competition ensures a broad search for qualified bidders.
Awarded to a known defense contractor with relevant experience.

Sector Analysis

This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. The market for military communication systems is characterized by high technological requirements, stringent quality standards, and significant government investment. Comparable spending benchmarks would involve analyzing other procurements for tactical radio systems and related electronic warfare equipment within the Department of Defense.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless Raytheon Company engages in significant small business subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes the contractor to meet specifications within budget. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

AN/ARC Radios
Military Communications Equipment
Department of Defense Production Support
Tactical Radio Systems

Risk Flags

Potential for technology obsolescence
Dependence on single source for production support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.6 million to RAYTHEON COMPANY. TO PROCURE AN/ARC 231 RADIOS AND EQUIPMENT TO SUPPORT PRODUCTION LINE NEEDS IN FY15.

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 Army).

What is the total obligated amount?

The obligated amount is $40.6 million.

What is the period of performance?

Start: 2014-09-30. End: 2017-05-31.

What is the specific technical capability of the AN/ARC 231 radio system being procured?

The AN/ARC-231 is a modern, software-defined, multi-mission airborne radio system designed for tactical air-to-air and air-to-ground communications. It operates across a wide frequency range and supports various waveforms, including SINCGARS (Single Channel Ground and Airborne Radio System) and HAVE QUICK II. Its capabilities are crucial for maintaining situational awareness and command and control in complex battlefield environments. The procurement aims to ensure sufficient supply to support ongoing production lines, indicating a sustained need for this technology within the Army's aviation assets.

How does the $40.6 million contract value compare to historical spending on AN/ARC 231 radios?

Analyzing historical spending on AN/ARC 231 radios requires access to detailed contract databases. However, a contract value of $40.6 million for production line support in FY15 suggests a significant investment. Without specific historical data points for unit costs or total procurement values over time, it's challenging to definitively benchmark this award. Factors such as inflation, technological upgrades, and changes in production volume would influence year-over-year comparisons. This award likely represents a substantial portion of the annual requirement for these radios.

What are the key performance risks associated with this contract for Raytheon Company?

Key performance risks for Raytheon Company include meeting the production schedule and quality standards for the AN/ARC 231 radios. Given the firm fixed-price nature of the contract, any cost overruns due to production inefficiencies, supply chain disruptions, or unforeseen technical challenges would directly impact their profit margin. Ensuring the radios meet all stringent military specifications and performance requirements is paramount. Furthermore, managing the logistics of delivering the equipment to support the Army's production line needs without delays is critical to avoid penalties or contract disputes.

What is the expected impact of this contract on the operational readiness of Army aviation units?

This contract is expected to have a positive impact on the operational readiness of Army aviation units by ensuring a consistent supply of critical AN/ARC 231 radios. These radios are vital for secure and reliable communication between aircraft and ground forces, as well as between aircraft. By supporting the production line, the contract helps maintain the availability of modern communication equipment, which is essential for mission success, pilot safety, and effective command and control in tactical operations. A stable supply chain for these radios directly contributes to the overall combat effectiveness of Army aviation.

Were there any significant issues or performance concerns in previous contracts awarded to Raytheon Company for similar radio systems?

Assessing previous performance issues requires a deep dive into contract performance reports and historical data for Raytheon Company's contracts related to military radio systems. Without specific access to such detailed records, it's difficult to identify past concerns. However, Raytheon is a major defense contractor with extensive experience in producing communication systems. Generally, large contractors are subject to performance evaluations, and significant issues would typically be documented in contract databases. It is advisable to consult specific contract performance histories for a definitive answer.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1010 PRODUCTION RD, FORT WAYNE, IN, 46808

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $40,603,544

Exercised Options: $40,603,544

Current Obligation: $40,603,544

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T06DA008

IDV Type: IDC

Timeline