Federal Register / Vol. 62, No. 196 / Thursday, October 9, 1997 / Notices 52773

and regulatory requirement are

complied with.

Annual Reporting Burden:

Respondents: 400,

Total Annual responses: 37,400,

Total annual hours requested: 1,100.

OMB Number: OMB 0412–0551.

Form Number: N/A.

Title: U.S. Agency for International

Development Acquisition Regulations

(AIDAR) Clause 752.70.26 Reports.

Type of Submission: Revision of

currently approved collection.

Purpose: Section 635(b) of the Foreign

Assistance Act (FAA) authorizes USAID

to make contract with any cooperative,

international organization, or other body

or persons in or out of the United States

in furtherance of the purposes and

within the limitations of the FAA. To

determine how well contractors are

performing to meet the requirements of

the contract, USAID requires periodic

performance reports from contractors.

The performance report requirements

are contained in the USAID clause new

AIDAR reports (October 1996).

Annual Reporting Burden:

Respondents: 350,

Total Annual responses: 2,000,

Total annual hours requested: 8,000.

Dated: October 1, 1997.

Willette L. Smith,

Acting Chief, Information and Records

Division, Office of Administrative Services,

Bureau of Management.

[FR Doc. 97–26808 Filed 10–8–97; 8:45 am]

BILLING CODE 6116–01–M

DEPARTMENT OF JUSTICE

Antitrust Division

[Civil Action No. 1:97CV01515]

Public Comments and Response on

Proposed Final Judgment United

States v. Raytheon Company, et al.

Pursuant to the Antitrust Procedures

and Penalties Act, 15 U.S.C. 16(b)(h),

the United States of America hereby

publishes below the comments received

on the proposed Final Judgment in

United States v. Raytheon Company, et

al., Civil Action No. 1: 97CV01515, filed

in the United States District for the

District of Columbia, together with the

United States’ response to the

comments.

Copies of the comments and

responses are available for inspection in

Room 215 of the U.S. Department of

Justice, Antitrust Division, 325 7th

Street, N.W., Washington, D.C. 20530,

telephone: (202) 514–2481, and at the

office of the Clerk of the United States

District of Columbia, United States

Courthouse, Third Street and

Constitution Avenue, N.W.,

Washington, D.C. 20001. Copies of any

of these materials may be obtained upon

request and payment of a copying fee.

Constance K. Robinson,

Director of Operations Antitrust Division.

U.S. Department of Justice

Antitrust Division, 1401 H Street, City Center

Building, Washington, DC 20530.

September 26, 1997.

John Heston, Senior MMIC Designer,

David Heston, Technical Director Space

Programs,

Texas Instruments, Inc., 13510 North Central

Expressway, MS 209, Dallas, Texas

75265

Re: United States, et al. v. Raytheon

Company, et al.; Civil Action No.:

1:97CV01515 (District of Columbia, July

2, 1997)

Dear Messrs. John Heston and David

Heston: This letter responds to your letter of

August 4, 1997, commenting on the proposed

Final Judgment in the above-captioned civil

antitrust case challenging the acquisition by

Raytheon Company of Texas Instruments’

Defense Systems and Electronics Unit. The

Complaint alleges that the acquisition

violates Section 7 of the Clayton Act, as

amended, 15 U.S.C. Section 18, because it is

likely substantially to lessen competition in

the manufacture and sale of gallium arsenide

monolithic microwave integrated circuits

(MMICs) in the United States. Under the

proposed Final Judgment, the defendants are

required to divest Texas Instruments’ Defense

Systems and Electronics Unit MMICs

business located in Dallas, Texas.

In your letter, you expressed concern that

the proposed Final Judgment may degrade

national security, cause prices of MMICs to

increase substantially, eliminate efficiencies,

slow technological development of MMICs as

well as transmit and receive modules (TR

modules), which house the MMICs, and harm

synergies between the development of

MMICs and TR modules. Your letter

recommended approval of the proposed

acquisition, or in the alternative, that Texas

Instruments’ Defense Systems and

Electronics Unit TR module business be

divested along with the MMICs business.

With regards to the national security issue,

the U.S. Department of Justice and the

Department of Defense (DoD) found no

evidence that challenging this transaction

would compromise national security. After a

thorough investigation, the Antitrust Division

and DoD concluded that the proposed

transaction, if not blocked, might lead to

higher prices for MMICs. In addition, access

to these critical components of advanced

radar systems might be foreclosed to

Raytheon’s radar competitors, thereby,

increasing DoD’s costs for new radar

programs. These radars are an important part

of our nation’s defense.

The MMIC cost increases you project,

should the acquisition not occur, are not

supported by the evidence obtained in the

Department’s investigation. Indeed, the very

MMIC and TR module synergies you

hypothesize that would be obtained from the

acquisition will likely also be obtained by an

alternative purchaser. For example, if the

alternative purchaser is a commercial MMIC

and/or TR module supplier, the design and

capacity utilization efficiencies you discuss

should accrue to that purchaser as well.

Under these circumstances, the costs of

MMICs will not increase and, ultimately,

may decline. Moreover, there is little

incentive for the commercial alternative

purchaser to spurn military business, as you

claim, especially in view of the excess

capacity in the industry.

This same rational applies to the likelihood

of advancement of the MMIC and TR module

technology. As you point out, DoD programs

require state-of-the-art MMICs and TR

modules. First, technological advancements

should be enhanced by maintaining

competition in the industry not by

eliminating it. Second, ‘‘cost plus’’ contracts,

which are common in military procurement,

by themselves will not ensure low costs or

more technological development without

ample competition in the marketplace.

Without competition, there is little incentive

to keep costs down or innovate in MMICs or

TR modules. Third, Raytheon, by acquiring

the Texas Instruments’ TR module business,

likely will achieve efficiencies in the

research and development and production of

its TR modules and MMICs making the

achievement of ‘‘cross functional technology

breakthroughs’’ possible.

Finally, because our investigation found

that competition in the TR module industry

is robust and that the MMIC business could

easily be segregated for purposes of

divestiture, sale of the entire R/F Microwave

Unit, as you propose, is not required.

The Antitrust Division appreciates you

bringing your concerns to our attention and

hopes that this response will alleviate them.

While the Department understands your

positions, we believe that the proposed Final

Judgment will adequately address the

competitive concerns created by the

Raytheon’s acquisition of Texas Instruments’

Defense Systems and Electronics Unit.

Pursuant to the Antitrust Procedures and

Penalties Act, a copy of your letter and this

response will be published in the Federal

Register and filed with the Court.

Thank you for your interest in the

enforcement of the antitrust laws.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

To: J. Robert Kramer

From: John Heston, Senior MMIC designer

RTIS, David Heston, Technical Director

Space Programs RTIS

Claim: We claim that the July 2 order of the

Department of Justice (97 1515) to break up

the R/F Microwave business unit of Raytheon

TI Systems (i.e. divestiture of the ‘MMIC

Business’) will degrade the national security

in both the short term and long term. It is our

premise that the Department of Justice made

a premature decision due to time pressures,

political pressures, and lack of complete

information. This paper presents additional

information relevant to the Department of

Justice decision and asks for reconsideration.
52774 Federal Register / Vol. 62, No. 196 / Thursday, October 9, 1997 / Notices

Our perspective of the July 2 consent

decree: On January 6, 1997 Raytheon

proposed to purchase the Defense Systems

and Electronics Group of Texas Instruments

for ∼$3B. In clearing the anti-trust issues with

the proposed acquisition the technology used

to manufacture radar components (i.e. GaAs

MMIC circuits and microwave modules)

became an issue. Several months were spent

in an investigation of this technology and

both Raytheon and Texas Instruments

provided information on microwave power

amplifiers and modules to the Department of

Justice. With direction from the Office of the

Secretary of Defense the Department of

Justice issued a consent decree to allow the

acquisition of TI’s defense group provided

the ‘MMIC Business’ of Texas Instruments

RF/Microwave Department be divested. The

RF/Microwave Department employees ∼800

people and had annual sales of ∼$125M in

1996. The RF/Microwave department is

comprised of: GaAs operations (MMIC

fabrication), module manufacturing, MMIC

and module design groups, and program

management. The ‘MMIC business’ as

decreed by the Department of Justice

comprises ∼300 of these people (all of GaAs

operations, a portion of the MMIC design and

program management capabilities, and the

microwave GaAs research lab) and had

equivalent revenues of ∼$50M in 1996.

The goal of the Department of Justice

decision was to keep Northrop Grumman and

other military system suppliers competitive

in the microwave module business by

ensuring it a supply source of outstanding

GaAs MMICs. It was the underlying

assumption that this competition was

necessary to drive down the cost of militaryuse MMICs.

However, there are four facts that need to

be reviewed again before the consent decree

is issued. The conclusions previously

reached regarding the impact of this consent

decree need to be reconsidered.

Fact 1

The ‘MMIC Business’ spin-off company

will have to raise MMIC costs.

Reasons for FACT 1: The same fabrication

overhead will now be spread over a much

smaller revenue and people. Short term

MMIC costs will soar. Initial estimates

provided to the programs from the now ‘firewalled’ MMIC Business group indicate a 50%

to 100% price increase for MMIC devices.

This price increase is effective August 1,

1997. The price increase does not include

GNA or profit since they are still part of

RTIS.

Also, the synergy existing and being

developed between the module and MMIC

business will be broken. This synergy

includes sharing office space, test equipment,

printer/copiers, secretarial support, financial

support, prototype parts stock, design

seminars, and profit. As a result of

eliminating this synergy, the long term cost

of the ‘MMIC Business’ spin-off will remain

higher than they would have been regardless

of the Buyer.

Revised Conclusion 1A

Northrop Grumman and other military

system suppliers will not be able to compete

against Raytheon at the microwave module

level in cost since it will be purchasing

higher priced MMICs from the ‘MMIC

Business’ spin-off. Raytheon will still have

access to their own MMICs which will not

change in price. Raytheon will also be able

to lower module costs due to synergy

between the two module factories (i.e. its

own module factory and the one acquired

from Texas Instrument’s RF/Microwave

department.

Revised Conclusion 1B

Short term cost to F–22 and all other RTIS

microwave military (cost plus) programs will

increase.

Fact 2

The commercial market (not military

competition) dominates the volume and cost

of every GaAs fabrication plant and thus the

cost of military radar MMICs.

Reasons for FACT 2: The bulk of the fab

cost is fixed. Therefore, volume drives the

cost/die down and allows profits to grow.

Military programs have low volumes. Even a

military phased array such as F–22 only

requires an estimated 500 wafers/year of high

yielding power amplifier MMICs [estimate

based on 440 planes produced in a 10 year

period]. By contrast, cellular phones require

millions of units per year (∼7000 wafers/year

for every 1 million phones.) And the

potential commercial telecommunications

phased array market (Teledesic, Motorola,

Alcatel) is also much larger than the military

market. To place this in perspective, in 1996

Texas Instrument’s GaAs facility produced

only 414 wafers of high power X-band

MMICs for all of its microwave customers

(military and commercial). The only way to

achieve low cost military use MMICs without

allowing commercial volume to set the price

would be to operate a very tiny GaAs fab.

Revised Conclusion 2A

To provide a good supply of military

MMICs, the ‘MMIC Business’ spin-off must

be viably competitive in the commercial

market. The increased overhead rate of the

‘MMIC Business’ spin-off may cause it to lose

business to commercial competitors such as

MA/COM, Triquent, and RFMD. Unless they

are extremely successful in the commercial

market the long term cost/availability of the

military radar MMICs from this group is

questionable. The ‘MMIC Business’ spin-off

will also be focusing their resources on

commercial MMICs instead of military

MMICs since they know that their survival is

dependent upon success in that market.

Fact 3

Military component costs (i.e. radar MMICs

and modules) are driven by technology

immaturity.

Reasons for FACT 3: Military programs

require the latest MMIC technology (0.25um

gates, pHEMT material, highest power levels)

that has been developed. The program costs

are typically driven more by development of

this technology and solving unexpected

travails of the technology development than

by competitive pricing analysis. All the

process development costs involved in

solving technology development difficulties

are passed onto the government through cost

plus contracts.

The GaAs industry is still struggling to

solve the two key problems that held Silicon

growth down until the 1970’s: reliability and

FET pinchoff control. These two issues are

not as thorny for lower requirement

commercial MMICs.

Revised Conclusion 3

Military MMIC cost and availability will

likely be improved more by allowing

consolidation than by increasing

competition. The use of cost plus contracts

will prevent the consolidated companies

from arbitrarily raising prices on military

programs. Commercial competition will keep

the MMIC costs low. Teaming agreements

between military system suppliers (as is the

case on F22 where RTIS and Northrop

Grumman are teamed together) can be used

to provide a continuous source of microwave

components to competitors.

Fact 4

Divestiture of the ‘MMIC Business’ divides

a team that is acknowledged as a leader in

military microwave solutions and may

impair technical breakthroughs on future

military programs. Cost of future military

programs will be higher without these

breakthroughs.

Reasons for FACT 4

The RF/Microwave department at Texas

Instruments has very good synergy between

system requirements from government

agencies and the technology needed to

achieve these requirements. There is synergy

between module and MMIC designers,

between MMIC designers and the GaAs

facility, and between programs and the

research lab that has developed over the past

25 years. A number of cross functional

engineering teams are in place to promote

technology development and minimize reinvention. We have both worked on programs

where a Government agency had a

technology roadmap of desired system

capability and the year they anticipated this

capability becoming available. Through a

combination of Government research

programs and internal investments key

technical areas in the research lab and GaAs

facility were targeted for development to

achieve specific module performance levels.

Over a 3 to 4 year period, a number of

technical breakthroughs occurred at both

device (GaAs process and material) and

design (MMIC and module) levels. These

breakthroughs enabled system architectures

up to 5 years sooner than previously

anticipated. Hopefully this pull-up has

benefited the National Security and also

provided a lower cost solution. This type of

technical breakthrough will be much more

difficult with the ‘MMIC Business’

divestiture and a breakup of the cross

functional engineering groups developed

over many years within the RF/microwave

department.

A secondary result of the ‘MMIC Business’

divestiture is an increased turnover of

personnel. Since the decision, three MMIC

designers and six process personnel in the

‘MMIC Business’ have already given notice of
Federal Register / Vol. 62, No. 196 / Thursday, October 9, 1997 / Notices 52775

their intention to leave the company and

many others are openly talking of leaving due

to career uncertainty created by the Justice

Department decree. Morale is extremely low

and it possibly endangers the core team of

MMIC design/process expertise that is being

divested.

Revised Conclusion 4

The ‘MMIC Business’ divestiture will

increase the cost of future military

microwave components through increased

difficulty in achieving cross functional

technology breakthroughs.

Revised Conclusion 4B

The ‘MMIC Business’ spin-off could

potentially lose critical mass of its key

personnel due to morale problems associated

with the Justice Department decree.

Proposed Solution

Keep the R/F Microwave Business unit

intact. This will prevent an increase in MMIC

costs, keep the company viable for

commercial business, and allow the company

to continue development of advanced

technology.

Option 1: Keep the unit with Raytheon.

This will provide the greatest opportunity for

high performance, low cost military MMICs

and modules. Since RTIS is teamed with

Northrop Grumman on the F22 program they

will be provided necessary MMICs for their

module build as part of that agreement.

Option 2: Spin off the entire R/F

Microwave unit from RTIS. This will make

Northrop Grumman and other military

system suppliers more competitive. The

downside is a loss of possible maturity for

advanced MMIC processes that would have

occurred with the merger (i.e. combination of

Raytheon and TI engineers sharing

information.)

Regards

John Heston, (972) 995–6051, RTIS, 13510

North Central Expressway, MS 209, Dallas,

TX 75265

David Heston, (972) 995–6048, RTIS, 13510

North Central Expressway, MS 262, Dallas,

TX 75265

[FR Doc. 97–26828 Filed 10–8–97; 8:45 am]

BILLING CODE 4410–11–M

DEPARTMENT OF JUSTICE

Federal Bureau of Investigation

Criminal Justice Information Services

(CJIS) Advisory Policy Board

The Criminal Justice Information

Services (CJIS) Advisory Policy Board

will meet on December 10–11, 1997,

from 9 a.m. until 5 p.m., at the Sunburst

Resort Hotel, 4925 Scottsdale Road,

Scottsdale, Arizona, telephone 602–

945–7666, to formulate

recommendations to the Director,

Federal Bureau of Investigation (FBI) on

the security, policy, and operation of the

National Crime Information Center

(NCIC), NCIC 2000, the Integrated

Automated Fingerprint Identification

System (IAFIS), and the Uniform Crime

Reporting and National Incident Based

Reporting System programs.

The topics to be discussed will

include the progress of the NCIC 2000

and IAFIS projects, and other topics

related to the operation of the FBI’s

criminal justice information systems.

The meeting will be open to the

public on a first-come, first-seated basis.

Any member of the public may file a

written statement concerning the FBI

CJIS Division programs or related

matters with the Board. Anyone wishing

to address this session of the meeting

should notify the Designated Federal

Employee, at least 24 hours prior to the

start of the session. The notification may

be by mail, telegram, cable, facsimile, or

a hand-delivered note. It should contain

the requestor’s name, corporate

designation, consumer affiliation, or

Government designation, along with a

short statement describing the topic to

be addressed, and the time needed for

the presentation. A nonmember

requestor will ordinarily be allowed not

more than 15 minutes to present a topic,

unless specifically approved by the

Chairman of the Board.

Inquiries may be addressed to the

Designated Federal Employee, Mr.

Demery R. Bishop, Section Chief,

Programs Development Section, CJIS

Division, FBI, 1000 Custer Hollow Road,

Clarksburg, West Virginia 26306,

telephone 304–625–2740, facsimile

304–625–5090.

Dated: October 3, 1997.

Demery R. Bishop,

Section Chief, Programs Development

Section, Federal Bureau of Investigation,

Designated Federal Employee.

[FR Doc. 97–26812 Filed 10–8–97; 8:45 am]

BILLING CODE 4410–02–M

DEPARTMENT OF LABOR

Employment and Training

Administration

Proposed Collection; Comment

Request

ACTION: Notice.

SUMMARY: The Department of Labor, as

part of its continuing effort to reduce

paperwork and respondent burden,

conducts a preclearance consultation

program to provide the general public

and Federal agencies with an

opportunity to comment on proposed

and/or continuing collections of

information in accordance with the

Paperwork Reduction Act of 1995

(PRA95) [44 U.S.C. 3506(c)(2)(A)]. This

program helps to ensure that requested

data can be provided in the desired

format, reporting burden (time and

financial resources) is minimized,

collection instruments are clearly

understood, and the impact of collection

requirements on respondents can be

properly assessed. Currently, the

Employment and Training

Administration is soliciting comments

concerning the proposed new collection

of the Center for Employment and

Training (CET) 24-Month Follow-Up

Survey. A copy of the proposed

information collection request (ICR) can

be obtained by contacting the office

listed below in the addressee section of

this notice.

DATES: Written comments must be

submitted to the office listed in the

addressee section below on or before

December 8, 1997. The Department of

Labor is particularly interested in

comments which:

• evaluate whether the proposed

collection of information is necessary

for the proper performance of the

functions of the agency, including

whether the information will have

practical utility;

• evaluate the accuracy of the

agency’s estimate of the burden of the

proposed collection of information,

including the validity of the

methodology and assumptions used;

• enhance the quality, utility, and

clarity of the information to be

collected; and

• minimize the burden of the

collection of information on those who

are to respond, including through the

use of appropriate automated,

electronic, mechanical, or other

technological collection techniques or

other forms of information technology,

e.g., permitting electronic submissions

of responses.

ADDRESSES: Tom NaSell, Office of

Policy and Research; 200 Constitution

Ave., NW, Room N–5629; Washington

DC 20210; (202) 219–5782 (this is not a

toll free number).

SUPPLEMENTARY INFORMATION:

I. Background

The Center for Employment Training

(CET) model of employment and

training programs for out-of-school

youth has gained national attention as a

result of its strong employment impacts

relative to comparable programs.

Building on this success, the

Department of Labor (DOL) began

funding the CET Replication Project in

December 1992, providing a grant for

CET–San Jose, CA to assist other

programs in implementing CET-like

training. In 1994 DOL competitively