L3Harris Technologies awarded $10.5M for generic equipment, raising questions about value and competition

Contract Overview

Contract Amount: $10,542,301 ($10.5M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-03-02

End Date: 2010-09-10

Contract Duration: 1,288 days

Daily Burn Rate: $8.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GENERIC EQUIPMENT PURCHASE FOR FORT KNOX

Place of Performance

Location: LYNCHBURG, LYNCHBURG (CITY) County, VIRGINIA, 24501

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $10.5 million to L3HARRIS TECHNOLOGIES, INC. for work described as: GENERIC EQUIPMENT PURCHASE FOR FORT KNOX Key points: 1. The contract's value appears high for generic equipment, necessitating a benchmark against similar procurements. 2. Limited information on the specific equipment procured makes it difficult to assess its necessity and utility. 3. The duration of the contract (over 3 years) suggests a need for sustained supply, but the 'generic' nature is a concern. 4. The award was made under full and open competition, indicating a broad market search. 5. The firm-fixed-price contract type shifts risk to the contractor, which is generally positive for the government. 6. The absence of small business set-aside flags suggests this was not specifically targeted for smaller enterprises.

Value Assessment

Rating: fair

Benchmarking the value of this $10.5 million contract is challenging without specific details on the 'generic equipment' procured. However, the significant dollar amount for what is described as generic equipment warrants scrutiny. Comparing this to other similar procurements for communication equipment or general supplies by the Department of Defense could reveal if the price is competitive. The firm-fixed-price nature is a positive, but the lack of specificity in the equipment description makes a definitive value assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. With 3 bidders identified, this indicates a reasonable level of competition for this procurement. The open competition process is designed to foster price discovery and ensure the government receives competitive offers. However, the number of bidders (3) is on the lower end for a full and open competition, which could suggest potential limitations in the market for this specific type of equipment or a lack of aggressive bidding.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces. While 3 bidders is a moderate level of competition, it is still preferable to a sole-source award, as it provides some assurance that the government is not overpaying due to a lack of alternatives.

Public Impact

The primary beneficiaries are likely the Department of the Army and potentially personnel at Fort Knox, who will receive the procured equipment. The services delivered involve the provision of unspecified 'generic equipment', crucial for operational readiness or support functions. The geographic impact is centered around Fort Knox, Kentucky, where the equipment is intended for use. Workforce implications are indirect, potentially supporting manufacturing or logistics jobs within the supply chain of the awarded contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specificity regarding the 'generic equipment' procured makes it difficult to assess its true necessity and value for money.
The contract duration of over three years for generic items could indicate potential overstocking or a lack of agile procurement practices.
With only three bidders in a full and open competition, there's a possibility that the market for this equipment is limited or that competition was not as robust as desired.

Positive Signals

The contract was awarded under full and open competition, indicating a broad search for qualified vendors.
The firm-fixed-price contract type effectively transfers cost overrun risk from the government to the contractor.
The award to L3Harris Technologies, a known defense contractor, suggests a level of established capability and reliability.

Sector Analysis

This contract falls within the broader 'Other Communications Equipment Manufacturing' sector, which is a subset of the larger manufacturing industry. The market for defense-related equipment is substantial, with significant government spending allocated annually. This specific procurement, while described as 'generic,' likely supports communication infrastructure or operational needs within the Army. Comparable spending benchmarks would typically involve analyzing other contracts for similar equipment categories, such as radios, antennas, or general electronic components, to gauge pricing trends and market competitiveness.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). The absence of small business participation flags suggests that the primary award was made to a large business, L3Harris Technologies. There is no explicit information on subcontracting plans for small businesses. This means that opportunities for small businesses to participate in fulfilling this contract may be limited, potentially impacting the small business ecosystem unless the prime contractor proactively engages them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods within the agreed price. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or award process.

Related Government Programs

Department of Defense General Equipment Procurement
Army Communications Equipment Contracts
Fort Knox Supply Chain Management
L3Harris Technologies Federal Contracts

Risk Flags

Lack of Specificity in Equipment Description
Potential for Overpricing Generic Items
Moderate Competition Level for Full and Open Bid

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.5 million to L3HARRIS TECHNOLOGIES, INC.. GENERIC EQUIPMENT PURCHASE FOR FORT KNOX

Who is the contractor on this award?

The obligated recipient is L3HARRIS 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 $10.5 million.

What is the period of performance?

Start: 2007-03-02. End: 2010-09-10.

What specific type of 'generic equipment' was procured under this contract, and what is its intended use at Fort Knox?

The provided data classifies the procurement under NAICS code 334290 ('Other Communications Equipment Manufacturing') but does not specify the exact 'generic equipment.' This lack of detail is a significant limitation in assessing the contract's value and necessity. Typically, 'generic equipment' could refer to a wide range of items, from basic electronic components to standardized communication devices. Without knowing the specific items, it's impossible to determine their precise function, whether they are off-the-shelf or custom-modified, or if they represent a critical need for Fort Knox operations. Further investigation into the contract's statement of work or detailed specifications would be required to ascertain the exact nature and purpose of the procured goods.

How does the $10.5 million award compare to similar procurements for communication equipment by the Department of the Army?

Comparing this $10.5 million award requires identifying contracts with similar NAICS codes (334290) or descriptions related to communication equipment procured by the Department of the Army around the 2007-2010 timeframe. Without access to a comprehensive database of historical contract pricing for specific equipment types, a direct benchmark is difficult. However, if 'generic equipment' implies standard, non-specialized items, then $10.5 million over approximately three years (contract duration 1288 days) suggests a substantial quantity or a higher-than-expected unit cost. A thorough analysis would involve searching for contracts for items like radios, antennas, power supplies, or basic network hardware awarded during that period to establish a price-per-unit or total value range for comparable procurements.

What is L3Harris Technologies' track record with the Department of Defense, particularly for similar equipment procurements?

L3Harris Technologies (and its predecessor companies) has a long history of contracting with the Department of Defense, supplying a wide array of communication, electronic, and aerospace systems. Their track record generally indicates significant experience and capability in delivering complex defense technologies. For procurements related to communication equipment, L3Harris is a major player. However, the 'generic' nature of this specific contract makes it hard to directly link to their more specialized or advanced product lines. A review of their past performance on similar, less specialized contracts, including any past performance evaluations or awards databases, would provide a clearer picture of their reliability and pricing consistency in this particular segment.

Given the firm-fixed-price contract type, what are the potential risks or benefits for the government in this specific scenario?

The firm-fixed-price (FFP) contract type is generally advantageous for the government as it places the primary responsibility for cost control on the contractor, L3Harris Technologies. This means the government knows the total cost upfront and is protected from cost overruns, assuming the contractor meets all contract requirements. The main benefit is budget certainty. However, potential risks for the government under an FFP contract can include the contractor potentially cutting corners on quality to maintain profit margins if not adequately monitored, or the initial price being inflated to account for the contractor's perceived risk. In this case, since the equipment is described as 'generic,' the risk of quality issues might be lower, but the risk of an inflated price due to lack of detailed specification remains a concern.

How does the competition level (3 bidders) impact the potential value for money received by the government?

A competition level of three bidders in a 'full and open' scenario suggests a moderate degree of market interest. While more than a sole-source or limited competition, it is less than ideal compared to a scenario with five or more bidders, which typically drives more aggressive pricing. With three bidders, the government likely received competitive offers, but there's a possibility that the price could have been lower if more companies had participated. The impact on value for money is that while the government likely avoided the premium associated with sole-source contracts, it may not have achieved the absolute lowest possible price. The specific nature of the 'generic equipment' could also influence the number of bidders; if the market is genuinely limited to only a few capable suppliers, then three bidders might represent robust competition within that niche.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 221 JEFFERSON RIDGE PKWY, LYNCHBURG, VA, 05

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $110,542,301

Exercised Options: $10,542,301

Current Obligation: $10,542,301

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAB0701DH805

IDV Type: IDC

Timeline