L3Harris Technologies awarded $61M for navigation systems, highlighting a sole-source procurement

Contract Overview

Contract Amount: $61,023,873 ($61.0M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2002-08-12

End Date: 2016-06-30

Contract Duration: 5,071 days

Daily Burn Rate: $12.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $61.0 million to L3HARRIS TECHNOLOGIES, INC. for work described as: Key points: 1. The contract value of $61 million for navigation systems suggests a significant investment in specialized defense capabilities. 2. The sole-source nature of this award warrants scrutiny regarding the justification for limited competition. 3. A long contract duration of over 13 years (from 2002 to 2016) indicates a sustained need for these systems. 4. The firm fixed-price contract type aims to provide cost certainty for the government. 5. The absence of small business set-asides or participation suggests this contract primarily involves large prime contractors. 6. The procurement falls under the manufacturing of search, detection, navigation, guidance, aeronautical, and nautical systems.

Value Assessment

Rating: fair

Benchmarking the value of this $61 million contract is challenging without specific details on the systems procured and their intended use. However, the long duration and sole-source nature suggest a potentially higher cost than if it had been competed. The firm fixed-price structure offers some cost control, but the lack of competitive pressure could lead to less favorable pricing for the government over the contract's lifespan. Further analysis would require comparing unit costs for similar navigation systems and assessing the necessity of the sole-source award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. The justification for this approach is not provided but typically involves unique capabilities, proprietary technology, or urgent needs where competition is not feasible. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed contract. It also raises questions about whether alternative solutions were adequately explored.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government did not benefit from the cost-saving pressures that typically arise from multiple offers.

Public Impact

The primary beneficiaries are likely Department of Defense units requiring advanced navigation and guidance systems for their operations. The services delivered involve the manufacturing and potentially sustainment of critical navigation hardware. The geographic impact is primarily within the United States, supporting defense manufacturing and potentially deployment worldwide. Workforce implications include skilled labor in engineering, manufacturing, and quality assurance within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Long contract duration without clear performance metrics could mask inefficiencies.
Lack of small business involvement may limit opportunities for smaller innovative firms.
Absence of detailed justification for sole-source procurement raises transparency concerns.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Sustained award indicates a critical and ongoing need for the procured systems.
Contract awarded to a known entity (L3Harris Technologies) suggests a level of established capability.

Sector Analysis

The contract falls within the aerospace and defense sector, specifically the manufacturing of navigation and guidance systems. This is a highly specialized and technologically intensive market, often characterized by long development cycles and significant R&D investment. The market size for such systems is substantial, driven by global defense spending. Comparable spending benchmarks would involve analyzing other large sole-source or competed contracts for similar defense electronics and avionics.

Small Business Impact

This contract does not appear to have involved small business set-asides, as indicated by the 'sb' field being false. The prime contractor, L3Harris Technologies, is a large defense firm. There is no information provided on subcontracting plans or actual performance related to small businesses. This suggests that the primary focus was on the capabilities of the large prime, potentially limiting opportunities for smaller, specialized firms within the defense supply chain for this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring compliance with contract terms and quality standards. Accountability measures are inherent in the firm fixed-price structure, which places cost risk on the contractor. Transparency is limited by the sole-source nature and the lack of publicly available detailed justifications. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Navigation Systems Procurement
Aerospace and Defense Manufacturing
Sole-Source Defense Contracts
L3Harris Technologies Contracts
Navigation, Guidance, and Control Systems

Risk Flags

Sole-source justification requires scrutiny.
Long contract duration may lead to technology obsolescence.
Lack of competition could result in higher costs.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.0 million to L3HARRIS TECHNOLOGIES, INC.. See the official description on USAspending.

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 $61.0 million.

What is the period of performance?

Start: 2002-08-12. End: 2016-06-30.

What specific navigation systems were procured under this $61 million contract, and what were their intended applications within the Department of Defense?

The provided data indicates the contract falls under NAICS code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' While the exact systems are not detailed, this suggests the procurement likely involved components or complete systems for aircraft, ships, or ground vehicles requiring precise positioning, orientation, and directional information. Applications could range from tactical navigation for combat platforms to strategic guidance systems for long-range assets. The long duration (2002-2016) implies these were likely core or legacy systems requiring sustained support or upgrades rather than experimental technology.

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

The data explicitly states the contract was 'NOT COMPETED' and awarded as a 'SOLE SOURCE'. Without further documentation, the precise justification remains unknown. Common reasons for sole-source awards in defense include the contractor possessing unique, proprietary technology essential for the mission; the system being a sole-source component of a larger platform; urgent and compelling circumstances where competition would cause unacceptable delays; or the contractor being the only source capable of meeting specific security or interoperability requirements. A thorough review would require accessing the official justification documentation (e.g., a Justification and Approval document).

How does the firm fixed-price (FFP) contract type mitigate risk for the government in a sole-source scenario?

A Firm Fixed Price (FFP) contract shifts the majority of cost risk to the contractor. This means the agreed-upon price is generally not subject to adjustment based on the contractor's cost experience. In a sole-source context, while the government may not achieve the lowest possible price due to lack of competition, the FFP structure provides budget certainty. It prevents cost overruns from impacting the government's bottom line, unlike cost-reimbursement contracts. However, the contractor may build in higher contingency amounts into the FFP price to account for unknown risks, potentially leading to a higher initial cost compared to a competed FFP contract.

What is the historical spending pattern for navigation systems by the Department of Defense, and how does this $61 million award compare?

The provided data only details this single $61 million contract awarded in 2002 and ending in 2016. To assess historical spending patterns, one would need to analyze broader DoD procurement data for navigation systems over multiple fiscal years and across different agencies. This $61 million represents a significant, but likely not the entirety, of DoD spending on such systems during that period. Without comparative data on other contracts (both sole-source and competed) for similar systems, it's difficult to definitively state if this award was high or low relative to the market or other government procurements.

What are the potential implications of a 13-year contract duration (2002-2016) for technology obsolescence and sustainment costs?

A contract spanning over a decade presents significant challenges regarding technology obsolescence. Navigation systems, like much of defense electronics, can become outdated relatively quickly due to rapid technological advancements. If this contract involved manufacturing new systems, the technology procured in 2002 might be less capable or supportable by 2016. If it focused on sustainment, the challenge lies in maintaining legacy systems with diminishing parts availability and potentially higher repair costs. The long duration necessitates careful planning for technology refresh cycles and robust sustainment strategies to ensure operational effectiveness throughout the system's lifecycle.

Given the sole-source nature, what oversight mechanisms were likely in place to ensure L3Harris Technologies delivered acceptable quality and performance?

Even in sole-source contracts, robust oversight is crucial. The Defense Contract Management Agency (DCMA) likely played a key role, performing quality assurance surveillance, ensuring compliance with technical specifications, and monitoring delivery schedules. For a firm fixed-price contract, oversight often focuses heavily on acceptance testing and verification of deliverables against contract requirements. Performance metrics, though potentially less rigorously negotiated than in a competed contract, would still be essential. The government would monitor contractor performance to ensure the systems met the defined operational needs, even without direct price competition.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 77 RIVER RD, CLIFTON, NJ, 07014

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline