Raytheon backs off plan to sell AF IDIQ contracts

Concerned about damaging its relationship with the Air Force, Raytheon Co. has decided, at least for the present, to continue to service the contracts it acquired when it purchased Hughes Electronics, including the Desktop V and Air Force Workstations contracts. The company reportedly abandoned eff

Concerned about damaging its relationship with the Air Force, Raytheon Co. has decided, at least for the present, to continue to service the contracts it acquired when it purchased Hughes Electronics, including the Desktop V and Air Force Workstations contracts.

The company reportedly abandoned efforts to find a buyer to take over the contracts after several companies balked at the price, and the Air Force hinted that failure to perform on these contracts could affect Raytheon's bids on other Air Force business.

"Desktop V is an important part of our business, and we are looking for Raytheon to fulfill its commitment to the Air Force," said Col. Delbert Atkinson, vice commander of the Air Force Standard Systems Group (SSG), Montgomery, Ala., which manages the Desktop V and Air Force Workstations contracts. "We too are concerned that Raytheon wants to get out of that business, but Raytheon has indicated that it would remain focused on the customer by delivering current technology at attractive prices."

Atkinson said Raytheon also has stepped up to the substantial warranty, upgrade and maintenance liabilities of the Desktop V contract— liabilities potentially so large that other federal PC vendors said Raytheon would need to pay any company that acquired the contract. Atkinson said in a statement that Raytheon "would continue to retain warranties, upgrades and help-desk support" for PCs purchased by Air Force users.

"We expect Raytheon to continue to honor the intent of the contract," said Kenneth Heit-kamp, technical director at SSG. "We've expressed that expectation to Raytheon, and they have assured us that they intend to meet their contractual obligations. We expect that performance."

A Raytheon spokesman declined to comment on the status of the Raytheon (formerly Hughes) Data Products division, saying the Lexington, Mass.-based aerospace giant has a firm policy on "not commenting publicly on divestitures and acquisitions.''

Informed industry and Air Force sources confirmed that Raytheon decided within the past week to hold on to the Data Products division for reasons that had little to do with the bottom line of the division itself. Raytheon reportedly realized its efforts to divest itself of the contracts could harm relationships with Air Force commands responsible for the acquisition of "big-ticket" electronic systems.

SSG and its parent command, the Electronic Systems Center, are units of the Air Force Materiel Command at Wright-Patterson Air Force Base, which is the service's overall acquisition agency for items ranging from PCs to bat-winged bombers. Raytheon executives, FCW has learned, were made aware that the firm's lack of enthusiasm for the computer pacts could possibly jeopardize relationships throughout this command.

"Clearly the move to including substantial weight on past performance is well-established," said Bob Dornan, senior vice president of Federal Sources Inc. "It would be a no-brainer to hold it against a vendor for not fulfilling their contractual obligation."

However, agencies are expected to look at past performance in "relevant" contract actions, including the size, scope and complexity of a project, Dornan said. Raytheon's performance on a PC contract should not hurt its opportunities to win work in electronic systems and similar projects, he said.

Chip Mather, senior vice president of Acquisition Solutions Inc., Chantilly, Va., agreed that relevance is expected to be factored in, but "past performance has become such a big stick, it is being used in some cases inappropriately," he said.

Now that Raytheon has decided to keep the Data Products unit, SSG officials plan to push the company to actively market the Desktop V contract— a key revenue source for SSG, which is funded by industrial fees levied on contract purchases.

Raytheon may have a hard time initially meeting SSG's expectations, industry sources said, as morale at the Data Products division has dropped over the past two months, with key personnel pushed out the door or ready to leave.

"We fully expect Raytheon to fulfill their assurances to us, but in the event they don't, we have alternatives from an acquisition perspective as well," said Heitcamp. These alternatives would include using other contracts, establishing blanket purchase agreements based on the General Services Administration schedule or putting new contracts in place, he said.

Mather, who helped manage Desktop IV at SSG, believes Desktop V has been hurt by having only one prime contractor since the Air Force decided not to renew the contract of Zenith Data Systems Inc.

On Desktop IV, the two prime contractors— ZDS and Government Technology Services Inc.— competed with price discounts and technology refreshes, Mather said. "Competition is what kept both contractors successful," he said.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.