DoD's $24.1M U2 Data Links Support Contract Awarded to L3 Technologies, Inc. with No Competition

Contract Overview

Contract Amount: $24,105,435 ($24.1M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-03-26

End Date: 2025-08-29

Contract Duration: 1,617 days

Daily Burn Rate: $14.9K/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 $24.1 million to L3 TECHNOLOGIES, INC. for work described as: U2 DATA LINKS SUPPORT AND SUSTAINMENT Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The fixed-price contract structure aims to control costs, but the lack of competition limits benchmarking opportunities. 3. Performance period extends over four years, indicating a long-term need for these specialized engineering services. 4. The contract is categorized under Engineering Services, a broad field that requires careful oversight. 5. Awardee L3 Technologies, Inc. is a significant player in the defense sector, suggesting established capabilities. 6. The absence of small business set-asides or subcontracting plans warrants further investigation into broader economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this $24.1 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if L3 Technologies, Inc. offered the most cost-effective solution. The firm fixed-price type provides some cost certainty, but the lack of comparison makes it hard to assess if the pricing is aligned with market rates for similar specialized engineering services. Further analysis would require access to internal cost breakdowns or comparable sole-source awards.

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 solicited. This approach bypasses the competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), they limit price discovery and may not yield the best value for taxpayers.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from a competitive bidding environment. This could potentially lead to higher prices than if multiple vendors had competed.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which will receive critical support for U2 data links. Services delivered include sustainment and support, ensuring the operational readiness of vital intelligence, surveillance, and reconnaissance (ISR) platforms. The contract's geographic impact is primarily within Utah, where the awardee is located, but the operational impact extends to wherever U2 aircraft are deployed. Workforce implications include the retention of specialized engineering and technical jobs within L3 Technologies, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits transparency in cost determination.
Potential for vendor lock-in due to specialized nature of services.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awardee has established capabilities in defense sector.
Long-term support ensures operational continuity for critical ISR assets.

Sector Analysis

This contract falls within the Engineering Services sector, a broad category encompassing design, development, and technical support. The defense industry relies heavily on such specialized services to maintain complex aerospace and intelligence systems. The market for these services is often characterized by high barriers to entry due to technical expertise and security clearances required. Comparable spending benchmarks are difficult to establish without more specific details on the U2 data link system's unique requirements.

Small Business Impact

The contract details indicate no specific small business set-aside provisions were applied, nor is there an indication of subcontracting goals for small businesses. This suggests that the primary award went to a large business, L3 Technologies, Inc. The absence of small business participation requirements could limit opportunities for smaller firms to contribute to this defense program and potentially reduce the overall economic benefit to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver specified services within the agreed price. Transparency is limited due to the sole-source nature of the award, but contract performance data and payment information should be publicly accessible through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Systems Support
Aerospace Engineering Services
Defense Communications Systems
Aircraft Sustainment and Maintenance
Specialized Technical Services

Risk Flags

Sole-source award lacks competitive justification.
Potential for uncompetitive pricing.
Limited transparency in cost determination.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.1 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 $24.1 million.

What is the period of performance?

Start: 2021-03-26. End: 2025-08-29.

What is the track record of L3 Technologies, Inc. in delivering similar engineering support services to the Department of Defense?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a substantial history of providing a wide array of engineering, technical, and support services to the Department of Defense and other government agencies. Their portfolio often includes complex systems integration, avionics, communications, and intelligence support. While specific performance metrics for this particular U2 data links contract are not detailed here, the company's general track record suggests they possess the requisite technical expertise and experience. However, a deeper dive into past performance reviews, contract awards, and any documented issues on similar programs would be necessary for a comprehensive assessment of their reliability and capability in this specific domain.

How does the $24.1 million value of this contract compare to similar sole-source engineering support contracts for ISR platforms?

Comparing the $24.1 million value of this sole-source contract for U2 data links support to similar contracts is challenging without more specific data points. Sole-source awards inherently lack the price discovery mechanism of competition, making direct value comparisons difficult. However, engineering support for specialized ISR platforms can be substantial, often running into tens or hundreds of millions of dollars over the life of a system, depending on the complexity, age, and operational tempo. To benchmark this contract effectively, one would need to identify other sole-source or competitively awarded contracts for sustainment and support of comparable ISR aircraft systems, analyze their scope of work, duration, and total value, and then adjust for inflation and specific technological differences.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a $24.1 million contract on a sole-source basis are related to cost and competition. Without competition, there is a heightened risk that the government may pay a higher price than necessary, as the vendor faces less pressure to offer the most competitive rates. There's also a risk of reduced innovation, as the sole provider may have less incentive to develop more efficient or advanced solutions. Furthermore, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single vendor, potentially leading to vendor lock-in and limiting future flexibility. Ensuring robust oversight and justification for the sole-source determination is critical to mitigating these risks.

What is the expected effectiveness of the U2 data links support provided by L3 Technologies, Inc. in maintaining the operational readiness of the U2 fleet?

The expected effectiveness of the U2 data links support hinges on L3 Technologies, Inc.'s ability to deliver the contracted services reliably and efficiently throughout the contract period (ending August 2025). The U2 platform, while aging, remains a critical asset for intelligence, surveillance, and reconnaissance missions. Effective data link support is crucial for ensuring seamless communication and data transmission from the aircraft to ground stations, which is fundamental to its operational value. Given L3 Technologies' experience in defense systems, the expectation is that they will maintain the necessary technical expertise and resources to ensure the data links function as intended, thereby contributing to the overall operational readiness and mission success of the U2 fleet.

How has federal spending on engineering services for intelligence and reconnaissance platforms evolved over the past five years?

Federal spending on engineering services for intelligence and reconnaissance (ISR) platforms has generally seen consistent demand, driven by ongoing modernization efforts and the need to maintain legacy systems. While specific figures for ISR platform engineering services are aggregated within broader categories like 'Engineering Services' (NAICS 541330), overall defense spending trends provide context. The Department of Defense consistently allocates significant portions of its budget to ISR capabilities, including aircraft, satellites, and ground systems. This includes substantial investment in sustainment, upgrades, and new platform development. Over the past five years, there has been a continued emphasis on enhancing data processing, secure communications, and network-centric warfare capabilities, all of which rely heavily on specialized engineering support for the underlying platforms and their associated data links.

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: FA852821R0003

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: $24,105,435

Exercised Options: $24,105,435

Current Obligation: $24,105,435

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $1,030,720

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