DoD's $43.5M contract for satellite system development awarded to ITT Industries in 1997
Contract Overview
Contract Amount: $43,476,354 ($43.5M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 1997-07-30
End Date: 2002-12-31
Contract Duration: 1,980 days
Daily Burn Rate: $22.0K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 199712!5700!0048!GZ09 !SMC/PKW SAT SYSTEMS CONTRACTS !F0470197C0029 !A!*!* !19970730!20000630!001216845!001216845!001216845!N!28528!ITT INDUSTRIES, INC !4 W RED OAK LN FL 2 !WHITE PLAINS !NY!10604!53670!013!34!NUTLEY !ESSEX !NEW JERSEY!0001!+000001000000!N!N!000000000000!AR95!RDTE/SPACE - OTHER - ENG/MANUF DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !3CEA!DEF METEOR SAT PROG !3761!3!*!S!*!B!B!*!A !N!U!2!002!F!* !Z!W!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!
Place of Performance
Location: FORT WAYNE, ALLEN County, INDIANA, 46818
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $43.5 million to L3HARRIS TECHNOLOGIES, INC. for work described as: 199712!5700!0048!GZ09 !SMC/PKW SAT SYSTEMS CONTRACTS !F0470197C0029 !A!*!* !19970730!20000630!001216845!001216845!001216845!N!28528!ITT INDUSTRIES, INC !4 W RED OAK LN FL 2 !WHITE PLAINS !NY!10604!53670!013!34!NUTLEY !ESSEX … Key points: 1. Contract awarded for satellite system development, indicating a focus on advanced defense capabilities. 2. The contract utilized a Cost Plus Fixed Fee (CPFF) pricing structure, common for research and development. 3. Competition was full and open after exclusion of sources, suggesting a deliberate selection process. 4. The contract duration spanned over five years, from 1997 to 2002, allowing for extensive development. 5. The primary performance location was Indiana, highlighting regional economic impact. 6. The contract falls under the Research, Development, Test, and Evaluation (RDTE) budget activity.
Value Assessment
Rating: fair
The contract value of $43.5 million for satellite system development over five years appears reasonable for its time, given the complexity of aerospace and defense projects. However, without specific benchmarks for similar satellite system development contracts from the late 1990s, a precise value-for-money assessment is challenging. The CPFF structure means costs could fluctuate, but the fixed fee provides some predictability for the contractor's profit. Further analysis would require comparing the scope and deliverables to other contracts of that era.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This specific designation suggests that while the competition was intended to be broad, certain sources were excluded, possibly due to specific technical requirements, security clearances, or prior relationships. The number of bidders is not explicitly stated, but the 'exclusion of sources' implies a more controlled competition than a completely unrestricted process. This could potentially limit price discovery compared to a truly open bid.
Taxpayer Impact: The exclusion of certain sources, even within a full and open competition framework, may have limited the number of competitive bids received, potentially impacting the final price achieved for taxpayers.
Public Impact
The primary beneficiary is the Department of Defense, specifically programs related to missile and space systems. The contract supported the development of satellite systems, crucial for intelligence, surveillance, and reconnaissance. The geographic impact is centered in Indiana, where the contractor's performance location was based. The contract likely supported a workforce of engineers, technicians, and support staff involved in advanced technology development.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The 'exclusion of sources' in the competition type warrants further investigation to understand the rationale and potential impact on cost.
- The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently.
- The specific satellite systems developed are not detailed, making it difficult to assess their technological advancement and strategic value.
- The contract's duration of over five years might indicate a complex or lengthy development cycle, potentially subject to delays.
Positive Signals
- The contract was awarded under a 'Full and Open Competition' framework, indicating an effort to solicit bids from qualified contractors.
- The contract duration of over five years suggests a significant and potentially complex project, implying a substantial technological undertaking.
- The award to ITT Industries, a known defense contractor, suggests a level of established capability in the relevant field.
- The contract falls under RDTE, highlighting investment in future defense capabilities.
Sector Analysis
This contract falls within the Aerospace and Defense sector, specifically focusing on the development of satellite systems. This is a high-technology area characterized by significant R&D investment, long development cycles, and stringent performance requirements. The market is typically dominated by large, specialized contractors. Comparable spending benchmarks would involve looking at other satellite development contracts awarded by the DoD or NASA during the late 1990s, considering factors like system complexity, payload capabilities, and launch integration.
Small Business Impact
There is no indication that this contract was set aside for small businesses. The nature of satellite system development typically involves large, complex projects requiring significant resources and expertise, which are often beyond the capacity of small businesses. Subcontracting opportunities for small businesses may have existed, but this would depend on the prime contractor's strategy and the specific components or services required.
Oversight & Accountability
Oversight for this contract would have been provided by the Department of Defense, likely through the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with terms and conditions. Accountability measures would include performance reviews, milestone tracking, and financial audits inherent in the CPFF structure. Transparency would be limited by the classified nature of some defense projects, but contract awards and basic details are generally public.
Related Government Programs
- Missile and Space Systems
- Satellite Development Programs
- Research, Development, Test, and Evaluation (RDTE)
- Advanced Technology Development Contracts
Risk Flags
- Competition Type Justification
- Cost Overrun Potential (CPFF)
- Scope Definition Clarity
- Technological Obsolescence Risk
Tags
defense, department-of-defense, satellite-systems, rdte, itt-industries, cost-plus-fixed-fee, limited-competition, indiana, missile-and-space-systems, 1997, engineering-development, manufacturing-development
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $43.5 million to L3HARRIS TECHNOLOGIES, INC.. 199712!5700!0048!GZ09 !SMC/PKW SAT SYSTEMS CONTRACTS !F0470197C0029 !A!*!* !19970730!20000630!001216845!001216845!001216845!N!28528!ITT INDUSTRIES, INC !4 W RED OAK LN FL 2 !WHITE PLAINS !NY!10604!53670!013!34!NUTLEY !ESSEX !NEW JERSEY!0001!+000001000000!N!N!000000000000!AR95!RDTE/SPACE - OTHER - ENG/MANUF DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !3CEA!DEF METEOR SAT PROG !3761!3!*!S!*!B!B!*!A !N!U!2!0
Who is the contractor on this award?
The obligated recipient is L3HARRIS TECHNOLOGIES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $43.5 million.
What is the period of performance?
Start: 1997-07-30. End: 2002-12-31.
What was the specific nature of the 'satellite systems' developed under this contract?
The provided data indicates the contract was for 'SMC/PKW SAT SYSTEMS CONTRACTS' and falls under 'RDTE/SPACE - OTHER - ENG/MANUF DEVELOP' for 'MISSILE AND SPACE SYSTEMS' related to the 'DEF METEOR SAT PROG'. While the exact specifications are not detailed, this suggests the contract was for the engineering and manufacturing development of satellite systems, likely for defense-related applications such as intelligence, surveillance, reconnaissance, or communications, under the Missile Defense Agency's purview or a related program like the Defense Meteorological Satellite Program (DMSP), though 'METEOR' could also refer to other programs. The focus on 'ENG/MANUF DEVELOP' implies a significant portion of the work involved designing, building, and testing prototype or initial production satellite hardware and associated ground systems.
How does the Cost Plus Fixed Fee (CPFF) structure typically impact cost control in defense contracts?
The Cost Plus Fixed Fee (CPFF) contract structure is often used for research and development or complex projects where the scope is not fully defined at the outset. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the actual costs incurred. However, it also places the risk of cost overruns primarily on the government. Effective oversight and robust cost accounting standards are crucial to prevent excessive spending and ensure the government receives good value. The fixed fee provides a ceiling on the contractor's profit, but the total cost to the government can still escalate if actual costs are higher than anticipated.
What does 'Full and Open Competition After Exclusion of Sources' imply for this contract?
The term 'Full and Open Competition After Exclusion of Sources' is a specific procurement method that indicates a deviation from a completely unrestricted competition. It means that the agency initially intended to conduct a full and open competition but subsequently excluded certain potential sources. The reasons for exclusion are typically documented and must be justified, often relating to specific technical capabilities, security requirements, or the need for specialized expertise that only a limited number of contractors possess. While it aims for broad participation, the exclusion means the competition pool is smaller than it could have been, potentially impacting the number of bids received and the resulting price competition. This method requires careful justification to ensure it serves the government's best interests.
What was the historical spending context for satellite system development contracts around 1997?
In the late 1990s, federal spending on satellite systems, particularly for defense and intelligence purposes, was substantial. The Department of Defense was actively investing in advanced reconnaissance, communication, and navigation satellite constellations. Programs like the Defense Meteorological Satellite Program (DMSP) were ongoing, and new initiatives for next-generation systems were likely being planned or initiated. The total budget for space and missile systems R&D was in the billions of dollars annually. Contracts like this one, awarded to established defense contractors like ITT Industries, were typical for acquiring cutting-edge technology in a rapidly evolving field, reflecting the strategic importance placed on space-based assets.
What is the significance of the contract being awarded to ITT Industries in 1997?
ITT Industries was a major diversified technology and manufacturing company with significant defense and aerospace divisions during the late 1990s. Awarding a contract for satellite system development to ITT Industries in 1997 would signify that the Department of Defense considered them a capable and trusted provider for such complex and high-technology projects. ITT had a history of producing advanced electronics, communication systems, and other components relevant to space applications. This award suggests they possessed the necessary technical expertise, manufacturing capabilities, and potentially existing security clearances required for the 'DEF METEOR SAT PROG' or related satellite initiatives. Their selection would be based on a competitive evaluation of proposals against established criteria.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: ITT Corporation
Address: 1919 W COOK RD, FORT WAYNE, IN, 46818
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 1997-07-30
Current End Date: 2002-12-31
Potential End Date: 2002-12-31 00:00:00
Last Modified: 2022-07-27
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