DoD's $230M Liberty Phase II CLS contract awarded to L3Harris Technologies for aircraft parts

Contract Overview

Contract Amount: $229,561,360 ($229.6M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2009-12-02

End Date: 2010-12-14

Contract Duration: 377 days

Daily Burn Rate: $608.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LIBERTY PHASE II CLS

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $229.6 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: LIBERTY PHASE II CLS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of 377 days suggests a complex or lengthy service requirement. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Awarded by the Department of the Air Force, indicating a focus on aviation support. 5. The 'Other Aircraft Parts' NAICS code suggests a broad scope of potential components. 6. A high base contract value of over $229 million warrants scrutiny for value for money.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of 'Other Aircraft Parts'. Without competitive bids, it's difficult to ascertain if the fixed fee adequately reflects market rates or if L3Harris Technologies provided the best possible value. The Cost Plus Fixed Fee structure, while common for complex projects, carries inherent risks of cost escalation if not meticulously managed. Further analysis would require detailed cost breakdowns and comparisons to similar sole-source awards for specialized aircraft components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was absent, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, there was no direct incentive for L3Harris Technologies to offer the lowest possible price.

Public Impact

The Department of the Air Force benefits from the specialized aircraft parts and auxiliary equipment provided under this contract. This contract supports the operational readiness and maintenance of Air Force aircraft. The primary beneficiaries are the military personnel and units relying on functional aircraft for their missions. The contract's impact is primarily within the defense sector, ensuring the availability of critical components for aviation assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can lead to cost overruns if not managed tightly.
Lack of transparency in sole-source procurements makes value assessment difficult.

Positive Signals

Award to a known entity, L3Harris Technologies, suggests a potentially established relationship and understanding of requirements.
The contract is for essential aircraft parts, indicating a direct contribution to military operational capability.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for such components is highly specialized, often dominated by a few key players with the necessary certifications and expertise. The size of this contract, over $229 million, indicates a significant procurement for the Department of the Air Force, likely for a specific aircraft platform or a broad range of support needs. Comparable spending benchmarks would involve analyzing other large sole-source contracts for aircraft sustainment and parts within the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large prime contractor, L3Harris Technologies, there is a potential for subcontracting opportunities for small businesses. However, the extent to which small businesses will benefit depends on L3Harris's subcontracting plan and the specific nature of the parts required. Without a competitive bidding process that often includes small business participation goals, the direct impact on the small business ecosystem is less certain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. The Cost Plus Fixed Fee structure necessitates robust financial oversight to ensure the fixed fee remains appropriate and costs are controlled.

Related Government Programs

Aircraft Maintenance and Repair
Defense Logistics Agency Contracts
Air Force Sustainment Programs
Aerospace Component Manufacturing

Risk Flags

Sole-source award
Cost-reimbursable contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $229.6 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. LIBERTY PHASE II CLS

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $229.6 million.

What is the period of performance?

Start: 2009-12-02. End: 2010-12-14.

What is the specific justification for awarding this contract on a sole-source basis to L3Harris Technologies?

The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of meeting the government's requirements. This could be due to proprietary technology, unique capabilities, or a lack of competition. For this contract, the specific reason would likely be detailed in the Justification and Approval (J&A) document required for sole-source procurements above certain thresholds. Without access to this document, the precise rationale remains unknown, but it is a critical piece of information for understanding the necessity of bypassing full and open competition.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and potential for cost overruns?

The Cost Plus Fixed Fee (CPFF) contract type is designed to provide the contractor with reimbursement for allowable costs plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves significant uncertainty, such as research and development or complex services. While it allows for flexibility, it carries a higher risk of cost overruns for the government compared to fixed-price contracts. The contractor has less incentive to control costs beyond what is necessary to complete the work, as cost overruns are generally reimbursed. The fixed fee, however, provides a ceiling on the contractor's profit. Effective oversight and clear performance metrics are crucial to mitigate the risks associated with CPFF contracts.

What is the historical spending pattern for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Air Force?

Analyzing historical spending patterns for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Air Force would require access to comprehensive federal procurement databases. This specific NAICS code (336413) encompasses a wide range of components, making it difficult to provide a precise historical trend without further segmentation. However, generally, spending in this category tends to be substantial and consistent, driven by the large and aging Air Force fleet requiring ongoing maintenance, repair, and overhaul (MRO) services. Fluctuations in spending can be influenced by new aircraft procurements, modernization programs, and operational tempo. A detailed analysis would involve examining annual spending data for this NAICS code over several fiscal years to identify trends, major contract awards, and key contractors.

What are the potential implications of a $229 million contract for 'Other Aircraft Parts' on the defense industrial base?

A contract of this magnitude for 'Other Aircraft Parts' can have significant implications for the defense industrial base. It signals substantial demand for specific components, potentially bolstering the production capacity and financial stability of L3Harris Technologies and its supply chain. This can lead to job creation within the company and its subcontractors, particularly in specialized manufacturing roles. Furthermore, such a large award can influence market dynamics, potentially making it more challenging for smaller or newer companies to compete for similar contracts if the incumbent has secured a long-term, high-value agreement. It also underscores the ongoing need for sustainment and modernization within the Air Force's aviation assets.

How does the duration of 377 days for this contract inform its complexity or the nature of the services required?

A contract duration of 377 days, spanning just over a year, suggests that the requirement is not a short-term, one-off purchase but rather a sustained effort. For 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' this duration could indicate a need for ongoing supply chain management, production runs for a specific set of components, or a period of repair and overhaul services. It implies a level of complexity that requires consistent effort and resource allocation from the contractor. The length also suggests that the government has a continuing need for these parts or services, rather than an immediate, urgent demand that would be met by a shorter-term contract.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: 10001 JACK FINNEY BLVD FM, GREENVILLE, TX, 75402

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $229,561,360

Exercised Options: $229,561,360

Current Obligation: $229,561,360

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862006G4002

IDV Type: IDC

Timeline