Shay Assad, the Pentagon’s Director of Defense Pricing, speaks to the audience at the SMC’s 2017 Space Contracting Executive Forum at Los Angeles Air Force Base in El Segundo, Calif., Aug. 23, 2017. (U.S. Air Force photo by Sarah Corrice)
WASHINGTON — Pentagon contract broker Shay Assad, a figure beloved by watchdogs and hated by industry, is back negotiating deals with the Air Force, helping to hammer out a contract with Raytheon for AMRAAM air-to-air missiles, Air Force officials told Breaking Defense.
The AMRAAM negotiations mark the third program Assad has been tapped to assist, in addition to ongoing negotiations for B-52 upgrades and helping the Air Force close a deal with Boeing for the E-7 Wedgetail last month.
The decision to bring in Assad was driven in part by a list of diverse difficulties the service is dealing with as it tries to nail down a deal for the 38th lot of missiles, Air Force acquisition czar Andrew Hunter told Breaking Defense in an exclusive interview last month. Those challenges include “pretty significant” upgrades, as well as burgeoning international demand including Ukraine’s nascent requirement for AIM-120 AMRAAMs to arm its newly delivered F-16s.
“We have partners all over the world looking to increase their inventories, because they’re really looking hard at, ‘What is our go-to-war posture?’” he said. “Everyone is short of critical munitions and AMRAAM is really at the top of that list for a lot of nations.”
Hunter noted that while the Air Force received multi-year authority from Congress for AMRAAM — which provides a stable demand signal to Raytheon — it did not get economic order quantity funding that allows the contractor to make bulk purchases of material and components, further complicating a deal between RTX and the Air Force.
“There may actually be ways to find folks who would be willing to provide that funding, so we’re looking hard at all those questions,” he said.
The Air Force declined an interview on behalf of Assad. A Raytheon spokesperson referred questions about ongoing AMRAAM negotiations to the Air Force.
Described in 2016 by Politico as the “most hated man in the Pentagon,” Assad is infamous for his hard-nosed, unrelenting approach to contract negotiations.
His resume includes two decades at Raytheon — now the weapons making arm of aerospace and defense behemoth RTX — where he rose through the ranks to become the company’s senior vice president of contracts. In government, Assad was best known for his tenure as the Pentagon’s director of defense pricing — a position created for him by former Defense Secretary Ashton Carter — where he garnered the reputation for being able to squeeze the defense industry’s profit margins.
During the Trump Administration, Assad was removed from his job and transferred laterally to a position at the Defense Contract Management Agency due to travel costs accrued between his home in Massachusetts and Washington, reported Defense One in 2018. Assad is currently president of The Shay Consulting and Arcade Group, Inc.
Last month, Air Force Secretary Frank Kendall said Assad’s assistance had been instrumental to finalizing terms with Boeing on the E-7 Wedgetail rapid prototyping contract, which had stagnated due to pricing disagreements.
Kendall — who has known Assad for about 25 years and worked closely with him when Kendall was managing the Pentagon’s acquisition portfolio during the Obama administration — said he reached out to Assad because the Air Force needed “real talent” to help close the deal.
“He has saved the United States of America billions of dollars, and he’s probably one of the most knowledgeable contracting people and best negotiators that I’ve ever dealt with,” Kendall said in an interview with Breaking Defense.
“I say we have the Bill Belichick of contracting,” Hunter added, referencing the former New England Patriots head coach, one of the greatest coaches in NFL history.
Aside from the AMRAAM contract, Assad has held “deep dives” with Air Force contract officers as well as Boeing’s team to find efficiencies on the B-52 modernization contract, Brig. Gen. Erik Quigley, the Air Force’s program executive officer for bombers, said last week at the Air Force’s Lifecycle Industry Days conference.
“How we do pricing, how we do proposals, how we do contracting […] We’re just leveraging his experience and expertise on how to become more efficient on both sides,” he said.
Hunter underscored that Air Force’s contract officers are still holding the reins on negotiations, but added that Assad is advising contract officers on strategy so that they can nail down the best deal.
And he noted that Assad could be tagged in to assist on other programs if the need arises.
“There could be more in the future — will be more in the future,” Hunter said.
Michael Marrow in Dayton, OH., contributed to this report.
