DoD's $210M ATPIAL contract awarded to L3 Technologies, Inc. shows fair value with 6 bidders

Contract Overview

Contract Amount: $21,045,495 ($21.0M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-07-16

End Date: 2008-10-31

Contract Duration: 473 days

Daily Burn Rate: $44.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ATPIAL

Place of Performance

Location: LONDONDERRY, ROCKINGHAM County, NEW HAMPSHIRE, 03053

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $21.0 million to L3 TECHNOLOGIES, INC. for work described as: ATPIAL Key points: 1. The contract demonstrates a competitive landscape with six bidders, suggesting potential for price discovery. 2. Awarded under a firm-fixed-price contract type, it aims to control costs and manage financial risk. 3. The duration of 473 days indicates a medium-term project with defined deliverables. 4. The contract's value of approximately $210 million places it as a significant procurement within its category. 5. Performance context is crucial, as the value-for-money assessment depends heavily on the delivered capabilities of the ATPIAL system. 6. Sector positioning within 'Other Ordnance and Accessories Manufacturing' highlights its specialized defense application.

Value Assessment

Rating: good

The contract value of $210 million for ATPIAL systems appears reasonable given the competitive nature of the award, with six bidders participating. While specific per-unit cost data is not provided, the firm-fixed-price structure suggests an effort to establish a predictable cost baseline. Benchmarking against similar defense procurement for advanced targeting systems would provide a more precise value-for-money assessment, but the competitive bidding process generally supports fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The participation of six bidders suggests a healthy level of competition for this defense procurement. This broad competition is generally favorable for price discovery and ensures that the government receives offers from a diverse range of capable contractors.

Taxpayer Impact: The full and open competition for this contract is beneficial for taxpayers as it likely drove down prices through competitive pressure, ensuring that taxpayer funds are used more efficiently.

Public Impact

The primary beneficiaries are the U.S. Army personnel who will utilize the ATPIAL (Advanced Target Pointer/Illuminator/Aiming Laser) systems. The services delivered include the provision of advanced targeting and aiming devices essential for modern military operations. The geographic impact is primarily within military operational theaters where U.S. Army units are deployed. Workforce implications include potential employment opportunities within L3 Technologies and its supply chain, particularly in manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm-fixed-price contract does not adequately account for all potential production challenges.
Dependence on a single contractor, L3 Technologies, Inc., for the full duration of the contract could pose supply chain risks.
The effectiveness and reliability of the ATPIAL system in real-world combat scenarios require ongoing performance monitoring.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process and potential for competitive pricing.
Firm-fixed-price contract type helps to mitigate cost uncertainty for the government.
The contractor, L3 Technologies, Inc., is a known entity in the defense sector, suggesting established capabilities.

Sector Analysis

The defense sector, specifically the 'Other Ordnance and Accessories Manufacturing' sub-sector, is characterized by high technological requirements and significant government investment. Contracts like this for advanced targeting systems are crucial for maintaining military readiness and technological superiority. Comparable spending benchmarks would involve analyzing other procurements of similar advanced aiming and targeting devices for various military branches.

Small Business Impact

This contract does not appear to have a specific small business set-aside. However, as a large prime contractor, L3 Technologies, Inc. may engage small businesses for subcontracting opportunities. The extent of small business participation would depend on the company's subcontracting plan and the nature of the components and services required for the ATPIAL systems.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Combat Optical Gunsights
Individual Weapon Sights
Night Vision Devices
Targeting Pods
Weapon System Integration

Risk Flags

Potential for obsolescence due to rapid technological advancements in targeting systems.
Dependence on contractor's ability to meet stringent quality and performance specifications.
Supply chain vulnerabilities for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.0 million to L3 TECHNOLOGIES, INC.. ATPIAL

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $21.0 million.

What is the period of performance?

Start: 2007-07-16. End: 2008-10-31.

What is the specific technical capability of the ATPIAL system being procured under this contract?

The ATPIAL (Advanced Target Pointer/Illuminator/Aiming Laser) system is a sophisticated device designed to enhance the targeting and aiming capabilities of individual soldiers. It typically integrates multiple functions, including a visible laser pointer for target designation, an infrared (IR) laser pointer for use with night vision devices, and an IR illuminator for area illumination. These capabilities allow soldiers to accurately identify, designate, and engage targets in various lighting conditions, significantly improving situational awareness and combat effectiveness. The specific technical specifications and performance parameters would be detailed in the contract's Statement of Work (SOW).

How does the $210 million contract value compare to historical spending on similar targeting systems by the Department of Defense?

The $210 million contract value for the ATPIAL system represents a substantial investment. To provide a precise comparison, historical spending data on similar advanced targeting and aiming laser systems procured by the DoD would be needed. However, given the complexity and advanced technology involved in such systems, this figure is not unusual for large-scale procurements. Factors influencing historical spending include technological advancements, inflation, quantity ordered, and the number of competitive bids received. A detailed analysis would involve benchmarking against contracts for systems like AN/PEQ-15 (a predecessor/related system) or other advanced laser aiming modules.

What are the primary risks associated with the performance of this contract for L3 Technologies, Inc. and the Department of the Army?

For L3 Technologies, Inc., the primary risks include meeting stringent technical performance specifications, adhering to the firm-fixed-price budget, and managing production timelines. Failure to meet quality standards or delivery schedules could result in penalties or contract termination. For the Department of the Army, risks include potential performance deficiencies of the ATPIAL system in operational environments, supply chain disruptions affecting timely delivery, and the possibility that the system may become obsolete due to rapid technological advancements. Ensuring adequate testing and validation throughout the contract lifecycle is critical to mitigating these risks.

What is the expected impact of this contract on the overall readiness and effectiveness of Army ground forces?

This contract is expected to have a positive impact on the overall readiness and effectiveness of Army ground forces by equipping soldiers with advanced targeting and aiming capabilities. The ATPIAL system enhances a soldier's ability to accurately identify and engage targets, particularly in low-light or adverse conditions, thereby improving survivability and mission success rates. By providing a standardized and reliable targeting solution, it contributes to improved situational awareness and interoperability among units. Ultimately, the widespread fielding of these systems is intended to maintain the Army's technological edge and combat effectiveness.

Can we assess the value for money without knowing the specific unit price or performance metrics?

Assessing value for money without specific unit prices or detailed performance metrics is challenging but possible through indirect indicators. The fact that the contract was awarded under full and open competition with six bidders suggests a competitive environment that likely drove prices towards a reasonable market level. The firm-fixed-price contract type also indicates a commitment to cost control. However, a definitive value-for-money assessment requires comparing the total contract cost against the delivered capabilities and their effectiveness in meeting operational requirements. Benchmarking against similar systems' costs and performance, and evaluating the system's lifecycle cost and operational impact, would provide a more robust assessment.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Other Ordnance and Accessories Manufacturing

Product/Service Code: SPECIAL INDUSTRY MACHINERY

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W91CRB05R0018

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 9 AKIRA WAY, LONDONDERRY, NH, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $21,095,495

Exercised Options: $21,095,495

Current Obligation: $21,045,495

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB05D0028

IDV Type: IDC

Timeline