Air Force awards $11.5M for electronics and communication equipment development to L3 Technologies

Contract Overview

Contract Amount: $11,490,218 ($11.5M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-05-30

End Date: 2008-11-30

Contract Duration: 915 days

Daily Burn Rate: $12.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200608!000412!5700!FA8620!ASC/RAK !FA862006C3000 !A!N! !N! ! !20060530!20080829!008983355!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!640 N 2200 W !SALT LAKE CITY !UT!84116!67000!035!49!SALT LAKE CITY !SALT LAKE !UTAH !+000007759375!N!N!000017576679!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334290!E! !3! ! ! ! ! !99990909!B! ! !N!Z!D!U!J!1!001!N!6A!A!Y!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95119

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $11.5 million to L3 TECHNOLOGIES, INC. for work described as: 200608!000412!5700!FA8620!ASC/RAK !FA862006C3000 !A!N! !N! ! !20060530!20080829!008983355!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!640 N 2200 W !SALT LAKE CITY !UT!84116!67000!035!49!SALT LAKE CITY !SALT… Key points: 1. Contract awarded for research, development, testing, and evaluation (RDT&E) of electronics and communication equipment. 2. The contract was not competed, raising questions about potential cost savings and market competitiveness. 3. A firm-fixed-price contract type suggests clear scope and risk allocation. 4. The duration of the contract (915 days) indicates a medium-term project. 5. The awardee, L3 Technologies, is a significant defense contractor with a history in electronics. 6. The North American Industry Classification System (NAICS) code 334290 points to specialized manufacturing.

Value Assessment

Rating: fair

The contract value of $11.5 million for RDT&E of electronics and communication equipment appears within a reasonable range for specialized defense development. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or identify potential cost savings. The firm-fixed-price nature of the contract implies that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the scope is well-defined. Further analysis would require comparison with similar RDT&E contracts for electronics and communication systems.

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 potential bidders. This approach is typically used when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding environment. This can potentially lead to higher prices than might be achieved through full and open competition.

Taxpayer Impact: The absence of competition for this $11.5 million contract means taxpayers may not have received the best possible price. Without bids from multiple vendors, there's a risk that the awarded price is higher than it would have been in a competitive scenario.

Public Impact

The primary beneficiary of this contract is L3 Technologies, Inc., which will receive funding for its development work. The contract supports the development of advanced electronics and communication equipment for potential use by the Department of Defense. The geographic impact is primarily centered around L3 Technologies' facilities in Salt Lake City, Utah, and potentially other locations where development and testing occur. The contract will likely involve skilled labor in engineering, manufacturing, and research and development within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in a higher price for taxpayers.
Sole-source awards require strong justification to ensure necessity and prevent potential overpricing.
The specific nature of RDT&E can introduce inherent risks in achieving desired performance outcomes within budget.

Positive Signals

Firm-fixed-price contract type helps control costs and manage risk for the government.
Awardee, L3 Technologies, is an established defense contractor with relevant expertise.
Contract supports the development of potentially critical defense technologies.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on the manufacturing and development of electronics and communication equipment. The market for such specialized defense technologies is characterized by high barriers to entry, significant R&D investment, and a primary customer base in government agencies. Comparable spending benchmarks would involve looking at other RDT&E contracts for similar electronic systems within the Department of Defense, which can vary widely based on technological complexity and scope.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. As a sole-source award to a large corporation, it is unlikely that significant subcontracting opportunities for small businesses were mandated or explored as part of the initial award. The focus appears to be on the prime contractor's capabilities for this specific development effort.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight by the Department of Defense Inspector General. Transparency regarding the justification for the sole-source award and the progress of the RDT&E would be key accountability measures. The firm-fixed-price nature of the contract provides a degree of financial oversight by locking in the price.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Electronics and Communication Systems Procurement
Defense Advanced Research Projects Agency (DARPA) Projects
Tactical Communications Systems Development

Risk Flags

Sole-source award requires justification
Potential for higher cost due to lack of competition
RDT&E inherently carries technical and schedule risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.5 million to L3 TECHNOLOGIES, INC.. 200608!000412!5700!FA8620!ASC/RAK !FA862006C3000 !A!N! !N! ! !20060530!20080829!008983355!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!640 N 2200 W !SALT LAKE CITY !UT!84116!67000!035!49!SALT LAKE CITY !SALT LAKE !UTAH !+000007759375!N!N!000017576679!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !334290!E! !3! ! ! ! ! !999

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 $11.5 million.

What is the period of performance?

Start: 2006-05-30. End: 2008-11-30.

What is the specific nature of the electronics and communication equipment being developed under this contract?

The contract specifies 'RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV' and falls under NAICS code 334290, 'Other Communications Equipment Manufacturing.' While the exact nature of the equipment is not detailed in the provided data, it pertains to the research, development, engineering, manufacturing, and development of electronic and communication equipment. This could encompass a wide range of technologies, from advanced radio systems and signal processing hardware to specialized communication devices for military applications. The 'RDTE' designation strongly suggests a focus on innovation and the creation of new or significantly improved capabilities rather than the procurement of off-the-shelf items.

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

The provided data indicates the contract was 'NOT COMPETED' and is classified as 'sole-source.' Specific justifications for sole-source awards are typically documented in contract files and often relate to factors such as the urgency of the requirement, the unavailability of the product or service from any other source, or the existence of unique capabilities possessed by a single contractor. Without access to the contract's justification for other than full and open competition (JOFOC), it's impossible to state the precise reason. However, for RDT&E contracts, sole-source awards can sometimes be justified if a specific contractor has unique intellectual property, prior development experience, or critical expertise essential for the project's success.

How does the $11.5 million contract value compare to similar RDT&E efforts in electronics and communication equipment?

Benchmarking the $11.5 million value for this RDT&E contract requires comparison with similar efforts. RDT&E contracts can vary significantly in cost based on technological complexity, project duration, and the specific deliverables. For specialized defense electronics and communication systems, $11.5 million for a roughly two-year development effort (May 2006 - August 2008) is not exceptionally high, but it's also not insignificant. Without knowing the specific technological goals or the maturity level of the development, a precise comparison is difficult. However, it suggests a focused development effort rather than a large-scale system integration or production program. Further analysis would involve examining other Air Force or DoD contracts with similar NAICS codes and RDT&E objectives.

What is L3 Technologies' track record with the Department of Defense, particularly in electronics and communication RDT&E?

L3 Technologies, Inc. (and its predecessor/related entities) has a substantial track record as a contractor for the Department of Defense. The company has historically been involved in a wide array of defense programs, including aerospace systems, electronic warfare, communications, intelligence, surveillance, and reconnaissance (ISR) systems, and simulation and training. Their involvement in RDT&E for electronics and communication equipment is well-established, given their core business areas. The specific contract data shows this was one of many awards to L3, indicating a continuing relationship and demonstrated capability in delivering products and services to the DoD, including research and development efforts.

What are the potential risks associated with a firm-fixed-price contract for RDT&E?

While firm-fixed-price (FFP) contracts are generally favored for their cost control, they can present unique risks in RDT&E contexts. The primary risk is that the fixed price may not adequately account for unforeseen technical challenges inherent in research and development. If the contractor underestimates the complexity or encounters significant technical hurdles, they may incur losses. Conversely, if the scope is not precisely defined, the contractor might deliver less than the government ideally envisioned to stay within budget. For the government, the risk lies in potentially receiving a product that doesn't fully meet evolving requirements or in the contractor seeking change orders if the scope proves inadequate, which can increase costs. Effective scope definition and management are crucial for mitigating these risks.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 640 N 2200 W, SALT LAKE CITY, UT, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline