L3Harris Technologies awarded $26.2M for engineering services, spanning nearly a decade

Contract Overview

Contract Amount: $26,224,336 ($26.2M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-03-30

End Date: 2018-03-31

Contract Duration: 4,019 days

Daily Burn Rate: $6.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES IAW SOW PARA 1.4, 1.5, 1.6, & 4.2

Place of Performance

Location: AMITYVILLE, SUFFOLK County, NEW YORK, 11701

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $26.2 million to L3HARRIS TECHNOLOGIES, INC. for work described as: ENGINEERING SERVICES IAW SOW PARA 1.4, 1.5, 1.6, & 4.2 Key points: 1. Contract value of $26.2M over a 10-year period suggests a moderate annual spend. 2. The contract type, Cost Plus Fixed Fee, can lead to cost overruns if not managed carefully. 3. Full and Open Competition after Exclusion of Sources indicates a competitive process but with specific source limitations. 4. The duration of the contract (4019 days) suggests a long-term need for these engineering services. 5. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector. 6. Awarded by the Defense Contract Management Agency, indicating a focus on defense-related systems.

Value Assessment

Rating: fair

The contract value of $26.2 million spread over approximately 11 years results in an average annual spend of around $2.4 million. This figure needs to be benchmarked against similar engineering service contracts within the defense sector to determine value for money. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation if the fixed fee is not adequately justified by the scope of work and if oversight is not rigorous. Without specific performance metrics or comparison data, assessing the true value is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This implies that while the competition was intended to be open, certain sources were excluded, suggesting a specific set of pre-qualified or invited bidders. The exact number of bidders is not provided, but the 'exclusion of sources' clause indicates a potentially narrower competitive field than a truly unrestricted full and open competition. This could impact the level of price discovery and potentially lead to higher prices than if all potential sources were allowed to bid.

Taxpayer Impact: Taxpayers may have received less competitive pricing due to the exclusion of certain sources, potentially increasing the overall cost of the engineering services.

Public Impact

The primary beneficiaries are likely entities within the Department of Defense requiring specialized engineering services for search, detection, navigation, guidance, and related systems. The services delivered are critical for the development, maintenance, and enhancement of advanced defense systems. The geographic impact is primarily tied to the operations of the Defense Contract Management Agency and the contractor's facilities, likely within New York where the contractor is registered. Workforce implications include employment for engineers, technicians, and support staff involved in the specialized manufacturing and engineering processes.

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.
Exclusion of sources in the competition process may limit competitive pricing.
Long contract duration (over 10 years) increases the risk of scope creep or outdated technology if not managed proactively.
Lack of specific performance data makes it difficult to assess efficiency and effectiveness.
Specialized nature of the services might limit the pool of qualified contractors, potentially impacting competition.

Positive Signals

Awarded through a competitive process, even with source exclusions, suggesting some level of market vetting.
Long-term contract indicates a sustained need and potential for stable, specialized expertise.
Contractor L3Harris Technologies is a known entity in the defense sector, suggesting established capabilities.
The contract supports critical defense systems, aligning with national security objectives.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, classified under NAICS code 334511. This is a highly specialized segment of the manufacturing industry, often characterized by high barriers to entry due to technological complexity, stringent quality requirements, and significant R&D investment. Spending in this sector is heavily influenced by defense budgets and technological advancements. Comparable spending benchmarks would typically be found within defense procurement data for similar system development and manufacturing contracts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this particular award. The focus is likely on larger, established defense contractors capable of meeting the specialized engineering and manufacturing requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification for the fixed fee. Transparency is generally limited in defense contracts of this nature, with specific details often classified or proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense System Engineering Services
Navigation and Guidance System Manufacturing
Search and Detection Equipment Procurement
Aeronautical and Nautical Instrument Development
Cost Plus Fixed Fee Contracts
Defense Contract Management Agency Operations

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition due to 'Exclusion of Sources'.
Lack of publicly available performance metrics.
Long contract duration may pose risks.
Contract type may not be optimal for cost control if scope was well-defined.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.2 million to L3HARRIS TECHNOLOGIES, INC.. ENGINEERING SERVICES IAW SOW PARA 1.4, 1.5, 1.6, & 4.2

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 $26.2 million.

What is the period of performance?

Start: 2007-03-30. End: 2018-03-31.

What is the historical spending trend for L3Harris Technologies with the Department of Defense for similar engineering services?

Analyzing L3Harris Technologies' historical spending with the Department of Defense for similar engineering services requires access to comprehensive federal procurement databases. While this specific contract awarded in 2007 and ending in 2018 totaled $26.2 million, it represents only one data point. A broader analysis would involve examining all contracts awarded to L3Harris (and its predecessors/subsidiaries) under relevant NAICS codes (like 334511) and PSC codes related to engineering and technical services. This would reveal patterns in contract values, durations, and types (e.g., CPFF, FFP). Understanding these trends would help contextualize the $26.2 million award, indicating whether it was a typical, large, or small award relative to their overall portfolio with the DoD. It would also highlight any shifts in spending or focus areas over time, providing insights into the government's long-term reliance on the contractor for specific capabilities.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to industry norms for similar defense engineering services?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense acquisition, particularly for research and development or services where the scope is not precisely defined at the outset, allowing for flexibility. For engineering services like those specified, CPFF is often used when the government needs a contractor to explore solutions or develop systems where final costs are uncertain. However, it places the risk of cost overruns primarily on the government, as the contractor is reimbursed for all allowable costs plus a predetermined fixed fee. Industry norms suggest that for well-defined services, fixed-price contracts are preferred for better cost control. The appropriateness of CPFF here depends heavily on the specific SOW details (paras 1.4, 1.5, 1.6, & 4.2) and the level of uncertainty involved. If the scope was relatively stable, a fixed-price contract might have offered better value. Benchmarking against similar contracts would reveal if CPFF was the standard or an exception for this type of work.

What specific 'sources' were excluded in the 'Full and Open Competition After Exclusion of Sources' and why?

The designation 'Full and Open Competition After Exclusion of Sources' indicates that the solicitation was publicly advertised, but specific potential offerors were intentionally excluded from participating. The exact identity of these excluded sources and the rationale for their exclusion are typically detailed in the contract's Justification for Other Than Full and Open Competition (JOFOC) or similar documentation, which is often not publicly released in detail for national security or proprietary reasons. Common reasons for exclusion might include: prior performance issues, lack of specific security clearances, inability to meet unique technical requirements, or if the contract was a follow-on to a previous effort where only specific contractors possessed the necessary knowledge or proprietary data. Without access to the JOFOC, it's impossible to definitively state which sources were excluded and why. This exclusion inherently limits the competitive landscape, potentially impacting the final price and innovation.

What performance metrics or key performance indicators (KPIs) were associated with this $26.2M contract?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) associated with this contract. For a Cost Plus Fixed Fee contract, performance is typically monitored through progress reports, milestone achievements, and adherence to the Statement of Work (SOW). The 'fixed fee' component implies that the contractor's ultimate profit is tied to successful completion, but the exact metrics used to define 'success' are crucial for assessing value and accountability. Without these KPIs, it's difficult to objectively evaluate the contractor's performance, the efficiency of the services rendered, or whether the government received optimal value for its investment. Standard practice in defense contracting involves defining measurable outcomes, quality standards, and delivery timelines within the SOW or contract clauses.

How does the $26.2M total award value compare to the initial estimated cost or ceiling for this engineering services contract?

The provided data only lists the total award amount ($26,224,335.99) and does not include information about the initial estimated cost, ceiling, or target cost for this contract. For a Cost Plus Fixed Fee (CPFF) contract, there is typically a ceiling amount that the government will not exceed, and a target cost that forms the basis for the fixed fee calculation. Without knowing these initial figures, it's impossible to determine if the final award amount represented an overrun, an underrun, or stayed within the initially projected budget. Comparing the final award to the initial estimates is a critical step in assessing cost control and the accuracy of the government's initial budgeting and the contractor's cost projections.

What is the significance of the NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing) in the context of this contract?

The NAICS code 334511 signifies that this contract is for the manufacturing of systems and instruments used for search, detection, navigation, and guidance, particularly within the aeronautical and nautical domains. This places the contract firmly within the defense and aerospace manufacturing sector, focusing on high-technology products critical for military operations. Companies operating under this code typically engage in complex design, engineering, and production processes, often involving advanced electronics, sensors, and software. The award to L3Harris Technologies under this code suggests the company provides or manufactures components or integrated systems essential for platforms like aircraft, ships, or ground-based surveillance and targeting systems. This specialization implies a need for highly skilled labor and adherence to rigorous quality and performance standards.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 1500 NEW HORIZONS BLVD, AMITYVILLE, NY, 11701

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: $26,224,336

Exercised Options: $26,224,336

Current Obligation: $26,224,336

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline