DoD awards $8.75M engineering services contract to L3Harris Technologies for sustainment, with no competition

Contract Overview

Contract Amount: $8,753,294 ($8.8M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2025-03-01

End Date: 2026-02-28

Contract Duration: 364 days

Daily Burn Rate: $24.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IBS-CUS UCA FOR SUSTAINMENT SERVICES

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $8.8 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IBS-CUS UCA FOR SUSTAINMENT SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential overpayment and lack of market-driven pricing. 2. The firm-fixed-price structure aims to control costs, but the absence of competition limits price discovery. 3. Performance is in Texas, indicating a focus on domestic sustainment operations. 4. The contract duration of one year suggests a need for ongoing, potentially specialized, engineering support. 5. This award falls within the broader category of engineering services, a critical component of defense readiness. 6. The lack of small business set-aside raises questions about opportunities for smaller firms in this specific award.

Value Assessment

Rating: questionable

Benchmarking the value of this $8.75 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if L3Harris Technologies Integrated Systems L.P. provided the best possible price for the engineering services. The firm-fixed-price contract type offers some cost certainty, but the absence of competition means there's no direct comparison to market rates or other potential providers. Further analysis would require understanding the specific scope of sustainment services and comparing them to similar sole-source awards or internally developed cost estimates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The Department of the Air Force likely determined that L3Harris Technologies Integrated Systems L.P. was the only responsible source capable of meeting the government's requirements. This approach bypasses the standard competitive process, which typically involves soliciting bids from numerous companies to ensure the best value for the government. The lack of competition means taxpayers do not benefit from the price reductions and innovation that can arise from a robust bidding process.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the most cost-effective solution. Without multiple bids, the government has limited leverage to negotiate lower prices, potentially leading to higher overall spending for sustainment services.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which will receive critical sustainment engineering services. The services delivered are essential for maintaining the operational readiness and longevity of defense systems. The geographic impact is concentrated in Texas, where the contractor is located and likely where the services will be performed or managed. Workforce implications may include the employment of specialized engineers and technical staff by L3Harris Technologies to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition raises concerns about whether the government secured the best possible value.
Absence of small business set-aside may limit opportunities for smaller, specialized engineering firms.
The specific nature of 'sustainment services' requires further definition to fully assess value and necessity.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
L3Harris Technologies is an established defense contractor, suggesting a degree of reliability.
Awarding contract for sustainment services ensures continued operational readiness of critical assets.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a significant market for government contractors supporting defense and aerospace. The total addressable market for engineering services supporting the Department of Defense is substantial, encompassing design, development, testing, and sustainment. This specific award for sustainment services is crucial for maintaining the operational effectiveness of existing military assets, representing a segment of the broader defense industrial base. Comparable spending benchmarks for sustainment contracts can vary widely based on the complexity and scale of the systems being supported.

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. The award to a large prime contractor like L3Harris Technologies suggests that the primary focus was on capability and existing relationships rather than fostering small business participation for this specific procurement. This could mean missed opportunities for smaller, innovative firms to contribute to critical sustainment efforts and potentially limit their growth within the defense supply chain for this contract.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force, likely through contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency regarding the sole-source justification and performance metrics would be key areas for oversight. The Inspector General of the Department of Defense may have jurisdiction for audits and investigations if any issues of fraud, waste, or abuse arise.

Related Government Programs

Department of Defense Sustainment Contracts
Air Force Engineering Services
L3Harris Technologies Defense Contracts
Sole-Source Defense Procurements
Firm-Fixed-Price Engineering Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for uncompetitive pricing
Limited transparency on specific services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.8 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. IBS-CUS UCA FOR SUSTAINMENT SERVICES

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P..

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 $8.8 million.

What is the period of performance?

Start: 2025-03-01. End: 2026-02-28.

What specific sustainment services are being provided under this contract?

The provided data indicates the contract is for 'IBS-CUS UCA FOR SUSTAINMENT SERVICES.' While 'UCA' might refer to a specific system or program (e.g., Unmanned Combat Aircraft or a specific platform's upgrade/component), and 'IBS-CUS' could be an acronym for an Integrated Battlefield System or similar, the exact nature of the sustainment services is not detailed. Sustainment typically encompasses maintenance, repair, logistics support, system upgrades, and technical assistance to ensure an asset remains operational throughout its lifecycle. Without further clarification on the specific systems or components being sustained, it is difficult to precisely define the scope of work, the technical expertise required, and the potential risks associated with performance.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. This can occur due to unique capabilities, proprietary technology, urgent requirements where competition is not feasible, or when a specific contractor is the only source for essential sustainment services for a particular system. For this contract, the Department of the Air Force likely determined that L3Harris Technologies Integrated Systems L.P. possessed the specialized knowledge, technical data, or existing infrastructure necessary for the sustainment of the 'IBS-CUS UCA' system, making competition impractical or detrimental to mission readiness. A formal Justification for Other Than Full and Open Competition (JOFOC) would typically document these reasons.

How does the firm-fixed-price contract type mitigate risk for the government in this sole-source scenario?

The firm-fixed-price (FFP) contract type shifts the majority of cost risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This provides the government with cost certainty, as the total expenditure is known upfront. While this structure is beneficial for budget predictability, its effectiveness in ensuring value is diminished in a sole-source context. Without competition, the initial fixed price may not reflect the lowest achievable market rate. However, the FFP structure does protect the government from cost overruns if the contractor's expenses exceed their estimates.

What is the historical spending pattern for sustainment services related to the 'IBS-CUS UCA' system or similar systems?

The provided data does not include historical spending patterns for this specific contract or the 'IBS-CUS UCA' system. To assess historical spending, one would need to query federal procurement databases (like FPDS or USASpending) for previous contracts awarded to L3Harris Technologies or other entities for sustainment of this or comparable systems. Analyzing past contract values, durations, and competition levels would reveal trends in cost, identify potential cost growth over time, and highlight whether this $8.75 million award represents an increase, decrease, or stable level of investment. Understanding this context is crucial for evaluating the current award's value proposition.

What are the potential implications of awarding sustainment services to a single large contractor like L3Harris Technologies?

Awarding sustainment services to a single large contractor like L3Harris Technologies can offer benefits such as streamlined communication, consolidated expertise, and potentially economies of scale in managing complex support operations. However, it also carries risks. Over-reliance on a single provider can lead to vendor lock-in, reduced flexibility, and a diminished ability for the government to switch providers if performance or pricing becomes unsatisfactory. Furthermore, it can stifle innovation from smaller, more agile companies that might offer alternative solutions. The government must maintain strong oversight to ensure the contractor remains accountable and continues to provide high-quality services at a fair price, even without direct competitive pressure.

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: FA855525R0003

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 10001 JACK FINNEY BLVD, GREENVILLE, TX, 75402

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $9,463,072

Exercised Options: $9,463,072

Current Obligation: $8,753,294

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline