Raytheon awarded $37.8M for AN/ARC-231 radio modernization, a firm-fixed-price contract for Phase 4 upgrades

Contract Overview

Contract Amount: $37,861,970 ($37.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-05-18

End Date: 2018-12-14

Contract Duration: 1,306 days

Daily Burn Rate: $29.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS IS A FIRM FIXED PRICE TASK ORDER FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SUITE (MARS) MOBILE USER OBJECTIVE SYSTEM AND CRYPTO MODERNIZATION (MOUS/CM) PHASE 4 UPGRADE.

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $37.9 million to RAYTHEON COMPANY for work described as: THIS IS A FIRM FIXED PRICE TASK ORDER FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SUITE (MARS) MOBILE USER OBJECTIVE SYSTEM AND CRYPTO MODERNIZATION (MOUS/CM) PHASE 4 UPGRADE. Key points: 1. The contract is a firm-fixed-price task order, indicating a defined scope and cost predictability. 2. Awarded to Raytheon Company, a major defense contractor with extensive experience in aviation systems. 3. The contract covers modernization of the AN/ARC-231 Multi-Mode Aviation Radio Suite (MARS) for the Mobile User Objective System (MOUS/CM). 4. This represents Phase 4 of the MOUS/CM upgrade, suggesting a phased approach to a larger program. 5. The contract duration is 1306 days, spanning from May 2015 to December 2018. 6. The North American Industry Classification System (NAICS) code 334220 points to manufacturing of radio and television broadcasting and wireless communications equipment.

Value Assessment

Rating: good

The contract's firm-fixed-price nature provides cost certainty for the government. Benchmarking against similar radio modernization contracts is challenging without more specific technical details and market data. However, the total award amount of $37.8 million for a multi-year upgrade phase suggests a significant investment in critical communication technology. The absence of reported overruns or significant modifications implies a well-managed execution within the initial scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but full and open competition generally leads to a more competitive pricing environment and a wider selection of qualified contractors. This process aims to ensure the government receives the best value by leveraging market forces.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through competitive bidding, ensuring that government funds are used efficiently and effectively.

Public Impact

The primary beneficiaries are U.S. military aviation units requiring enhanced and modernized communication systems. The services delivered include upgrades to the AN/ARC-231 radio suite, improving its functionality and security. The geographic impact is likely global, supporting deployed military operations wherever U.S. aviation assets are utilized. Workforce implications may include specialized technicians for installation, testing, and maintenance of the upgraded radio systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for obsolescence of older radio components if not fully replaced.
Dependence on a single contractor for critical modernization phases could pose supply chain risks.
Integration challenges with existing or future communication architectures.

Positive Signals

Firm-fixed-price contract provides cost control and predictability.
Awarded under full and open competition, suggesting competitive pricing.
Modernization of critical aviation communication systems enhances operational effectiveness and safety.
Raytheon's established expertise in defense electronics likely ensures quality and timely delivery.

Sector Analysis

This contract falls within the defense electronics manufacturing sector, specifically focusing on aviation communication equipment. The market for military radio systems is characterized by high technological requirements, stringent security protocols, and long product lifecycles. Spending in this area is driven by the need to maintain technological superiority and ensure interoperability across various platforms and services. Comparable spending benchmarks would involve other major aviation platform upgrades or communication system procurements within the Department of Defense.

Small Business Impact

The data indicates that small business participation (sb) was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor is Raytheon Company, a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting is not detailed in the provided data, but it is a common practice in large defense contracts to meet subcontracting goals.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration services to ensure contractors meet their contractual obligations. Oversight mechanisms would include regular progress reviews, quality assurance checks, and financial monitoring. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Mobile User Objective System (MOUS)
AN/ARC-231 Aviation Radio
Defense Communications Modernization Programs
Aviation Electronics Upgrades

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Dependence on a single contractor for critical modernization phases.
Potential integration challenges with evolving military networks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.9 million to RAYTHEON COMPANY. THIS IS A FIRM FIXED PRICE TASK ORDER FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SUITE (MARS) MOBILE USER OBJECTIVE SYSTEM AND CRYPTO MODERNIZATION (MOUS/CM) PHASE 4 UPGRADE.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $37.9 million.

What is the period of performance?

Start: 2015-05-18. End: 2018-12-14.

What is the specific technical scope of the MOUS/CM Phase 4 upgrade for the AN/ARC-231 radio suite?

The provided data identifies the contract as a firm-fixed-price task order for the AN/ARC-231 Multi-Mode Aviation Radio Suite (MARS) Mobile User Objective System and Crypto Modernization (MOUS/CM) Phase 4 Upgrade. While the exact technical specifications of Phase 4 are not detailed, it implies enhancements to the radio's encryption capabilities and its integration with the MOUS network. This likely involves software updates, hardware modifications, and rigorous testing to ensure secure and reliable communication in diverse operational environments. The goal is to maintain the radio's relevance and effectiveness against evolving threats and technological standards.

How does the $37.8 million award compare to previous phases of the MOUS/CM upgrade program?

Direct comparison of the $37.8 million award for Phase 4 to previous phases of the MOUS/CM upgrade program is not possible with the provided data alone. Contract values can fluctuate significantly between phases due to varying technical complexities, scope changes, and market conditions. To assess this, one would need to access historical contract award data for Phases 1, 2, and 3 of the MOUS/CM upgrade for the AN/ARC-231 system. Analyzing these figures would reveal trends in spending and potentially identify any cost escalations or efficiencies across the program's lifecycle.

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

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided summary. However, for a defense communication system upgrade, typical KPIs would likely include: system reliability (e.g., Mean Time Between Failures - MTBF), operational availability, data throughput rates, successful integration with the MOUS network, compliance with cybersecurity requirements, and adherence to delivery schedules. The firm-fixed-price nature of the contract also implies that meeting the defined technical specifications and performance standards within the agreed budget is a primary measure of success.

What is Raytheon Company's track record with similar aviation communication system contracts?

Raytheon Company, now part of RTX Corporation, has a long and extensive track record in developing and manufacturing advanced defense electronics, including aviation communication systems. They are a primary contractor for numerous U.S. military platforms and have consistently delivered complex systems like radios, radar, and electronic warfare suites. Their experience with the AN/ARC-231 radio family itself, potentially through earlier versions or related programs, would be a significant indicator of their capability. A review of their contract history with the Department of Defense would reveal a pattern of successful awards and performance on similar large-scale modernization and production contracts.

Are there any identified risks associated with the long contract duration (1306 days)?

A contract duration of 1306 days (approximately 3.5 years) for a technology modernization program does present potential risks. These can include technological obsolescence, where advancements in communication technology might outpace the upgrade's capabilities during its development and deployment. There's also a risk of scope creep if requirements evolve significantly over the project's life, potentially leading to cost overruns if not managed strictly within the firm-fixed-price framework. Furthermore, geopolitical shifts or changes in military priorities could impact the program's relevance or funding. Effective program management, including regular reviews and proactive risk mitigation strategies, is crucial to address these challenges.

What is the estimated value of the AN/ARC-231 radio system in the broader defense communications market?

The AN/ARC-231 is a widely used tactical airborne radio system, and its modernization represents a significant segment within the broader defense communications market. While specific market share data for this particular radio suite is not readily available, the continuous upgrades and sustainment contracts indicate its critical role in military aviation. The overall defense communications market is substantial, encompassing satellite communications, tactical radios, secure networks, and related software. The demand is driven by the need for secure, reliable, and interoperable communication capabilities for global military operations, making systems like the AN/ARC-231 essential components.

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

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: $37,861,970

Exercised Options: $37,861,970

Current Obligation: $37,861,970

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T06DA008

IDV Type: IDC

Timeline