Raytheon Company awarded $21.7M for AN/ARC-231 radio hardware, supporting Army production needs

Contract Overview

Contract Amount: $21,694,127 ($21.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-12-08

End Date: 2017-11-01

Contract Duration: 694 days

Daily Burn Rate: $31.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS D.O. (KX06) IS TO PROCURE HARDWARE ITEMS FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SYSTEM (MARS)TO SUPPORT PRODUCTION LINE NEEDS IN FISCAL YEAR (FY) 2016.

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $21.7 million to RAYTHEON COMPANY for work described as: THE PURPOSE OF THIS D.O. (KX06) IS TO PROCURE HARDWARE ITEMS FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SYSTEM (MARS)TO SUPPORT PRODUCTION LINE NEEDS IN FISCAL YEAR (FY) 2016. Key points: 1. Contract value of $21.7 million for hardware procurement. 2. Supports production line needs for the AN/ARC-231 multi-mode aviation radio system. 3. Awarded to Raytheon Company, a major defense contractor. 4. Contract type is Firm Fixed Price, indicating price certainty. 5. Delivery Order issued under a larger contract vehicle. 6. Duration of the delivery order is approximately 694 days.

Value Assessment

Rating: good

The contract value of $21.7 million appears reasonable for procuring specialized aviation radio hardware. Benchmarking against similar procurements for communication systems would provide a more precise value-for-money assessment. The Firm Fixed Price contract type suggests that pricing was determined upfront, which can be advantageous for the government if the contractor's cost estimates were accurate. Without specific per-unit cost data or comparisons to market rates for the AN/ARC-231 system, a definitive value assessment is challenging, but the overall award size is within expected ranges for such defense systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The data shows 3 bids were received, suggesting a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for maximizing price discovery and ensuring fair access for contractors, the number of bidders (3) might indicate some specialization or limited market for this particular hardware.

Taxpayer Impact: A full and open competition, even with a moderate number of bidders, generally benefits taxpayers by encouraging competitive pricing and potentially leading to lower overall costs compared to sole-source or limited competitions.

Public Impact

The U.S. Army benefits from the timely procurement of essential hardware for its aviation radio systems. Ensures the continued production and operational readiness of aircraft equipped with the AN/ARC-231 system. Supports the defense industrial base, particularly in the manufacturing of specialized electronic communication equipment. Indirectly impacts aviation personnel who rely on these communication systems for mission success.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases if follow-on contracts are not competitively bid.
Reliance on a single contractor (Raytheon) for critical hardware components could pose supply chain risks.

Positive Signals

Awarded through full and open competition, promoting market fairness.
Firm Fixed Price contract type provides cost certainty for the government.
Supports a critical defense system, ensuring operational readiness.

Sector Analysis

This contract falls within the broader sector of Defense manufacturing, specifically focusing on electronic communication equipment for aviation. The market for military-grade communication systems is characterized by high technical requirements, stringent quality standards, and often long product lifecycles. Spending in this area is driven by defense modernization efforts and the need to maintain existing fleets. Comparable spending benchmarks would involve analyzing other contracts for similar aviation communication systems or electronic warfare components within the Department of Defense.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting goals for this delivery order. As it was awarded to Raytheon Company, a large prime contractor, it is possible that subcontracting opportunities may exist for small businesses within Raytheon's supply chain. However, without explicit subcontracting plans or set-aside information, the direct impact on the small business ecosystem is not quantifiable from this data alone.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. The Firm Fixed Price nature of the contract provides a degree of accountability regarding cost. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

AN/ARC-231 Multi-Mode Aviation Radio System
Defense Communications Systems
Aviation Electronics Manufacturing
Department of the Army Procurement

Risk Flags

Potential supply chain vulnerability for specialized electronic components.
Reliance on a single large prime contractor for critical hardware.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.7 million to RAYTHEON COMPANY. THE PURPOSE OF THIS D.O. (KX06) IS TO PROCURE HARDWARE ITEMS FOR THE AN/ARC-231 MULTI-MODE AVIATION RADIO SYSTEM (MARS)TO SUPPORT PRODUCTION LINE NEEDS IN FISCAL YEAR (FY) 2016.

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 $21.7 million.

What is the period of performance?

Start: 2015-12-08. End: 2017-11-01.

What is Raytheon Company's track record with the AN/ARC-231 system and similar aviation radio procurements?

Raytheon Company, now part of RTX Corporation, has a long history as a prime contractor for defense systems, including aviation electronics. They are known to be a significant producer of the AN/ARC-231 system, which is a widely used multi-mode aviation radio. Their track record with this specific system likely involves numerous previous awards, modifications, and sustainment contracts, indicating a deep familiarity and established production capability. Assessing their broader track record would involve examining their performance on other complex communication and avionics programs, looking at on-time delivery, quality metrics, and responsiveness to government requirements. Historical data suggests Raytheon is a reliable, albeit large, supplier in this specialized defense market.

How does the $21.7 million award compare to historical spending on the AN/ARC-231 system?

The $21.7 million award for hardware items for the AN/ARC-231 system in FY2016 represents a specific procurement action to support production line needs. To compare this to historical spending, one would need to aggregate all previous and subsequent contract actions (delivery orders, modifications, prime contracts) related to the AN/ARC-231 system across all branches of service and fiscal years. This would reveal the total lifecycle cost and annual spending trends. Without access to a comprehensive contract database covering the entire history of the AN/ARC-231 program, it's difficult to definitively state if $21.7 million is high or low in a historical context. However, it appears to be a substantial single award for production hardware.

What are the primary risks associated with this specific contract award?

The primary risks associated with this contract include potential supply chain disruptions for critical hardware components, especially if sourced from limited suppliers. There's also a risk of cost overruns if the Firm Fixed Price contract did not adequately account for unforeseen material cost increases or production challenges, although this is mitigated by the pricing structure. Programmatic risk exists if the AN/ARC-231 system itself faces obsolescence or is superseded by newer technology, potentially reducing the long-term need for this hardware. Furthermore, reliance on a single large contractor like Raytheon can introduce vendor lock-in risks and limit future competitive opportunities if not managed carefully through strategic sourcing and contract phasing.

How effective is the AN/ARC-231 system, and does this contract contribute to its overall program effectiveness?

The AN/ARC-231 is a widely deployed and generally effective multi-mode aviation radio system used by numerous military aircraft platforms. Its effectiveness stems from its ability to provide secure, reliable voice and data communications across various frequency bands and operating modes, crucial for tactical operations. This contract, by ensuring the procurement of necessary hardware to support the production line, directly contributes to the ongoing availability and sustainment of the AN/ARC-231 system. By maintaining production capabilities, the contract helps ensure that the Army can continue to equip new platforms and replace aging units, thereby supporting the overall effectiveness and operational readiness derived from this critical communication capability.

What is the typical duration and value range for delivery orders of this nature?

Delivery orders for specialized hardware like aviation radio components can vary significantly in duration and value depending on the quantity of items procured, the complexity of the hardware, and the specific production needs being met. A duration of 694 days (approximately 23 months) is a substantial period, suggesting a significant production run or a phased delivery schedule. The value of $21.7 million is also considerable for a single delivery order, indicating a large quantity of hardware or high-value components. Typical ranges can span from a few months to several years and from tens of thousands to tens of millions of dollars, making this award fall within the higher end of the typical range for such specialized defense procurements.

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: $21,694,127

Exercised Options: $21,694,127

Current Obligation: $21,694,127

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T06DA008

IDV Type: IDC

Timeline