DoD Awards $257M for U2 Data Links Support and Sustainment to L3 Technologies

Contract Overview

Contract Amount: $25,725,710 ($25.7M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-10-24

End Date: 2026-08-30

Contract Duration: 2,136 days

Daily Burn Rate: $12.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: U2 DATA LINKS SUPPORT AND SUSTAINMENT

Place of Performance

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

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $25.7 million to L3 TECHNOLOGIES, INC. for work described as: U2 DATA LINKS SUPPORT AND SUSTAINMENT Key points: 1. Significant contract value of $257.26 million for critical intelligence, surveillance, and reconnaissance (ISR) support. 2. Sole-source award to L3 Technologies, Inc. raises questions about competition and potential price discovery. 3. Long contract duration (2020-2026) suggests a need for sustained, specialized capabilities. 4. The 'Engineering Services' NAICS code indicates a focus on technical and analytical support for the U2 program.

Value Assessment

Rating: questionable

The contract value of $257.26 million is substantial. Without competitive bidding, it's difficult to benchmark pricing against similar sustainment contracts for advanced ISR platforms. The firm fixed-price structure provides some cost certainty, but the lack of competition limits the government's ability to ensure the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, L3 Technologies, Inc., was considered. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. The justification for a sole-source award needs careful scrutiny to ensure it was truly necessary.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for the U2 data link support and sustainment services.

Public Impact

Ensures continued operational readiness of the U2 reconnaissance aircraft, vital for national security. Supports advanced data link capabilities, crucial for real-time intelligence gathering and dissemination. Potential for reduced competition impacts innovation and cost-effectiveness in the long term. Highlights reliance on a single contractor for critical ISR sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Long-term sustainment contract.
Lack of clear justification for sole-sourcing.
Potential for cost overruns due to lack of competition.

Positive Signals

Ensures critical ISR capability.
Long-term support for aging platform.
Firm fixed-price contract provides cost certainty.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting advanced aerospace and defense systems. The $257 million award is significant for this niche, indicating the high cost of maintaining specialized ISR platforms like the U2. Benchmarks for similar sustainment contracts are difficult to establish due to the unique nature of the U2 and the sole-source award.

Small Business Impact

The contract was awarded to L3 Technologies, Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award. Future solicitations should explore opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight from the Department of Defense and potentially Congress to ensure the justification is sound and that taxpayer funds are being used efficiently. Regular performance reviews and cost audits would be prudent.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award
Long contract duration
Lack of small business participation
Potential for price creep
Reliance on a single vendor for critical technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.7 million to L3 TECHNOLOGIES, INC.. U2 DATA LINKS SUPPORT AND SUSTAINMENT

Who is the contractor on this award?

The obligated recipient is L3 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 $25.7 million.

What is the period of performance?

Start: 2020-10-24. End: 2026-08-30.

What was the specific justification provided by the Department of the Air Force for awarding this contract on a sole-source basis to L3 Technologies, Inc.?

The provided data does not include the specific justification for the sole-source award. Typically, such justifications are based on factors like unique capabilities, proprietary technology, or urgent and compelling needs where only one source can reasonably fulfill the requirement. A thorough review of the contract's justification document would be necessary to understand the rationale.

How does the per-unit cost of sustainment for the U2 data link system compare to similar systems on other ISR platforms, given the sole-source nature of this award?

Due to the sole-source award to L3 Technologies, Inc., a direct per-unit cost comparison with similar systems on other ISR platforms is not feasible. Competitive bidding typically allows for benchmarking against market rates. Without this competition, it's challenging to ascertain if the government is receiving a cost-effective solution, making robust oversight crucial.

What are the potential risks associated with the long-term sustainment of the U2 data link system being solely reliant on L3 Technologies, Inc.?

The primary risks include potential price escalation over the contract's duration due to the lack of competition, reduced incentive for innovation from L3 Technologies, and a vulnerability if the company faces financial or operational difficulties. This sole reliance also limits the government's flexibility in seeking alternative solutions or leveraging new technologies that may emerge.

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

Solicitation ID: FA852820R0001

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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: $25,725,710

Exercised Options: $25,725,710

Current Obligation: $25,725,710

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $3,311,640

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852821D0001

IDV Type: IDC

Timeline