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Raytheon’s Wes Kremer: Multiyear Contracts Offer Business Certainty for Defense Suppliers

Raytheon's Wes Kremer: Multiyear Contracts Offer Business Certainty for Defense Suppliers - top government contractors - best government contracting event

Wes Kremer, president of Raytheon, said fourth-tier defense suppliers could decide a course of action regarding their operations if the government commits to multiple years of procuring munition and other systems.

“What a multi-year contract does is it gives them surety,” Kremer told Breaking Defense in an interview posted Tuesday.

“And when they understand that they’re going to be building X number for five years, then they can make that business decision, ‘Hey, do I hire more people? Do I invest in more capital or automation?’ It allows them to have certainty around making those kinds of decisions.”

He noted that multiyear procurement transactions are complex due to threshold requirements, such as cost, and the need to authorize contract funds in advance for the manufacturer to begin obtaining long-lead materials from its supply base.

Kremer added he thinks the government should address the challenge of contracting in shorter timelines.

Raytheon is one of the three businesses operating under the new RTX.

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Written by Mary-Louise Hoffman

is a writer of news summaries about executive-level business activity in the government contracting sector. Her reports for ExecutiveBiz are focused on trends and events that drive the GovCon industry to include commercial technologies that private companies are developing for federal government use. She contributes news content to ExecutiveBiz’s sister sites GovCon Wire and ExecutiveGov.

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