DoD awards $165.8M for circuit card assembly, with Raytheon Company as the sole provider

Contract Overview

Contract Amount: $16,576,580 ($16.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-12-23

End Date: 2028-09-18

Contract Duration: 1,000 days

Daily Burn Rate: $16.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CIRCUIT CARD ASSEMB

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $16.6 million to RAYTHEON COMPANY for work described as: CIRCUIT CARD ASSEMB Key points: 1. Contract value represents a significant investment in critical electronic components. 2. Sole-source award raises questions about potential price inflation and limited market engagement. 3. Long contract duration suggests a sustained need for these specialized manufacturing services. 4. Fixed-price contract type aims to control costs, but competition is key to realizing savings. 5. Geographic concentration in Arizona for manufacturing may indicate specialized industrial capabilities. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

The contract's value of $165.8 million over approximately four years requires careful benchmarking against similar circuit card assembly contracts. Without competitive bidding, it is difficult to ascertain if the pricing reflects fair market value. The fixed-price nature provides some cost certainty, but the lack of competition could lead to suboptimal pricing for the government. Further analysis would involve comparing unit costs for similar components and assessing the contractor's historical pricing trends for comparable services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they limit the government's ability to leverage market competition to drive down prices and ensure the best value. The lack of competition here means taxpayers may not benefit from the most cost-effective solution.

Taxpayer Impact: The absence of competition means taxpayers are not benefiting from potential cost savings that could arise from a bidding process. This could result in a higher overall expenditure for these essential circuit card assemblies.

Public Impact

The Department of Defense is the primary beneficiary, securing essential components for its operations. Services delivered include the manufacturing of bare printed circuit boards, crucial for electronic systems. Geographic impact is concentrated in Arizona, where the manufacturing is expected to take place. Workforce implications may include job creation or retention within Raytheon's Arizona facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for over-reliance on a single supplier for critical components.
Absence of small business participation may limit broader economic impact.
Long-term contract duration could lock in potentially non-optimal pricing if market conditions change.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Award to a known entity (Raytheon Company) suggests a level of established capability.
Long-term award indicates a sustained and critical need for the product.
Specific NAICS code (334412) points to a specialized manufacturing capability.

Sector Analysis

The contract falls within the Bare Printed Circuit Board Manufacturing sector (NAICS 334412). This industry is critical for the defense industrial base, providing foundational components for a wide array of electronic systems. The market is characterized by specialized manufacturing processes, high precision requirements, and often, significant capital investment. Comparable spending benchmarks would involve analyzing other DoD or federal contracts for similar electronic component manufacturing, particularly those awarded to large defense contractors.

Small Business Impact

This contract does not appear to include a small business set-aside. The award to Raytheon Company, a large defense contractor, suggests that subcontracting opportunities for small businesses may be limited unless specifically mandated or pursued by the prime contractor. Further analysis would be needed to determine if Raytheon has a robust subcontracting plan that includes small businesses, which is crucial for fostering a diverse and competitive defense industrial ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy and the Department of Defense. Accountability measures are embedded within the contract terms, including delivery schedules and quality specifications. Transparency may be limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Defense Production Act Investments
Naval Sea Systems Command Contracts
Electronic Component Manufacturing
Sole-Source Defense Procurements
Raytheon Company Contracts

Risk Flags

Sole-source procurement
Lack of competition
Potential for price inflation
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.6 million to RAYTHEON COMPANY. CIRCUIT CARD ASSEMB

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 Navy).

What is the total obligated amount?

The obligated amount is $16.6 million.

What is the period of performance?

Start: 2025-12-23. End: 2028-09-18.

What is Raytheon Company's track record with the Department of Defense for similar circuit card assembly contracts?

Raytheon Company has a long-standing and extensive history of contracting with the Department of Defense across various defense systems and platforms. Their portfolio includes a wide range of electronic components, systems integration, and manufacturing services. For circuit card assembly specifically, Raytheon has been a significant supplier, often integrated into larger defense platforms like aircraft, ships, and missile systems. Their track record generally indicates a capacity to meet stringent military specifications and delivery requirements. However, the specific performance metrics, past issues, or cost overruns on previous, similar contracts would require a deeper dive into contract databases and performance reports to fully assess their suitability and pricing competitiveness for this particular award.

How does the awarded price compare to market rates for bare printed circuit board manufacturing?

Determining the precise market rate for bare printed circuit board (PCB) manufacturing is complex due to the vast array of specifications, materials, quantities, and complexities involved. This contract, valued at approximately $165.8 million over roughly four years, is for a sole-source award to Raytheon Company. Without competitive bids, a direct comparison to market rates is challenging. Typically, competitive procurements allow for price discovery, revealing a range of costs. For sole-source contracts, the government relies on historical pricing, cost realism analyses, and benchmarking against similar, albeit not identical, contracts. Given the specialized nature and potential defense-specific requirements, the unit costs could be higher than commercial-grade PCBs. A thorough value analysis would involve comparing the implied unit costs against industry benchmarks for high-reliability PCBs and assessing Raytheon's cost structure and profit margins.

What are the primary risks associated with a sole-source award for critical defense components?

The primary risks associated with a sole-source award for critical defense components like circuit card assemblies include: 1. **Price Inflation:** Without competition, the contractor may not be incentivized to offer the lowest possible price, potentially leading to higher costs for taxpayers. 2. **Reduced Innovation:** A lack of competitive pressure can stifle innovation and the adoption of more efficient manufacturing techniques. 3. **Supplier Lock-in:** The government becomes dependent on a single supplier, making it difficult and costly to switch providers if performance issues arise or if market conditions change. 4. **Limited Visibility:** The absence of multiple bids reduces transparency in the procurement process, making it harder to independently verify the fairness of the price and the contractor's capabilities. 5. **Potential for Complacency:** The sole provider might become complacent regarding quality or delivery schedules due to the lack of competitive alternatives.

What is the expected program effectiveness and performance context for this contract?

The expected program effectiveness hinges on Raytheon Company's ability to consistently deliver high-quality bare printed circuit boards that meet the stringent specifications required by the Department of the Navy. The contract's long duration (ending September 2028) suggests a sustained need for these components, likely integrated into ongoing or future defense systems. Performance context is crucial; the effectiveness will be measured by adherence to delivery schedules, defect rates, and compliance with technical requirements. Given the sole-source nature, the Navy will need robust quality assurance and oversight mechanisms to ensure Raytheon maintains high performance standards throughout the contract period. Success means ensuring the timely availability of reliable electronic components essential for national security.

How does this contract's value compare to historical federal spending on circuit card manufacturing?

Federal spending on circuit card manufacturing is substantial and distributed across various agencies, primarily the Department of Defense. The $165.8 million awarded to Raytheon represents a significant single contract award. To contextualize this historically, one would need to analyze aggregate federal spending data for NAICS code 334412 (Bare Printed Circuit Board Manufacturing) and related codes over several fiscal years. This would reveal trends in overall investment, identify major contractors, and highlight periods of increased or decreased spending. Comparing this specific award's value against the average contract size and total annual spending in this category would provide insight into whether this represents a typical, above-average, or below-average investment for a sole-source procurement of this nature.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Bare Printed Circuit Board Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0010424RQD88

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $16,576,580

Exercised Options: $16,576,580

Current Obligation: $16,576,580

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0010424GCL01

IDV Type: BOA

Timeline