FAA awards $327.8M to L3Harris for Voice Switching Systems, contract extended to 2032

Contract Overview

Contract Amount: $327,818,620 ($327.8M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Transportation

Start Date: 2007-02-24

End Date: 2032-09-30

Contract Duration: 9,350 days

Daily Burn Rate: $35.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: VOICE SWITCHING AND CONTROL SYSTEMS (VSCS)

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32904

State: Florida Government Spending

Plain-Language Summary

Department of Transportation obligated $327.8 million to L3HARRIS TECHNOLOGIES, INC. for work described as: VOICE SWITCHING AND CONTROL SYSTEMS (VSCS) Key points: 1. Contract value represents significant investment in critical aviation communication infrastructure. 2. Sole-source award raises questions about potential for higher costs and limited innovation. 3. Long contract duration suggests a need for sustained support but also potential for price creep. 4. Focus on radio and wireless communications equipment manufacturing aligns with FAA's operational needs. 5. Geographic concentration in Florida may indicate specific operational requirements or contractor presence. 6. Fixed-price contract type aims to control costs, but flexibility for changes may be limited.

Value Assessment

Rating: fair

The total contract value of $327.8 million over its extended period is substantial. Benchmarking this against similar systems is challenging without more specific technical details. However, given the sole-source nature, it's difficult to definitively assess if the pricing represents optimal value for money. The fixed-price structure provides some cost certainty, but the long duration could allow for price increases if not managed carefully.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3Harris Technologies, Inc. was the only bidder considered. This approach is typically used when only one source can fulfill the requirement, often due to unique capabilities, proprietary technology, or urgent needs. The lack of competition means there was no direct price comparison or incentive for multiple vendors to offer their best pricing.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to compete for this significant federal spending.

Public Impact

The Federal Aviation Administration (FAA) benefits through the continued operation and modernization of its Voice Switching and Control Systems (VSCS). These systems are critical for air traffic control communications, ensuring safe and efficient air travel. The contract supports the maintenance and potential upgrades of essential communication infrastructure across the national airspace. The workforce implications are primarily within L3Harris Technologies, Inc., supporting specialized engineering and manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential for taxpayer savings.
Long contract duration (until 2032) increases risk of cost escalation over time.
Lack of transparency in the sole-source justification could hide underlying issues.
Potential for vendor lock-in due to specialized nature of communication systems.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Long-term award ensures continuity of critical aviation communication services.
L3Harris is an established defense and aerospace contractor with relevant expertise.

Sector Analysis

The Voice Switching and Control Systems (VSCS) fall within the broader telecommunications and aerospace manufacturing sectors. This contract supports critical infrastructure for the aviation industry, a significant segment of the transportation sector. Spending on such specialized communication equipment is essential for national security and economic activity, ensuring the reliability of air traffic management. Comparable spending benchmarks are difficult to establish due to the unique nature of air traffic control systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) is also false. This suggests that small businesses are unlikely to be directly involved as subcontractors on this specific award, potentially limiting opportunities for them within this particular federal spending vehicle.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration's contracting and program management offices. The Department of Transportation's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potential public disclosure.

Related Government Programs

Air Traffic Control Systems Modernization
Aviation Communication Infrastructure
NextGen Air Transportation System
Federal Communications Commission (FCC) Spectrum Management

Risk Flags

Sole-source award
Long contract duration
Potential for technological obsolescence
Lack of small business subcontracting

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $327.8 million to L3HARRIS TECHNOLOGIES, INC.. VOICE SWITCHING AND CONTROL SYSTEMS (VSCS)

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $327.8 million.

What is the period of performance?

Start: 2007-02-24. End: 2032-09-30.

What is the specific technical capability L3Harris possesses that justifies a sole-source award for the Voice Switching and Control Systems (VSCS)?

The justification for a sole-source award typically stems from unique technical capabilities, proprietary technology, or specific integration requirements that only one contractor can meet. For the FAA's VSCS, this could involve highly specialized radio frequency integration, advanced digital signal processing tailored to air traffic control protocols, or existing infrastructure compatibility that is difficult and costly to replicate. Without the specific sole-source justification document, it's impossible to detail the exact technical reasons. However, such systems are often deeply integrated with existing air traffic management infrastructure, making a transition to a new vendor complex and potentially disruptive.

How does the extended contract duration to 2032 impact the potential for cost escalation and technological obsolescence?

A contract duration extending to September 2032, over a decade from its initial award, presents dual risks. Firstly, cost escalation is a significant concern. While the contract is firm fixed price, provisions for adjustments, inflation, or change orders can lead to increased costs over time. Without robust price monitoring and negotiation, the government may end up paying more than initially anticipated. Secondly, technological obsolescence is a risk. The pace of technological advancement, particularly in communications and software, is rapid. A system designed and implemented early in the contract period might become outdated before its expiration, potentially requiring costly upgrades or replacements, which may not be adequately covered by the original fixed-price agreement.

What are the performance metrics and key performance indicators (KPIs) used to evaluate L3Harris's delivery of VSCS services?

Performance metrics and KPIs for critical systems like the VSCS are crucial for ensuring operational effectiveness and accountability. While specific KPIs are not detailed in the provided data, they would typically include metrics related to system uptime and availability (e.g., 99.999% availability), response times for switching and control commands, signal clarity and fidelity, mean time between failures (MTBF), and mean time to repair (MTTR). The FAA would likely have established service level agreements (SLAs) with L3Harris, outlining these KPIs and the consequences of failing to meet them, such as service credits or penalties. Regular performance reviews would assess adherence to these metrics.

What is the historical spending trend for Voice Switching and Control Systems (VSCS) by the FAA, and how does this award compare?

The provided data shows a total award value of $327,818,619.50 for this specific contract, with an initial award date of February 24, 2007, and an extended completion date of September 30, 2032. This suggests a long-term, ongoing investment in VSCS. To understand historical trends, one would need to examine prior contracts for VSCS or similar systems awarded by the FAA. This current award, spanning over 25 years in total duration, represents a significant, sustained financial commitment. Without data on previous VSCS contract values and durations, it's difficult to definitively state if this award is higher or lower than historical norms, but its longevity indicates a consistent need and investment.

What are the potential risks associated with the geographic concentration of this contract in Florida?

The contract indicates the contractor's location (st) as 'FL' and state name (sn) as 'FLORIDA'. While this primarily reflects the contractor's base of operations, potential risks associated with geographic concentration can arise if the system's deployment or critical support functions are heavily reliant on this single location. Risks could include vulnerability to regional natural disasters (hurricanes), localized economic downturns affecting the contractor's workforce, or logistical challenges if the system requires widespread physical presence across the US. However, for a manufacturing and technology-focused contract, the primary risk might be less about physical deployment and more about the concentration of critical expertise and production facilities in one area.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 2400 PALM BAY RD NE, PALM BAY, FL, 32905

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,052,050,788

Exercised Options: $331,227,620

Current Obligation: $327,818,620

Actual Outlays: $125,004,776

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DTFAWA07C00014

IDV Type: IDC

Timeline