DoD's $22.25M L3Harris contract for ALQ-172 LRU-4 redesign awarded without competition
Contract Overview
Contract Amount: $22,250,014 ($22.3M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2015-09-21
End Date: 2023-06-30
Contract Duration: 2,839 days
Daily Burn Rate: $7.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF ENGINEERING SERVICES FOR FORM, FIT AND FUNCTION INTERFACE (FFFI), REDESIGN OF THE ALQ-172 LRU-4. INCLUDES DEVELOPMENT OF DATA AND MANUFACTURING AND DELIVERY OF PROTOTYPES.
Place of Performance
Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014
Plain-Language Summary
Department of Defense obligated $22.3 million to L3HARRIS TECHNOLOGIES, INC. for work described as: IGF::OT::IGF ENGINEERING SERVICES FOR FORM, FIT AND FUNCTION INTERFACE (FFFI), REDESIGN OF THE ALQ-172 LRU-4. INCLUDES DEVELOPMENT OF DATA AND MANUFACTURING AND DELIVERY OF PROTOTYPES. Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant duration of nearly 8 years suggests a complex and long-term project. 3. Cost-plus-fixed-fee structure may incentivize cost overruns, requiring robust oversight. 4. Focus on form, fit, and function interface redesign indicates critical system integration needs. 5. No small business participation noted, potentially missing opportunities for smaller firms. 6. Awarded to a single contractor, L3Harris Technologies, Inc., raising questions about market availability of specialized expertise.
Value Assessment
Rating: questionable
The contract's value of $22.25 million over nearly 8 years for engineering services and prototype development warrants scrutiny. Without competitive bidding, it's difficult to benchmark the pricing against market rates or similar contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can lead to higher overall costs if not managed tightly, as the contractor is reimbursed for all allowable costs plus a fixed fee. This structure necessitates strong government oversight to ensure cost efficiency and prevent unnecessary expenditures.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when a compelling justification for other-than-full-and-open competition exists. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from multiple bidders vying for the contract. This can lead to higher prices and potentially less optimal solutions.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government missed an opportunity to leverage market forces to secure the best possible price and value for these critical engineering services.
Public Impact
The primary beneficiaries are the Department of the Air Force, which receives critical engineering services for the ALQ-172 system. The contract delivers prototypes and associated data for the redesign of a Line Replaceable Unit (LRU-4) of the ALQ-172. The geographic impact is primarily within New Jersey, where L3Harris Technologies, Inc. is located. Workforce implications include specialized engineering and manufacturing roles at L3Harris, contributing to the defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
- Cost-plus-fixed-fee structure can incentivize cost growth if not rigorously managed.
- Long contract duration (nearly 8 years) increases the risk of scope creep and cost escalation.
- Lack of small business participation means potential missed opportunities for smaller, innovative firms in the defense sector.
Positive Signals
- Focus on form, fit, and function redesign suggests a commitment to improving critical defense capabilities.
- Award to L3Harris Technologies, Inc., a known defense contractor, implies access to established expertise.
- Prototype development indicates a tangible output aimed at enhancing system performance.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense systems. The market for specialized aerospace and defense engineering, particularly for legacy systems like the ALQ-172, is often concentrated among a few large, established contractors. Benchmarking this contract's value is challenging without competitive data, but similar sole-source engineering efforts for complex military platforms can range from millions to tens of millions of dollars depending on scope and duration.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific contract. This represents a missed opportunity to engage the small business defense industrial base, which often brings specialized innovation and agility.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. Given the CPFF structure and long duration, robust oversight is crucial to monitor costs, ensure performance, and manage risks. The Inspector General's office for the Department of Defense may also conduct audits or investigations if specific concerns arise regarding waste, fraud, or abuse.
Related Government Programs
- ALQ-172 Electronic Warfare System
- Defense Engineering Services Contracts
- Aerospace Component Redesign
- Sole-Source Defense Procurements
- Cost-Plus-Fixed-Fee Contracts
Risk Flags
- Sole-source award may indicate lack of competition, potentially leading to higher costs.
- Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
- Long contract duration increases risk of scope creep and cost escalation.
- No small business participation noted.
Tags
defense, department-of-defense, air-force, engineering-services, sole-source, definitive-contract, cost-plus-fixed-fee, prototype-development, new-jersey, l3harris-technologies, electronic-warfare, legacy-systems
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.3 million to L3HARRIS TECHNOLOGIES, INC.. IGF::OT::IGF ENGINEERING SERVICES FOR FORM, FIT AND FUNCTION INTERFACE (FFFI), REDESIGN OF THE ALQ-172 LRU-4. INCLUDES DEVELOPMENT OF DATA AND MANUFACTURING AND DELIVERY OF PROTOTYPES.
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 $22.3 million.
What is the period of performance?
Start: 2015-09-21. End: 2023-06-30.
What is the specific justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. While the specific justification is not detailed in the provided snippet, common reasons for sole-source awards in defense contracting include: unique capabilities possessed by only one contractor, urgent and compelling needs where competition is not feasible, or when the cost of competition would outweigh the benefits. For a complex system like the ALQ-172, it's possible that L3Harris Technologies, Inc. was deemed the only entity with the requisite proprietary knowledge, specialized tooling, or existing integration expertise to perform the form, fit, and function redesign of the LRU-4 without significant delays or cost increases.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for this type of work?
The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development, engineering services, 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 and receives a predetermined fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of the actual costs incurred, incentivizing efficiency. It also differs from cost-plus-incentive-fee (CPIF) contracts, which share cost savings or overruns between the government and contractor. For engineering services and prototype development, CPFF can be advantageous when innovation and flexibility are paramount, but it places a significant burden on the government to meticulously track and audit costs to prevent overspending.
What are the potential risks associated with a nearly 8-year contract duration for engineering services?
A contract duration of approximately 2839 days (nearly 8 years) for engineering services and prototype development presents several risks. Firstly, the risk of 'scope creep' is elevated, where the project's objectives may expand beyond the original intent, leading to increased costs and delays. Secondly, technological obsolescence is a concern; by the time the project concludes, the developed solutions might be outdated due to rapid advancements in technology. Thirdly, maintaining consistent government oversight and institutional knowledge over such a long period can be challenging due to personnel turnover. Finally, the longer the contract, the greater the potential for cost escalation due to inflation, unforeseen technical challenges, and changes in program priorities.
What is the significance of the 'Form, Fit, and Function Interface (FFFI)' redesign?
Redesigning the Form, Fit, and Function Interface (FFFI) of a Line Replaceable Unit (LRU) like the ALQ-172's LRU-4 is critical for maintaining and upgrading complex military systems. 'Form' refers to the physical dimensions and shape, 'Fit' refers to how the unit integrates mechanically with the larger system, and 'Function' refers to its operational performance and interface with other components. An FFFI redesign implies that the new LRU-4 must be interchangeable with the old one in terms of its physical mounting, connections, and operational behavior, while potentially offering improved performance, reliability, or maintainability. This ensures backward compatibility and minimizes disruption to the existing platform, which is crucial for systems like electronic warfare suites that are deeply integrated into aircraft.
How does this contract align with broader trends in defense spending for electronic warfare systems?
This contract aligns with the broader trend of sustained investment in electronic warfare (EW) capabilities by defense agencies. EW systems are crucial for protecting military assets from threats, disrupting enemy communications and radar, and gathering intelligence. The ALQ-172 is a known electronic warfare system, and the need for redesign and prototyping of its components suggests ongoing efforts to modernize and maintain the effectiveness of these critical systems against evolving threats. Defense spending in EW has been increasing globally, driven by the proliferation of advanced adversary capabilities. Contracts like this, even if sole-source, reflect the government's commitment to ensuring its EW platforms remain relevant and capable.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc
Address: 77 RIVER RD, CLIFTON, NJ, 07014
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $22,250,014
Exercised Options: $22,250,014
Current Obligation: $22,250,014
Subaward Activity
Number of Subawards: 60
Total Subaward Amount: $23,846,056
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-09-21
Current End Date: 2023-06-30
Potential End Date: 2023-06-30 00:00:00
Last Modified: 2024-05-31
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