DoD Awards $22.8M for U-2 Aircraft Sustainment to L3 Technologies, Inc

Contract Overview

Contract Amount: $22,820,367 ($22.8M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-10-24

End Date: 2024-03-28

Contract Duration: 1,617 days

Daily Burn Rate: $14.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DATA LINKS SUPPORT AND SUSTAINMENT FOR U-2 AIR. EFFORT IS THE FY20 SUSTAINMENT ORDER.

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to L3 TECHNOLOGIES, INC. for work described as: DATA LINKS SUPPORT AND SUSTAINMENT FOR U-2 AIR. EFFORT IS THE FY20 SUSTAINMENT ORDER. Key points: 1. Significant contract value for specialized aircraft sustainment. 2. L3 Technologies, Inc. is the sole awardee. 3. Potential risk associated with single-source awards. 4. Focus on engineering services within the defense sector.

Value Assessment

Rating: fair

The contract value of $22.8M over approximately 5 years for U-2 sustainment appears reasonable given the specialized nature of the aircraft. However, without specific benchmarks for U-2 sustainment, a direct comparison is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, indicating a lack of competition. This method may limit price discovery and potentially lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competition for this sustainment effort could result in a higher overall cost to taxpayers than if multiple vendors had been considered.

Public Impact

Ensures continued operational readiness of the U-2 reconnaissance aircraft. Supports critical intelligence, surveillance, and reconnaissance (ISR) missions. Maintains specialized engineering expertise for a unique platform.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Long contract duration without clear competition.
Potential for cost overruns in sustainment.

Positive Signals

Ensures critical platform sustainment.
Award to established defense contractor.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on engineering services for aircraft sustainment. Spending benchmarks for specialized aircraft like the U-2 are highly variable due to unique requirements and limited platforms.

Small Business Impact

The data indicates no specific set-aside for small businesses. The awardee, L3 Technologies, Inc., is a large corporation, suggesting limited direct benefit to small businesses through this specific contract.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency, which is responsible for oversight. However, the sole-source nature warrants close monitoring to ensure fair pricing and effective service delivery.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award.
Lack of competition.
Potential for cost escalation.
Long contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to L3 TECHNOLOGIES, INC.. DATA LINKS SUPPORT AND SUSTAINMENT FOR U-2 AIR. EFFORT IS THE FY20 SUSTAINMENT ORDER.

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 $22.8 million.

What is the period of performance?

Start: 2019-10-24. End: 2024-03-28.

What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Agencies must conduct market research and document the rationale extensively. For pricing, agencies often rely on historical data, cost analysis, and negotiation techniques to ensure the price is fair and reasonable, even without competitive bids.

What are the long-term risks associated with sustaining a platform like the U-2 through sole-source contracts?

Long-term sole-source contracts for specialized platforms like the U-2 carry risks of escalating costs due to a lack of competitive pressure. This can also lead to vendor lock-in, reduced innovation, and potential degradation of technical expertise within the government if not actively managed. Over time, the absence of competition may hinder the adoption of more cost-effective sustainment solutions.

How does the sustainment of the U-2 aircraft contribute to the overall effectiveness of DoD's intelligence, surveillance, and reconnaissance (ISR) capabilities?

The U-2 aircraft remains a critical asset for high-altitude intelligence, surveillance, and reconnaissance (ISR) missions, providing persistent monitoring and data collection capabilities that are difficult to replicate. Its sustainment ensures the continued availability of these vital ISR assets, supporting national security objectives by providing actionable intelligence to decision-makers across various operational theaters.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,948,427

Exercised Options: $25,948,427

Current Obligation: $22,820,367

Actual Outlays: $5,069,350

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $1,197,714

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852716D0011

IDV Type: IDC

Timeline