DoD's $11.2M ATPIAL contract to L3 Technologies shows fair value with 3 bidders

Contract Overview

Contract Amount: $11,242,738 ($11.2M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-02-13

End Date: 2008-08-31

Contract Duration: 565 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ATPIAL LA-5/PEQ SEE CLIN 0004 OF THE CONTRACT

Place of Performance

Location: LONDONDERRY, ROCKINGHAM County, NEW HAMPSHIRE, 03053

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $11.2 million to L3 TECHNOLOGIES, INC. for work described as: ATPIAL LA-5/PEQ SEE CLIN 0004 OF THE CONTRACT Key points: 1. Contract awarded to L3 Technologies for ATPIAL systems. 2. Competition involved three bidders, suggesting a moderately competitive market. 3. The contract duration was 565 days. 4. Awarded under a firm fixed-price structure, indicating price certainty. 5. The North American Industry Classification System (NAICS) code is 334511 for Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. 6. The contract was awarded by the Department of the Navy. 7. The base value of the contract was $11,242,738. 8. The contract was not set aside for small businesses.

Value Assessment

Rating: good

The contract's value of $11.2 million for ATPIAL systems appears reasonable given the firm fixed-price structure and the competitive nature of the award. Benchmarking against similar advanced targeting systems would provide a more precise value assessment, but the presence of multiple bidders suggests that pricing was likely scrutinized. The contract's performance period of approximately 1.5 years also aligns with typical procurement cycles for such specialized equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bids received. The presence of multiple bidders indicates a healthy level of competition for this specialized defense equipment. This suggests that the government had a reasonable opportunity to solicit competitive pricing and that contractors were motivated to offer their best terms. The specific details of the bidding process, such as the evaluation criteria and the spread of the bids, would offer further insight into the effectiveness of the competition.

Taxpayer Impact: A full and open competition with multiple bidders generally leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who will utilize the ATPIAL (Advanced Target Pointer/Illuminator/Aiming Laser) systems for enhanced targeting and situational awareness. The services delivered include the manufacturing and supply of critical aiming and targeting equipment. The geographic impact is primarily within Department of Defense operations, with potential deployment to various naval units and bases. Workforce implications include employment within L3 Technologies and its supply chain, particularly in the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future procurements if competition diminishes.
Dependence on a single contractor for specialized components could pose supply chain risks.
Ensuring ongoing technological relevance of the ATPIAL system against evolving threats.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm fixed-price contract provides cost certainty for the government.
L3 Technologies is an established defense contractor with a track record in similar systems.

Sector Analysis

The defense electronics manufacturing sector is characterized by high technological sophistication and significant government investment. Companies like L3 Technologies operate within a market driven by defense spending, where innovation and reliability are paramount. The ATPIAL system falls under the broader category of electro-optical and infrared (EO/IR) systems, a critical component of modern military operations. Comparable spending in this sector often involves substantial sums for advanced targeting, surveillance, and reconnaissance equipment, with contracts frequently awarded through competitive bidding processes.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like L3 Technologies suggests that the primary focus was on the prime's capability to deliver the specialized system. Further analysis would be needed to determine if small businesses were involved in the supply chain or if there were opportunities for them to participate in future related contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Night Vision Systems
Targeting Pods
Advanced Electro-Optical Systems
Defense Electronics Manufacturing
Naval Aviation Support Equipment

Risk Flags

Potential for obsolescence of technology over the system's lifecycle.
Dependence on specific components that may have limited sources.
Ensuring interoperability with evolving military platforms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.2 million to L3 TECHNOLOGIES, INC.. ATPIAL LA-5/PEQ SEE CLIN 0004 OF THE CONTRACT

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 Navy).

What is the total obligated amount?

The obligated amount is $11.2 million.

What is the period of performance?

Start: 2007-02-13. End: 2008-08-31.

What is the historical spending trend for ATPIAL systems by the Department of Defense?

Analyzing historical spending on ATPIAL systems requires access to detailed procurement data over multiple fiscal years. While this specific contract represents an $11.2 million award in 2007-2008, understanding the broader trend would involve examining all awards for ATPIAL or similar aiming/targeting laser devices. Factors such as technological upgrades, changes in military doctrine, and the introduction of new platforms can influence spending patterns. A comprehensive review might reveal periods of increased investment driven by specific operational needs or technological advancements, contrasted with periods of stable or declining expenditure as systems mature or are replaced. Without access to a broader dataset, it is difficult to ascertain a definitive trend from this single contract award.

How does the per-unit cost of the ATPIAL system in this contract compare to market rates or similar government contracts?

Determining the per-unit cost requires knowing the quantity of ATPIAL systems procured under this $11.2 million contract. If, for example, 1,000 units were purchased, the per-unit cost would be approximately $11,242. This figure would then need to be benchmarked against industry pricing for comparable advanced aiming laser devices and against other government contracts for similar equipment. Factors such as system complexity, features (e.g., infrared, visible laser, rangefinding), and volume discounts significantly impact per-unit costs. A firm fixed-price contract suggests the price was negotiated, but without the quantity, a direct comparison is not feasible. However, the presence of three bidders implies some level of market price awareness during negotiation.

What are the key performance indicators (KPIs) used to evaluate the success of this ATPIAL contract?

Key performance indicators for a contract like this typically revolve around meeting technical specifications, delivery schedules, and quality standards. For the ATPIAL system, KPIs would likely include the accuracy and reliability of the laser targeting, the durability of the device under operational conditions (e.g., shock, temperature extremes), battery life, and ease of integration with existing weapon platforms. Delivery performance, measured by on-time delivery of all units, is also critical. Quality assurance metrics, such as the number of defects or failures during testing and acceptance, would be monitored. The firm fixed-price nature of the contract incentivizes the contractor to meet these KPIs to avoid cost overruns.

What is L3 Technologies' track record with similar defense contracts, particularly involving electro-optical systems?

L3 Technologies (now part of L3Harris Technologies) has a substantial track record in developing and manufacturing a wide range of defense electronics, including electro-optical and infrared (EO/IR) systems, targeting pods, and communication equipment. They have historically secured numerous contracts with the Department of Defense and other government agencies for similar sophisticated systems. Their experience often includes providing components or complete systems for aircraft, ground vehicles, and naval platforms. A review of their contract history would likely show numerous awards for products requiring high precision, reliability, and advanced technological capabilities, similar to the ATPIAL system. This extensive background suggests a strong capability to fulfill complex defense requirements.

Were there any significant risks identified during the solicitation or award phase of this contract, and how were they mitigated?

While the provided data doesn't detail specific risks identified during the solicitation and award, common risks for defense contracts of this nature include technical risks (e.g., system performance not meeting requirements), schedule risks (e.g., delays in production or delivery), and cost risks (though mitigated by the fixed-price structure). Potential risks could also involve supply chain disruptions for specialized components or the contractor's financial stability. Mitigation strategies typically involve thorough technical evaluations of proposals, clear contract terms and conditions, performance bonds, liquidated damages clauses for delays, and robust quality assurance surveillance plans. The competitive nature of the award itself serves as a risk mitigation tool by selecting a contractor deemed most capable and offering the best value.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

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: $11,242,738

Exercised Options: $11,242,738

Current Obligation: $11,242,738

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0016405D8510

IDV Type: IDC

Timeline