DoD's $23.9M U2 Data Links Support Contract Awarded to L3 Technologies, Inc

Contract Overview

Contract Amount: $23,929,579 ($23.9M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-10-24

End Date: 2026-02-01

Contract Duration: 1,196 days

Daily Burn Rate: $20.0K/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 $23.9 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, limiting price competition. 2. Long-term contract duration of nearly 4 years suggests significant program commitment. 3. Fixed-price contract type aims to control costs, but sole-source nature may inflate pricing. 4. Focus on engineering services indicates a need for specialized technical expertise. 5. Performance is concentrated in Utah, potentially impacting local workforce and economy. 6. Lack of competition raises concerns about achieving optimal value for taxpayer funds.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the absence of competitive bids. The firm fixed-price structure provides some cost control, but without market comparison, it's difficult to ascertain if the $23.9 million price tag represents a fair market value. The extended duration suggests a critical need for these services, but the lack of competition prevents a robust assessment of cost-effectiveness against potential alternatives or other providers.

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 standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and can lead to higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: The absence of competition means taxpayers may not be benefiting from the most competitive pricing available in the market. This could result in a less efficient use of federal funds, as the government does not have the leverage that multiple bids provide to negotiate lower prices.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives critical support for its U2 data links. Services delivered include essential engineering support and sustainment for advanced data link systems. Geographic impact is concentrated in Utah, where the contract's performance is based. Workforce implications may include specialized engineering roles within L3 Technologies, Inc., potentially in Utah.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Extended contract duration without clear performance metrics could mask inefficiencies.
Lack of transparency in the sole-source justification process.

Positive Signals

Firm fixed-price contract type provides cost certainty.
Focus on specialized engineering services for critical U2 systems.
Contract awarded to a known entity, L3 Technologies, Inc., suggesting existing capability.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the aerospace and defense industry. The market for specialized engineering and sustainment services for complex military platforms like the U2 is often characterized by a limited number of highly qualified providers. Spending in this area is driven by the need to maintain the operational readiness and technological edge of aging or specialized aircraft, with significant government investment allocated to ensure system functionality and upgrades.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the specialized nature of the engineering services required for the U2 data links, it is likely that the prime contractor, L3 Technologies, Inc., possesses unique capabilities. However, there is potential for subcontracting opportunities for small businesses if L3 Technologies, Inc. chooses to engage them for specific components or support services, though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to internal review and potentially oversight by the Government Accountability Office (GAO) if protested. Transparency is limited due to the non-competitive nature, but contract performance and financial expenditures would be monitored through standard federal procurement reporting mechanisms.

Related Government Programs

U2 Aircraft Sustainment Programs
Aerospace Engineering Services
Defense Data Link Systems
Intelligence, Surveillance, and Reconnaissance (ISR) Platforms

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns due to lack of competition.
Limited transparency in contract justification and negotiation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.9 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 $23.9 million.

What is the period of performance?

Start: 2022-10-24. End: 2026-02-01.

What is the track record of L3 Technologies, Inc. in performing similar engineering and sustainment contracts for the Department of Defense?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a substantial history of performing complex engineering, sustainment, and technology integration services for various U.S. military branches, including the Air Force. They are known for their work on intelligence, surveillance, and reconnaissance (ISR) platforms, avionics, and communication systems. Their portfolio often includes modifications, upgrades, and lifecycle support for critical defense assets. While specific performance metrics for this particular U2 contract are not publicly detailed, their general track record suggests a capacity to handle sophisticated technical requirements. However, a deeper dive into past performance reviews, contract awards, and any past performance issues would be necessary for a comprehensive assessment.

How does the $23.9 million cost compare to similar U2 data link support contracts or engineering services for comparable aircraft?

Direct comparison of the $23.9 million cost for this sole-source U2 data link support contract is difficult without access to detailed cost breakdowns and market data for similar services. Sole-source awards inherently lack the price discovery mechanism of competitive bidding, making it challenging to benchmark against market rates. However, engineering services for specialized military aircraft can range significantly based on complexity, duration, and technology involved. For context, sustainment and upgrade contracts for aging platforms like the U2 can run into tens or hundreds of millions of dollars over their lifecycle. Without competitive bids or detailed cost analysis, it's hard to definitively state if this figure is high or low relative to a competitive market, but the lack of competition is a primary risk factor for potentially inflated pricing.

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

The primary risk associated with awarding a $23.9 million contract on a sole-source basis is the potential for inflated pricing and reduced value for taxpayer money. Without competition, L3 Technologies, Inc. faces less pressure to offer the most cost-effective solution. This can also lead to a lack of innovation, as there is no incentive to develop more efficient methods or technologies to win a bid. Furthermore, it raises concerns about the government's ability to secure the best available talent and technology, as other capable firms were not given the opportunity to compete. Transparency and accountability can also be diminished, making it harder to scrutinize the necessity and cost-effectiveness of the services provided.

What is the expected effectiveness of the U2 data link systems supported by this contract?

The effectiveness of the U2 data link systems, supported by this contract, is crucial for the aircraft's intelligence, surveillance, and reconnaissance (ISR) mission capabilities. These systems enable the transmission of vital data, imagery, and sensor information in real-time to ground stations or other platforms. The contract's focus on 'support and sustainment' implies that the goal is to maintain, repair, and potentially upgrade these critical communication links to ensure they function reliably and meet operational requirements. The effectiveness is directly tied to the U2's ability to perform its reconnaissance missions, providing actionable intelligence. The long duration and significant funding suggest a high expectation of continued operational effectiveness and reliability for these systems.

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

Federal spending on engineering services for intelligence, surveillance, and reconnaissance (ISR) platforms has generally seen a steady increase over the past five years, driven by evolving geopolitical landscapes and the need for advanced situational awareness. Agencies like the Department of Defense and intelligence community consistently invest in maintaining and upgrading these critical assets. This includes funding for system sustainment, technology insertion, cybersecurity enhancements, and platform modernization. While specific figures fluctuate annually based on budget allocations and program priorities, the overall trend indicates a sustained and significant commitment to ISR capabilities, reflecting their importance in modern military and national security operations. Contracts like the one for U2 data links are representative of this ongoing investment.

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: $24,929,579

Exercised Options: $24,929,579

Current Obligation: $23,929,579

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $412,970

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