DoD's $35M Project Liberty aircraft purchase for L3Harris Technologies shows fair competition and potential value concerns

Contract Overview

Contract Amount: $34,982,911 ($35.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2008-08-15

End Date: 2008-11-30

Contract Duration: 107 days

Daily Burn Rate: $326.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROJECT LIBERTY PURCHASE OF 7 AIRCRAFT

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $35.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: PROJECT LIBERTY PURCHASE OF 7 AIRCRAFT Key points: 1. The contract was awarded under full and open competition, indicating a competitive bidding process. 2. The fixed-price contract type suggests a defined scope and cost control by the government. 3. The relatively short duration of 107 days may limit opportunities for significant cost overruns but also for performance optimization. 4. The purchase of 7 aircraft suggests a specific, potentially urgent, operational need. 5. The contract's value of $35 million for 7 aircraft warrants a closer look at per-unit cost benchmarks. 6. The exclusion of sources clause in the competition type warrants further investigation into the rationale.

Value Assessment

Rating: fair

The total contract value of $35 million for 7 aircraft equates to approximately $5 million per aircraft. Benchmarking this against similar military aircraft procurements is crucial. Without specific details on the aircraft type and its capabilities, a definitive value assessment is difficult. However, the fixed-price nature provides some cost certainty. The relatively small number of aircraft and short duration might indicate a specialized or urgent need, which could influence pricing.

Cost Per Unit: Approximately $5 million per aircraft. Further benchmarking against comparable military aircraft acquisitions is needed for a precise assessment.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This suggests that while the competition was initially open, certain sources were excluded from bidding. The specific reasons for this exclusion are critical to understanding the true level of competition. If the exclusion was justified and did not unduly limit the bidder pool, it could still represent a competitive outcome. However, it warrants scrutiny to ensure no viable bidders were unfairly prevented from participating.

Taxpayer Impact: The 'exclusion of sources' aspect requires careful review to ensure taxpayers received the best possible price through a genuinely competitive process. If the exclusion was arbitrary, it could have led to a higher price than a truly open competition might have yielded.

Public Impact

The primary beneficiaries are likely elements within the Department of Defense requiring specialized aircraft capabilities. The services delivered include the acquisition of 7 new aircraft, contributing to the Air Force's operational fleet. The geographic impact is primarily within Texas, where L3Harris Technologies is located, suggesting potential local economic benefits. Workforce implications may include employment opportunities at L3Harris Technologies and its subcontractors involved in aircraft manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition type needs clarification to ensure fair market access and optimal pricing.
The per-unit cost of approximately $5 million requires validation against industry benchmarks for similar aircraft.
The short contract duration might indicate a rushed procurement, potentially impacting thoroughness or long-term value.
Lack of specific aircraft details in the provided data hinders a comprehensive performance and value assessment.

Positive Signals

The contract was awarded under full and open competition, suggesting a structured procurement process.
The firm fixed-price contract type offers cost predictability for the government.
The award to L3Harris Technologies, a known defense contractor, suggests a level of established capability.
The purchase directly addresses a specific number of aircraft, indicating a clear requirement fulfillment.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical component of the broader aerospace and defense industry. The aerospace and defense market is characterized by high technological barriers, significant R&D investment, and often, government-driven demand. Spending in this sector is substantial, with major players competing for large-scale defense contracts. This specific purchase of 7 aircraft, valued at $35 million, represents a mid-sized procurement within the context of major defense acquisitions, likely fulfilling a specialized operational niche.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the procurement was not specifically targeted to encourage small business involvement. Consequently, the primary contractor, L3Harris Technologies, is likely a large business. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to leverage the small business industrial base.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The firm fixed-price nature provides some inherent cost control. Transparency regarding the 'exclusion of sources' would be key for public accountability. Inspector General investigations could be initiated if any impropriety or fraud is suspected. The contract's short duration may limit the scope for ongoing performance oversight.

Related Government Programs

Military Aircraft Procurement
Aerospace Manufacturing Contracts
Department of Defense Acquisition Programs
Air Force Fleet Modernization

Risk Flags

Exclusion of Sources Justification
Per-Unit Cost Benchmarking
Aircraft Specification Clarity
Long-Term Sustainment Plan

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. PROJECT LIBERTY PURCHASE OF 7 AIRCRAFT

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 $35.0 million.

What is the period of performance?

Start: 2008-08-15. End: 2008-11-30.

What specific type of aircraft was purchased under Project Liberty, and what are its intended operational roles?

The provided data does not specify the exact type of aircraft procured under Project Liberty. However, the contract value of $35 million for 7 aircraft suggests a specialized or non-standard platform, potentially a modification of an existing airframe or a niche surveillance/support aircraft, rather than a frontline fighter jet. The intended operational roles would be dictated by the aircraft's specifications, but given the Department of Defense context, likely involve intelligence, surveillance, reconnaissance (ISR), electronic warfare, or specialized transport missions. Further details from the contract's statement of work or associated documentation would be necessary to confirm the aircraft type and its specific mission.

What were the specific reasons for excluding certain sources from the bidding process for this contract?

The data indicates the contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This clause suggests that while the competition was intended to be open, specific potential bidders were deliberately excluded. The reasons for such exclusions typically relate to national security concerns, proprietary technology, unique capabilities required that only certain contractors possess, or prior performance issues. Without access to the justification documentation filed with the contract award, the precise rationale remains unknown. Understanding these reasons is crucial for assessing whether the exclusion limited competition unfairly and potentially inflated the price for taxpayers.

How does the per-unit cost of approximately $5 million compare to similar military aircraft acquisitions?

The per-unit cost of approximately $5 million for the 7 aircraft purchased under Project Liberty requires careful benchmarking. If these are small, specialized aircraft (e.g., unmanned aerial vehicles, light surveillance planes, or modified existing platforms), this price might be within market norms. However, if they are larger or more complex platforms, this cost could be significantly higher than comparable military procurements. For instance, larger transport or trainer aircraft can range from tens to hundreds of millions of dollars each. Without knowing the aircraft's specifications, size, capabilities, and intended role, a definitive comparison is challenging. A detailed analysis would involve comparing this cost against recent awards for aircraft with similar performance characteristics and mission profiles.

What is the track record of L3Harris Technologies in delivering similar aircraft manufacturing contracts to the Department of Defense?

L3Harris Technologies is a well-established defense contractor with a significant history of delivering complex systems and platforms to the Department of Defense. They have experience in various areas, including electronic warfare, communications, sensors, and integrated mission systems, which often involve aircraft integration and modification. While specific details on their track record for manufacturing entire aircraft platforms of this nature are not provided in the summary data, their overall presence and capabilities in the defense sector suggest a capacity to fulfill such contracts. Performance history on prior DoD contracts, including on-time delivery, cost adherence, and quality, would be detailed in government performance databases (e.g., CPARS) and would offer a more granular view of their reliability.

Given the short contract duration (107 days), what are the potential implications for program effectiveness and long-term value?

The short duration of 107 days for the Project Liberty aircraft purchase suggests a focus on rapid acquisition rather than long-term program development or sustainment. This could imply an urgent operational need that required swift fulfillment. For program effectiveness, it means the immediate need for the aircraft is likely met. However, such short timelines might limit opportunities for extensive testing, integration, or optimization, potentially impacting the aircraft's full potential or leading to unforeseen issues post-delivery. From a long-term value perspective, a rapid acquisition might not be as cost-effective as a more phased approach that allows for learning and refinement. It also raises questions about the sustainment and maintenance planning for these aircraft beyond the initial delivery period.

How does historical spending on aircraft manufacturing by the Department of the Air Force compare to this specific $35 million contract?

The Department of the Air Force, like other branches of the DoD, engages in substantial spending on aircraft manufacturing, encompassing everything from major fighter jet programs to specialized support and training aircraft. Annual spending in this category often runs into the tens or hundreds of billions of dollars, reflecting the high cost of modern military aviation. A $35 million contract for 7 aircraft, while significant in absolute terms, represents a relatively small fraction of the Air Force's total aircraft procurement budget. It likely falls into the category of acquiring specialized assets or fulfilling specific, targeted requirements rather than a large-scale fleet program. Historical spending patterns show a consistent demand for diverse aircraft types, driven by evolving threats and technological advancements.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 10001 JACK FINNEY BLVD FM, GREENVILLE, TX, 03

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership

Financial Breakdown

Contract Ceiling: $34,982,911

Exercised Options: $34,982,911

Current Obligation: $34,982,911

Timeline