Air Force's $26.6M engineering services contract awarded to L3Harris Technologies, Inc. without competition
Contract Overview
Contract Amount: $26,558,344 ($26.6M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2010-03-03
End Date: 2015-07-31
Contract Duration: 1,976 days
Daily Burn Rate: $13.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Official Description: ENGINEERING SERVICES
Place of Performance
Location: FORT WAYNE, ALLEN County, INDIANA, 46818
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $26.6 million to L3HARRIS TECHNOLOGIES, INC. for work described as: ENGINEERING SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Fixed Price Incentive contract type suggests shared risk between government and contractor, but details of incentives are not provided. 3. Long contract duration of 1976 days (over 5 years) indicates a significant, ongoing need for engineering services. 4. The contract was awarded in 2010, with performance concluding in 2015, suggesting historical data analysis. 5. The North American Industry Classification System (NAICS) code 541330 points to a focus on engineering services. 6. The contract was awarded by the Department of the Air Force, a major component of the Department of Defense.
Value Assessment
Rating: questionable
Without a competitive bidding process, it is difficult to benchmark the value for money. The fixed-price incentive structure aims to control costs, but the absence of competition means there's no market validation of the pricing. Comparing this to similar sole-source engineering services contracts would be necessary for a more precise assessment, but initial indications suggest potential for overpayment due to lack of competitive pressure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, L3Harris Technologies, Inc., was considered. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple qualified vendors. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.
Taxpayer Impact: Taxpayers may have paid a premium for these engineering services due to the absence of competitive bidding. Without multiple offers, the government could not be assured of receiving the most cost-effective solution available in the market.
Public Impact
The primary beneficiaries are the Department of the Air Force, which received essential engineering services. The services delivered likely supported various Air Force programs and infrastructure projects requiring specialized engineering expertise. The geographic impact is not specified but likely centered around Air Force bases or facilities where the engineering work was performed. Workforce implications would include employment for engineers and technical staff at L3Harris Technologies, Inc.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and potentially increases costs for taxpayers.
- Lack of transparency in the justification for sole-source award.
- Fixed-price incentive contract type can lead to cost overruns if not managed carefully.
- Contract awarded over a decade ago, making current value assessment challenging without updated benchmarks.
Positive Signals
- L3Harris Technologies, Inc. is a known defense contractor with established capabilities.
- The fixed-price incentive structure, if well-defined, can align contractor and government interests.
- The contract fulfilled a specific engineering need for the Air Force.
Sector Analysis
This contract falls within the broader engineering services sector, which is critical for government and private sector infrastructure development and maintenance. The market for engineering services is competitive, but specific niche expertise or existing relationships can sometimes lead to sole-source awards. Benchmarking would involve comparing the contract's value and terms to other large-scale engineering service contracts awarded by the Department of Defense or other federal agencies, considering the specific technical requirements.
Small Business Impact
The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary contractor, L3Harris Technologies, Inc., likely performed the majority of the work internally. The absence of small business involvement means no direct benefit to the small business ecosystem through this specific award.
Oversight & Accountability
Oversight mechanisms for this contract would typically involve contract officers, program managers, and potentially inspectors general within the Department of the Air Force. Transparency is limited due to the sole-source nature of the award. Accountability would be measured by the successful delivery of engineering services as per the contract's terms and conditions, with performance reviews and payment approvals serving as key measures.
Related Government Programs
- Department of Defense Engineering Services
- Air Force Research and Development Contracts
- L3Harris Technologies, Inc. Government Contracts
- Sole-Source Defense Procurements
Risk Flags
- Sole-source award may indicate a lack of market research or justification.
- Contract performance concluded over 8 years ago, limiting current relevance.
- Fixed Price Incentive contracts can be complex to administer and may not always yield the best value without strong oversight.
Tags
engineering-services, department-of-defense, department-of-the-air-force, definitive-contract, fixed-price-incentive, sole-source, l3harris-technologies, past-performance, naics-541330, indiana
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.6 million to L3HARRIS TECHNOLOGIES, INC.. ENGINEERING SERVICES
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 Air Force).
What is the total obligated amount?
The obligated amount is $26.6 million.
What is the period of performance?
Start: 2010-03-03. End: 2015-07-31.
What specific engineering services were provided under this contract?
The contract, awarded under NAICS code 541330 for Engineering Services, likely encompassed a range of specialized engineering disciplines required by the Department of the Air Force. While the specific details are not provided in the summary data, such services could include design, analysis, testing, systems integration, technical support, and program management for various Air Force platforms, systems, or infrastructure projects. The duration of the contract (nearly five years) suggests a substantial and ongoing requirement for these engineering capabilities, potentially supporting major acquisition programs or long-term operational needs.
What was the justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source is available or capable of providing the required services, or when urgency, national security, or unique capabilities necessitate it. Without access to the official justification documentation (e.g., a Justification and Approval document), the precise reasons remain unknown. However, common rationales include the contractor possessing unique intellectual property, proprietary technology, or an established and indispensable role in supporting existing systems.
How does the Fixed Price Incentive (FPI) contract type function in this context?
A Fixed Price Incentive (FPI) contract is designed to share the risks and rewards between the government and the contractor. It establishes an initial target cost, target profit, and target price. The final price is adjusted based on the final negotiated cost, up to a ceiling price, with a predetermined sharing formula for cost variances. If the final cost is below the target cost, both parties benefit; if it's above, the contractor absorbs a larger portion of the overrun up to the ceiling. This structure incentivizes the contractor to control costs while ensuring the government does not face unlimited price increases.
What is the significance of the contract's start and end dates (2010-2015)?
The contract's performance period from March 3, 2010, to July 31, 2015, places it in the past. This means the data reflects historical spending and performance. Analyzing this contract requires considering the technological and economic context of that era. Benchmarking its value against contemporary contracts for similar services would be most appropriate. Furthermore, understanding the outcomes and lessons learned from this contract could inform current procurement strategies for similar engineering services, especially regarding the management of sole-source awards and incentive fee structures.
What is the typical market size and competition level for engineering services under NAICS 541330?
The Engineering Services sector (NAICS 541330) is substantial, encompassing a wide array of specialized services. The market is generally characterized by a mix of large, established firms and smaller, niche providers. Competition levels can vary significantly depending on the specific service required, the geographic location, and the agency involved. While many procurements are competed, sole-source awards do occur, particularly for highly specialized technical requirements, existing system support, or when a particular contractor possesses unique qualifications. The overall market size for federal engineering services is in the billions of dollars annually, reflecting its critical role in supporting government operations and infrastructure.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc
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
Financial Breakdown
Contract Ceiling: $26,558,344
Exercised Options: $26,558,344
Current Obligation: $26,558,344
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-03-03
Current End Date: 2015-07-31
Potential End Date: 2015-07-31 00:00:00
Last Modified: 2022-05-24
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