DoD's $24.6M L3 Technologies contract for data links support and sustainment awarded via sole-source justification

Contract Overview

Contract Amount: $24,628,464 ($24.6M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-10-24

End Date: 2025-11-30

Contract Duration: 1,498 days

Daily Burn Rate: $16.4K/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 $24.6 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 potential price overruns and limited market engagement. 2. The contract duration of nearly 5 years suggests a long-term need for these specialized engineering services. 3. Firm Fixed Price contract type aims to control costs, but sole-source nature may limit competitive pressure. 4. Focus on data links support and sustainment indicates critical infrastructure for Air Force operations. 5. The absence of small business set-asides or subcontracting plans warrants further investigation into broader economic impact. 6. Utah is the performance location, potentially benefiting the local economy and workforce.

Value Assessment

Rating: questionable

Benchmarking the value of this $24.6 million contract is challenging due to its sole-source nature and lack of publicly available comparable data. Without competition, it's difficult to assess if L3 Technologies, Inc. provided the most cost-effective solution. The firm fixed price structure offers some cost control, but the absence of competitive bids means taxpayers may not have received the best possible value. Further analysis would require access to internal DoD cost estimates or pricing data from similar sole-source awards for comparable services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor, L3 Technologies, Inc., was considered. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they typically result in less price discovery and potentially higher costs for the government compared to full and open competition. The lack of multiple bidders limits the government's ability to negotiate favorable terms based on market dynamics.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding. This can lead to higher overall spending for essential services.

Public Impact

The primary beneficiary is the Department of the Air Force, which receives critical support for its data link systems. Services include sustainment and support, ensuring the operational readiness and effectiveness of vital communication infrastructure. The contract's performance location in Utah suggests a potential positive impact on the local economy through employment and business activity. Specialized engineering expertise is being utilized, potentially fostering a highly skilled workforce within L3 Technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Limited transparency in the sole-source justification process.
No clear indication of small business participation or subcontracting.
Potential for vendor lock-in due to specialized nature of services.

Positive Signals

Firm Fixed Price contract type provides cost certainty.
Long-term sustainment contract ensures continuity of critical operations.
Performance in Utah may stimulate local economic activity.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to defense communications and data link technologies. The market for such specialized services is often characterized by a limited number of highly capable firms. Defense spending on communication systems and sustainment is a significant portion of the overall defense budget, with contracts often awarded through complex procurement processes. Benchmarking requires comparison to other sole-source or competitively awarded sustainment contracts for similar complex electronic and communication systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements. This suggests that L3 Technologies, Inc. will likely perform the majority of the work internally. The absence of small business participation could mean missed opportunities for smaller firms to contribute to this significant defense contract and potentially limit the broader economic benefits to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The firm fixed price nature provides some level of financial oversight by limiting cost overruns. However, the sole-source award mechanism reduces the transparency typically afforded by competitive bidding. Inspector General investigations could be initiated if specific concerns regarding performance, fraud, or abuse arise, but proactive oversight is limited by the procurement method.

Related Government Programs

Air Force Communication Systems Sustainment
Defense Data Link Technology Development
Engineering Services for Military Platforms
Sole-Source Defense Contracts
IT and Communication Infrastructure Support

Risk Flags

Sole-source award lacks competitive justification.
Potential for uncompetitive pricing.
Limited transparency in procurement.
No stated small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.6 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 $24.6 million.

What is the period of performance?

Start: 2021-10-24. End: 2025-11-30.

What is 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, sole-source contracts are justified under circumstances such as when only one responsible source is capable of providing the required supplies or services, when there is a compelling urgency, or when it is necessary to award to a specific contractor due to standardization or interoperability requirements. For this contract, the Department of the Air Force would have had to formally document and approve such a justification, likely related to unique technical capabilities or proprietary technology held by L3 Technologies, Inc. that are essential for the data links support and sustainment.

How does the $24.6 million value of this contract compare to similar data link support and sustainment contracts within the Department of Defense?

Direct comparison of this $24.6 million contract is difficult without access to a broader dataset of similar sole-source or competitively awarded contracts for data link support and sustainment. However, given the nearly 5-year duration (1498 days) and the nature of sustainment for critical defense systems, the total value appears to be within a reasonable range for specialized engineering services. Sole-source awards, by their nature, often do not reflect market-driven pricing, making direct value-for-money comparisons with competitive contracts problematic. Further analysis would require benchmarking against contracts with similar scope, duration, and technical complexity, ideally those awarded through competitive processes.

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

The primary risks associated with a sole-source award of this magnitude ($24.6 million) include potential overpayment due to a lack of competitive pricing pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the procurement process. Taxpayers may not be receiving the best value for their money. Additionally, there's a risk of vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility and increasing long-term costs. The absence of competition also hinders market research and the development of alternative solutions.

What is the expected performance period and what does this duration imply about the criticality of the services?

The contract has an expected performance period of 1498 days, which is approximately 4 years and 1 month, spanning from October 24, 2021, to November 30, 2025. This relatively long duration for sustainment and support services indicates a critical and ongoing need for L3 Technologies, Inc.'s expertise in maintaining and supporting the Air Force's data link systems. Such extended periods suggest that these systems are integral to current operations and require continuous technical attention to ensure reliability, security, and operational effectiveness throughout their lifecycle.

Are there any indications of past performance issues or successes for L3 Technologies, Inc. with similar Department of Defense contracts?

The provided data does not contain specific information regarding L3 Technologies, Inc.'s past performance on similar Department of Defense contracts. A comprehensive assessment of this contract's value and risk would necessitate a review of their performance history, including on-time delivery, quality of work, adherence to budget (where applicable), and overall customer satisfaction from previous government engagements. Without this context, it is difficult to fully evaluate the reliability and capability of the contractor beyond the fact that they were selected for this sole-source award.

What is the historical spending trend for data link support and sustainment within the Department of the Air Force, and how does this contract fit into that pattern?

The provided data does not offer historical spending trends for data link support and sustainment within the Department of the Air Force. To understand this contract's place in the broader spending pattern, one would need access to historical procurement data for similar services over several fiscal years. This would allow for an analysis of whether spending in this area is increasing, decreasing, or remaining stable, and whether this $24.6 million award represents a typical investment or an outlier. Understanding historical context is crucial for assessing the long-term financial commitment and strategic importance of these services.

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

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: $26,246,983

Exercised Options: $24,686,397

Current Obligation: $24,628,464

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $623,921

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