Air Force awards $31.9M for U-2 data support, a sole-source contract to L3 Technologies

Contract Overview

Contract Amount: $31,927,366 ($31.9M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-10-24

End Date: 2026-04-23

Contract Duration: 546 days

Daily Burn Rate: $58.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: U-2 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 $31.9 million to L3 TECHNOLOGIES, INC. for work described as: U-2 DATA LINKS SUPPORT AND SUSTAINMENT Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Firm Fixed Price contract type suggests cost certainty for the government. 3. Duration of 546 days indicates a medium-term sustainment requirement. 4. Awarded by the Department of the Air Force, supporting critical intelligence, surveillance, and reconnaissance (ISR) capabilities. 5. The contract value is substantial, reflecting the complexity of supporting legacy aircraft systems. 6. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific technical requirements for U-2 data support. Without competitive bids, it's difficult to definitively assess if the $31.9 million represents optimal value for money. However, the firm fixed-price structure provides cost predictability. The duration of the contract (546 days) suggests a sustained need for these services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, L3 Technologies, Inc., was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when there is insufficient time to conduct a full competition. The lack of competition means that price discovery through market forces was not leveraged, potentially leading to higher costs than if multiple vendors had bid.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from competitive bidding processes. This can result in a higher overall expenditure for the government for the same services.

Public Impact

The primary beneficiaries are the U.S. Air Force and its intelligence, surveillance, and reconnaissance (ISR) operations, which rely on the U-2 aircraft for critical data. Services delivered include data support and sustainment for the U-2 platform, ensuring its operational readiness and effectiveness. The geographic impact is likely global, as U-2 operations support national security interests worldwide. Workforce implications may include specialized technical personnel required for data analysis and system sustainment, potentially at L3 Technologies or within the Air Force.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Potential for cost overruns if not closely managed due to lack of competition.
Reliance on a single contractor for critical U-2 data support could pose a risk if performance issues arise.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
L3 Technologies likely possesses specialized knowledge and experience with the U-2 system.
Contract duration allows for sustained support of a critical national asset.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting aerospace and defense platforms. The market for specialized sustainment and data support for legacy aircraft like the U-2 is often concentrated among a few experienced contractors. Spending in this niche is driven by national security requirements and the ongoing need to maintain aging but vital intelligence assets. Comparable spending benchmarks are difficult to establish due to the unique nature of U-2 operations and its limited operational lifespan.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this specific contract are limited. The prime contractor, L3 Technologies, Inc., is a large business, and the focus is on their direct provision of services. The impact on the small business ecosystem for this particular award is minimal.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the firm fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract awards databases, though detailed performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

U-2 Aircraft Sustainment Programs
Intelligence, Surveillance, and Reconnaissance (ISR) Systems Support
Aerospace Engineering Services Contracts
Defense Data Analysis and Processing Services

Risk Flags

Sole-source award
Potential for cost overruns
Reliance on single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.9 million to L3 TECHNOLOGIES, INC.. U-2 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 $31.9 million.

What is the period of performance?

Start: 2024-10-24. End: 2026-04-23.

What is L3 Technologies' track record with U-2 support or similar complex aerospace data systems?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a long history of supporting various defense platforms, including intelligence, surveillance, and reconnaissance (ISR) systems. Their expertise often encompasses complex data processing, system integration, and sustainment services. While specific details on their prior U-2 data support contracts are not provided in this data snippet, their established presence in the aerospace and defense sector suggests a significant level of experience. Assessing their track record would involve reviewing past performance evaluations, contract history with the Air Force and other agencies for similar services, and any documented successes or challenges in delivering complex data solutions for critical defense assets. Their ability to secure this sole-source award implies a perceived capability and necessity for their specialized services in maintaining the U-2's data functions.

How does the $31.9 million contract value compare to historical spending on U-2 data support?

Direct historical spending comparisons for this specific 'U-2 DATA LINKS SUPPORT AND SUSTAINMENT' contract are not readily available within the provided data. However, the $31.9 million award over approximately 1.5 years (546 days) suggests a significant annual expenditure for specialized data support. The U-2 is a long-standing platform, and its sustainment costs, particularly for advanced data links and processing, can be substantial. Without access to historical contract databases detailing similar sole-source or competed awards for U-2 data functions, a precise benchmark is difficult. Generally, sustainment for aging, high-tech military assets tends to increase over time as components become obsolete and specialized support becomes more critical and less common, potentially driving up costs.

What are the primary risks associated with this sole-source contract for U-2 data support?

The primary risk associated with this sole-source contract is the lack of competitive pressure, which can lead to suboptimal pricing and potentially less incentive for the contractor to innovate or achieve maximum efficiency. Taxpayers may be paying a premium compared to what could be achieved through a competitive bidding process. Another risk is contractor dependency; the Air Force is reliant on L3 Technologies for critical U-2 data functions, making them vulnerable to performance issues, price increases upon contract renewal, or potential disruptions if the contractor faces financial or operational difficulties. Ensuring robust oversight and clear performance metrics is crucial to mitigate these risks.

How effective is the U-2 platform in its current role, and how does this contract contribute to that effectiveness?

The U-2 'Dragon Lady' remains a vital platform for intelligence, surveillance, and reconnaissance (ISR) due to its unique high-altitude capabilities and sensor payload, allowing it to gather critical data in contested environments where other assets may not be able to operate. This contract, focusing on data links support and sustainment, directly contributes to the U-2's effectiveness by ensuring that the data collected by the aircraft can be reliably transmitted, processed, and utilized by decision-makers. Without effective data support, the valuable intelligence gathered by the U-2 would be inaccessible or delayed, diminishing its operational value. Therefore, this contract is essential for maintaining the U-2's mission readiness and its contribution to national security.

What is the typical contract structure for sustaining legacy intelligence platforms like the U-2?

Sustaining legacy intelligence platforms like the U-2 typically involves a mix of contract structures, often tailored to specific needs. This can include firm-fixed-price contracts for well-defined services like data link support and sustainment, as seen here, which provide cost certainty. However, contracts might also incorporate cost-plus elements for research and development or less defined sustainment tasks. Sole-source awards are common for highly specialized systems where only one or a few contractors possess the requisite knowledge, technology, or security clearances, as is often the case with aging ISR platforms. Long-term sustainment contracts, often spanning multiple years with options, are also typical to ensure continuous operational capability and manage the lifecycle of these critical assets.

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: FA852823R0011

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: $38,705,231

Exercised Options: $32,838,572

Current Obligation: $31,927,366

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