DoD's $20.7M R&D contract for electronics and communication equipment awarded to L-3 Communications Corporation

Contract Overview

Contract Amount: $20,704,149 ($20.7M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-07-19

End Date: 2008-06-19

Contract Duration: 701 days

Daily Burn Rate: $29.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200610!000354!5700!FA8307!HQ CPSG/RMK !FA830706C0009 !A!N! !N! ! !20060719!20080401!008975880!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!9020 BALBOA AVE !SAN DIEGO !CA!92123!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000009879041!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !541710!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!U!2!005!B! !A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92123

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $20.7 million to L3 TECHNOLOGIES, INC. for work described as: 200610!000354!5700!FA8307!HQ CPSG/RMK !FA830706C0009 !A!N! !N! ! !20060719!20080401!008975880!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!9020 BALBOA AVE !SAN DIEGO !CA!92123!66000!073!06!SAN DIEGO !SAN … Key points: 1. Contract focused on research and development for advanced defense technologies. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. Contract duration of 701 days indicates a medium-term project. 4. The contract type is Cost Plus Fixed Fee, which can pose cost control challenges. 5. Primary place of performance is California, potentially impacting the local economy. 6. The North American Industry Classification System (NAICS) code points to R&D services.

Value Assessment

Rating: fair

The contract's total value of $20.7 million for a 701-day period appears reasonable for specialized R&D in defense electronics. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risks for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. Without detailed cost breakdowns or performance metrics, a precise value-for-money assessment is challenging. Benchmarking against similar R&D contracts for electronics and communication equipment would provide a clearer picture of its competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bidders suggests a healthy level of competition for this R&D requirement. A competitive process generally leads to better price discovery and potentially more innovative solutions, benefiting the government.

Taxpayer Impact: Taxpayers benefit from a competitive award process, as it is expected to drive down costs and ensure the government receives the best value for its investment in advanced defense technologies.

Public Impact

The primary beneficiaries are the Department of Defense, which receives advanced electronics and communication capabilities. The contract supports the development of new technologies crucial for national security. The place of performance in California may create or sustain jobs in the aerospace and defense sector within the state. The contract contributes to the advancement of the U.S. defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not closely monitored.
Limited public information on specific deliverables makes it difficult to assess performance outcomes.
The relatively short contract duration might indicate a project with defined, albeit complex, R&D goals.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Multiple bidders (5) indicate market interest and potential for competitive pricing.
Contract supports critical defense research and development initiatives.

Sector Analysis

This contract falls within the broader defense electronics and communication equipment sector, a critical area for national security. The R&D focus suggests it's aimed at developing next-generation capabilities rather than procuring off-the-shelf items. The market for defense R&D is characterized by high technical complexity, long development cycles, and significant government investment. Comparable spending in this sector often involves substantial sums due to the specialized nature of the work and the need for cutting-edge innovation.

Small Business Impact

There is no explicit indication of a small business set-aside for this contract. Given the nature of advanced R&D in defense electronics, prime contractors like L-3 Technologies often have the capacity to handle large, complex projects. However, opportunities for small businesses may exist further down the subcontracting chain, depending on the specific technical requirements and L-3's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to manage allowable costs and the fixed fee. Transparency regarding specific R&D milestones and outcomes would be crucial for accountability, though such details are often sensitive in defense contracts.

Related Government Programs

Advanced Technology Development
Defense Research and Development
Electronics and Communication Systems
National Security Technologies

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Limited public detail on specific R&D outcomes hinders performance assessment.
Contractor's cost control effectiveness requires ongoing government scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to L3 TECHNOLOGIES, INC.. 200610!000354!5700!FA8307!HQ CPSG/RMK !FA830706C0009 !A!N! !N! ! !20060719!20080401!008975880!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!9020 BALBOA AVE !SAN DIEGO !CA!92123!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000009879041!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !541710!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is L3 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 $20.7 million.

What is the period of performance?

Start: 2006-07-19. End: 2008-06-19.

What specific R&D activities were undertaken under this contract?

The provided data indicates the contract was for 'Research and Development in the Physical, Engineering, and Life Sciences' with a Product Service Code (PSC) related to 'Electronics and Communication Equipment'. However, the specific R&D activities, such as the development of particular communication systems, encryption technologies, or sensor advancements, are not detailed in the summary data. Such specifics are often found in the contract's Statement of Work (SOW), which is not publicly available in this dataset. The contract's objective was likely to advance the capabilities of the Department of Defense in these critical areas, potentially leading to new or improved military hardware and software.

How does the $20.7 million award compare to similar R&D contracts in defense electronics?

Comparing the $20.7 million award requires context on the scope and duration. For a 701-day (approximately 23-month) R&D effort in defense electronics, this figure appears within a reasonable range, especially considering the specialized nature of the work and the potential for cutting-edge innovation. However, without knowing the specific technological advancements sought, the number of personnel involved, or the complexity of the research, a direct comparison is difficult. Larger, multi-year programs for developing entirely new weapon systems or communication networks can easily run into hundreds of millions or billions of dollars. Conversely, smaller, more focused R&D projects might be in the single-digit millions. This contract seems to represent a mid-tier R&D investment.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risk of a CPFF contract for R&D lies in cost control. While the contractor's profit (the fixed fee) is predetermined, they are reimbursed for all allowable costs incurred. If the R&D effort proves more complex or expensive than initially anticipated, the total cost to the government can escalate significantly beyond initial projections. The contractor has less incentive to control costs compared to fixed-price contracts, as their fee remains constant regardless of the final cost. Effective oversight by the government is crucial to scrutinize allowable costs, ensure efficiency, and prevent unnecessary expenditures. For R&D, where outcomes can be uncertain, CPFF is often used to encourage innovation without the contractor bearing excessive financial risk, but it requires diligent government management.

What was the contractor's track record with the government at the time of award?

At the time of this contract award in July 2006, L-3 Communications Corporation (which later became part of L3 Technologies, Inc.) was already a significant player in the defense contracting industry. They had a history of performing various services and providing equipment to the Department of Defense and other government agencies. While the specific performance history on contracts immediately preceding this award isn't detailed here, L-3 was generally recognized as a capable contractor in areas like aerospace systems, communications, and electronic warfare. Government contract databases often track past performance, which would have been a factor in the evaluation process for this 'full and open competition' award.

How has federal spending in the 'Electronics and Communication Equipment' category evolved since this contract?

Federal spending in the 'Electronics and Communication Equipment' category, particularly within the Department of Defense, has generally seen fluctuations but has remained substantial since 2006. Driven by evolving threats, technological advancements (e.g., cybersecurity, satellite communications, networked warfare), and modernization efforts, spending in this area has likely increased in nominal terms, and potentially in real terms, to maintain technological superiority. Factors like increased reliance on secure communication networks, intelligence, surveillance, and reconnaissance (ISR) systems, and electronic warfare capabilities continue to drive investment. While specific year-over-year figures require detailed budget analysis, the overall trend points towards sustained, significant federal investment in this sector.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: 9020 BALBOA AVE, SAN DIEGO, CA, 92123

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline