The Transmitter Order That Outran the Budget

Continental Electronics Corp. of Dallas, an OSI Systems subsidiary, received an undefinitized contract action from the Air Force on April 8 with a not-to-exceed ceiling of $234,515,857 for the transmit subsystem of the Homeland Defense Over-the-Horizon Radar. Only $46.3 million was obligated at signing, drawn from fiscal 2025 research, development, test and evaluation funds. An undefinitized contract action is not a placeholder: the contractor begins production while the parties negotiate final terms, and once definitized the ceiling becomes the contract price. DFARS regulations require definitization within 180 days of award, putting the deadline at roughly October 2026, at which point the Air Force will need to obligate the remaining $188 million. Continental holds the sole-source award because the Air Force spent the preceding years routing the transmitter's design and risk-reduction work to this firm under prior RDT&E contracts. Design data for a megawatt-class radar transmitter does not migrate cleanly to a new vendor.

The appropriations structure is what made the April 8 timing possible. A Congressional Research Service analysis of the full funding policy draws the statutory line: items funded through the procurement title of the annual defense appropriations act must have their entire cost approved by Congress before a contract can be awarded. Programs funded through the RDT&E title fall outside that requirement and can be obligated incrementally. The OTHR program has sat in the Air Force's RDT&E account (program element 0102417F) throughout its development, and that classification has not changed as the program moved from risk-reduction work toward transmitter production. The FY2026 budget request included $202.7 million in RDT&E for the program, enough, if enacted, to cover the $188 million remaining on the UCA ceiling at definitization. By the time that happens, the Air Force will have committed the full production price of a major radar transmitter without that figure ever appearing in a procurement-title line item subject to the full funding requirement.

The program's public hardware milestones run later than the contract's delivery schedule implies. The Air Force selected Christmas Valley in Oregon's Lake County as the transmitter site and opened an environmental impact statement for the 2,622-acre complex, with that review running through September 2027 and construction targeted for late 2028. Continental's delivery date is March 31, 2031, against a site whose construction permits will not be resolved for another 18 months.

The transmitter array is half the radar system. Each OTHR installation requires a separate receiver array located several hundred miles away; no public receiver contract for the Oregon installation has been announced, making the $234.5 million transmitter order roughly half the hardware commitment per site. The two arrays close the detection loop: the transmitter bounces high-frequency signals off the ionosphere, the receiver catches the returns, and the system can track targets up to 4,000 nautical miles out, covering cruise missiles and bombers at altitudes too low for conventional line-of-sight radar to reach. NORAD commander Gen. Gregory Guillot has called OTHRs the "foundation for the Golden Dome construct." Congress authorized up to six systems in the fiscal 2024 National Defense Authorization Act.

The original acquisition plan placed both NORAD partners on the same hardware, the U.S. purchasing four systems and Canada two. That structure no longer holds. In March 2025, Canadian Prime Minister Mark Carney announced at Inuvik, Northwest Territories, that Canada would buy its Arctic Over-the-Horizon Radar from BAE Systems Australia, adapting the Jindalee Operational Radar Network technology Australia uses for its own air defense. Australian Prime Minister Albanese described the arrangement as reflecting the importance of diversifying trade relationships. A formal technology partnership between the two defence departments was signed June 20, 2025, with the program valued at roughly CAD 6 billion. When Australian Defence Minister Richard Marles said in April 2026 that he still hoped the United States would also purchase JORN, the remark placed the Canada deal in a specific context: an Australian official had told reporters that the U.S. was originally expected to be the first JORN export customer.

With the transmitter UCA placed and the receiver contract still pending, OTHR is accumulating hardware commitments through RDT&E accounts before a procurement-title line has ever existed for this program. The FY2027 budget request will show whether the Air Force moves OTHR into a procurement account, where the full funding requirement applies, or keeps it in RDT&E to preserve the incremental-obligation flexibility that made the April 8 contract possible.