Raytheon Company awarded $15.7M contract for IFATDS, supporting Ukraine's defense needs

Contract Overview

Contract Amount: $15,700,828 ($15.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-08-14

End Date: 2026-08-30

Contract Duration: 1,112 days

Daily Burn Rate: $14.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS IS A FMS REQUIREMENT FOR UKRAINE UNDER CASE NB-B-VCC, ARP EX23021 FOR IFATDS

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $15.7 million to RAYTHEON COMPANY for work described as: THIS IS A FMS REQUIREMENT FOR UKRAINE UNDER CASE NB-B-VCC, ARP EX23021 FOR IFATDS Key points: 1. Contract awarded to a single, established defense contractor, Raytheon Company. 2. The contract is for the Integrated Fire Control Network (IFATDS) system. 3. Funding is linked to U.S. foreign military sales (FMS) for Ukraine. 4. The contract type is Firm Fixed Price, indicating defined costs. 5. Performance period spans over three years, from August 2023 to August 2026. 6. The contract is not a small business set-aside, with no indication of subcontracting goals.

Value Assessment

Rating: good

The contract value of $15.7 million for IFATDS equipment appears reasonable given the specialized nature of defense systems and the current geopolitical context. Benchmarking against similar FMS procurements for advanced command and control systems would provide a more precise value assessment. The firm fixed-price structure offers cost certainty for the government, though it may not capture potential efficiencies if production costs decrease.

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 is often used for specialized defense systems where a single contractor possesses the unique technology, intellectual property, or manufacturing capability. While efficient for acquiring specific capabilities, it limits price competition and may result in higher costs compared to a competed procurement.

Taxpayer Impact: Sole-source awards reduce opportunities for competitive bidding, potentially leading to higher prices for taxpayers as there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiaries are the Ukrainian armed forces, receiving critical command and control technology. The contract delivers the Integrated Fire Control Network (IFATDS) system, enhancing battlefield awareness and coordination. Geographic impact is primarily in Ukraine, with potential implications for regional security. Workforce implications are likely within Raytheon Company's manufacturing and engineering divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing cost to taxpayers.
Lack of transparency in the sole-source justification process.
Dependence on a single contractor for critical defense technology.
Potential for cost overruns if not closely managed due to lack of competition.

Positive Signals

Supports a key U.S. ally (Ukraine) in a critical geopolitical situation.
Procurement of advanced defense technology (IFATDS) enhances operational capabilities.
Firm Fixed Price contract provides cost certainty.
Long-term performance period allows for sustained support and integration.

Sector Analysis

The defense electronics sector is characterized by high R&D investment, long product cycles, and significant government procurement. Companies like Raytheon are major players in providing sophisticated command, control, communications, computers, and intelligence (C4I) systems. This contract for IFATDS fits within the broader market for battlefield management and fire control systems, a segment driven by evolving threats and the need for networked warfare capabilities. Comparable spending often involves multi-year contracts for complex electronic warfare and communication systems.

Small Business Impact

This contract was not set aside for small businesses, nor is there any indication of mandatory subcontracting goals for small businesses. The nature of the specialized defense system likely requires capabilities only available from large, established prime contractors. This means the direct economic benefit to the small business ecosystem from this specific contract is likely minimal, though Raytheon may engage small businesses as part of its broader supply chain.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army, likely through the contracting officer and program management office. Given the FMS nature, oversight may also involve the Defense Security Cooperation Agency. Transparency is facilitated through contract award databases, but the sole-source nature limits public insight into the negotiation process. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales (FMS)
Command and Control Systems
Defense Electronics Manufacturing
Tactical Communication Systems
Ukraine Security Assistance

Risk Flags

Sole-source award
Foreign Military Sales (FMS)
Defense Article Procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.7 million to RAYTHEON COMPANY. THIS IS A FMS REQUIREMENT FOR UKRAINE UNDER CASE NB-B-VCC, ARP EX23021 FOR IFATDS

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 $15.7 million.

What is the period of performance?

Start: 2023-08-14. End: 2026-08-30.

What is the track record of Raytheon Company in delivering IFATDS systems to other allied nations or U.S. forces?

Raytheon Company, now part of RTX, has a long history of developing and producing advanced defense systems, including command and control platforms. The Integrated Fire Control Network (IFATDS) is a key component in modern artillery and mortar fire support. Raytheon has supplied IFATDS and similar systems to the U.S. Army and various international partners for years. Their track record generally indicates successful delivery of complex systems, though specific performance metrics for past IFATDS contracts, especially concerning timeliness and adherence to budget, would require deeper analysis of program execution reports and historical contract data. The company's extensive experience in this domain suggests a high likelihood of successful delivery for this specific contract.

How does the $15.7 million contract value compare to previous procurements of IFATDS or similar systems?

Benchmarking the $15.7 million contract value requires comparing it to similar procurements of IFATDS or comparable command and control systems, ideally on a per-unit or per-system basis. Given this is a sole-source award for a specific quantity and configuration, direct comparison to competed contracts can be challenging. However, historical data from the Federal Procurement Data System (FPDS) or other contract databases might reveal average prices paid for IFATDS units or related systems in the past. Without specific unit counts or detailed system configurations for this award, a precise per-unit cost comparison is difficult. Generally, specialized defense systems can range from hundreds of thousands to millions of dollars per unit, depending on complexity and features. The value appears within a plausible range for such advanced military technology, especially considering it's for foreign military sales which can sometimes include additional support or training costs.

What are the primary risks associated with this sole-source contract for IFATDS?

The primary risks associated with this sole-source contract are related to cost and competition. Firstly, the lack of competition means the government may not be achieving the lowest possible price, as Raytheon Company faces less pressure to be cost-competitive. Secondly, there's a risk of vendor lock-in, where reliance on a single supplier for critical technology can limit future flexibility and potentially lead to higher sustainment or upgrade costs. Thirdly, sole-source awards can sometimes indicate a lack of robust market research or an over-reliance on a specific contractor's capabilities, which could be a strategic risk if that contractor faces financial difficulties or production issues. Finally, the geopolitical context of supporting Ukraine adds an inherent layer of risk related to delivery timelines and potential disruptions.

What is the expected effectiveness of the IFATDS system in enhancing Ukraine's defense capabilities?

The Integrated Fire Control Network (IFATDS) system is designed to significantly enhance a military's ability to coordinate and employ indirect fire assets, such as artillery and mortars. It provides a common operating picture, automates fire missions, and improves target acquisition and engagement. For Ukraine, the IFATDS is expected to improve the speed, accuracy, and coordination of its artillery units, allowing for more effective responses to enemy actions and better integration of fire support with maneuver forces. This can lead to reduced collateral damage, increased lethality against enemy positions, and improved survivability for Ukrainian troops by enabling faster and more precise counter-battery fire. Its effectiveness is contingent on proper training, integration with existing Ukrainian systems, and the availability of compatible munitions.

How has U.S. spending on defense systems for Ukraine evolved, and where does this contract fit?

U.S. spending on defense systems for Ukraine has dramatically increased since the full-scale Russian invasion in February 2022, primarily through the Ukraine Security Assistance Initiative (USAI) and Presidential Drawdown Authority (PDA). This $15.7 million contract, funded via Foreign Military Sales (FMS), represents a specific, albeit smaller, component of this broader support. While USAI and PDA often involve direct transfers of existing U.S. stocks or new production funded through specific appropriations, FMS allows allies to purchase U.S. defense articles and services through government-to-government agreements. This contract fits into the category of providing advanced, networked capabilities to enhance Ukraine's long-term defense posture, moving beyond immediate battlefield needs to more strategic system procurements. It reflects a commitment to equipping Ukraine with sophisticated technology for sustained defense.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W91CRB23R5018

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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

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: $15,700,828

Exercised Options: $15,700,828

Current Obligation: $15,700,828

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $43,594

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline