DoD's $28.3M contract for aircraft parts awarded to L3 Technologies, Inc. under a sole-source arrangement

Contract Overview

Contract Amount: $28,296,829 ($28.3M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-06-01

End Date: 2016-03-31

Contract Duration: 669 days

Daily Burn Rate: $42.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF BASE DOCUMENT FOR TRANSACTION 6 MODS

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $28.3 million to L3 TECHNOLOGIES, INC. for work described as: IGF::OT::IGF BASE DOCUMENT FOR TRANSACTION 6 MODS Key points: 1. The contract's value of $28.3 million represents a significant investment in aircraft parts manufacturing. 2. Awarded to a single vendor, L3 Technologies, Inc., this contract raises questions about competitive pricing and market alternatives. 3. The firm fixed-price structure shifts cost risk to the contractor, but the lack of competition may inflate the base price. 4. Performance duration of 669 days suggests a substantial, ongoing need for these specialized aircraft components. 5. The contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, indicating a niche but critical supply chain role. 6. The absence of small business participation is noted, with no set-aside or subcontracting requirements indicated.

Value Assessment

Rating: questionable

Benchmarking the value of this $28.3 million contract is challenging due to the sole-source nature of the award. Without competitive bids, it's difficult to ascertain if the price reflects fair market value or if it includes a premium due to limited options. The firm fixed-price contract type suggests that L3 Technologies, Inc. assumed the cost risk, which can sometimes justify a higher price. However, the lack of competition means there's no direct comparison to other suppliers for similar aircraft parts, making a definitive value-for-money assessment difficult. Further analysis would require access to cost breakdowns or historical pricing for comparable components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3 Technologies, Inc. was the only vendor considered. The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of adequate competition. In this case, the specific nature of 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' might lend itself to specialized suppliers. However, the absence of a competitive bidding process means taxpayers did not benefit from potential price reductions that could arise from multiple vendors vying for the contract.

Taxpayer Impact: The sole-source award limits the government's ability to leverage competition to secure the best possible price for these aircraft parts, potentially leading to higher costs for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense and its aviation operations, ensuring the availability of critical aircraft parts. The contract supports the maintenance and operational readiness of Air Force aircraft. The geographic impact is primarily centered around L3 Technologies, Inc.'s facilities, likely in Utah, and the DoD installations receiving the parts. Workforce implications include the employment of skilled labor in manufacturing and logistics at L3 Technologies, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits transparency in price negotiation.
No small business participation noted, potentially missing opportunities for economic inclusion.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Award to an established entity (L3 Technologies, Inc.) may indicate reliability and expertise in aircraft parts manufacturing.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a specialized segment within the broader aerospace and defense industry. This contract, valued at $28.3 million, represents a significant procurement within this niche. The market for such parts is often characterized by high technical requirements, stringent quality control, and long lead times. Comparable spending benchmarks are difficult to establish without more specific details on the parts themselves, but the DoD is a major consumer of such components, with annual spending in the aerospace manufacturing sector reaching billions.

Small Business Impact

This contract does not appear to have included any small business set-aside provisions, nor is there an indication of subcontracting goals for small businesses. The award to L3 Technologies, Inc., a large corporation, suggests that the primary focus was on meeting the specific requirements of the Department of the Air Force rather than fostering small business participation. This approach may limit opportunities for smaller firms to contribute to the defense supply chain and benefit from government contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. The firm fixed-price nature of the contract means that the primary accountability lies with L3 Technologies, Inc. to deliver the specified aircraft parts within the agreed-upon price and timeframe. Transparency is limited due to the sole-source award, but contract modifications, performance reports, and payment milestones would be subject to internal DoD review. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics and Sustainment
Aerospace Manufacturing Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award may indicate limited competition.
Lack of transparency in pricing due to sole-source nature.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.3 million to L3 TECHNOLOGIES, INC.. IGF::OT::IGF BASE DOCUMENT FOR TRANSACTION 6 MODS

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 $28.3 million.

What is the period of performance?

Start: 2014-06-01. End: 2016-03-31.

What is the specific nature of the 'Other Aircraft Parts and Auxiliary Equipment' being procured under this contract?

The provided data does not specify the exact nature of the 'Other Aircraft Parts and Auxiliary Equipment.' This category is broad and can encompass a wide range of components, from engine parts and avionics to structural elements and specialized systems. Without further details, it's challenging to assess the criticality or uniqueness of these parts. However, given the sole-source award and the contractor's specialization, it is likely that these are components requiring specific engineering, manufacturing processes, or certifications that are not readily available from multiple suppliers. Understanding the specific parts would allow for a more precise analysis of their impact on aircraft readiness and the potential for alternative sourcing.

What was the justification provided for awarding this contract on a sole-source basis to L3 Technologies, Inc.?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. The specific justification for this sole-source determination is not included in the abbreviated data. Typically, sole-source awards are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or when there is a compelling urgency that precludes full and open competition. For aircraft parts, justifications often relate to proprietary designs, unique manufacturing capabilities, or the need for parts that are no longer in production by multiple vendors. Without the official justification document, it is impossible to verify the validity of the sole-source claim and assess if competition was genuinely not feasible.

How does the $28.3 million contract value compare to historical spending on similar aircraft parts by the Department of Defense?

Comparing the $28.3 million contract value to historical spending on similar aircraft parts is difficult without more specific information about the components being procured. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code is broad. However, the Department of Defense is a massive consumer of aerospace components, with annual spending in this sector often in the tens of billions of dollars. A single contract of $28.3 million, while substantial, would represent a fraction of the overall DoD aerospace procurement budget. To provide a meaningful comparison, one would need to identify contracts for the same or highly similar parts, ideally awarded competitively, to establish a benchmark price range and assess if this sole-source award is within expected parameters.

What are the potential risks associated with a sole-source contract for critical aircraft parts?

Sole-source contracts for critical aircraft parts carry several potential risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most competitive bid. This can result in higher costs for the government and, consequently, taxpayers. Secondly, there's a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting flexibility and future sourcing options. Thirdly, without competitive oversight, there's a reduced incentive for the sole-source provider to innovate or improve efficiency, as they have a guaranteed contract. Finally, if the sole-source contractor experiences financial difficulties or production issues, it could severely disrupt the supply chain for critical aircraft components, impacting military readiness.

What is the track record of L3 Technologies, Inc. in fulfilling defense contracts, particularly for aircraft parts?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a long and extensive history of fulfilling defense contracts for the U.S. military, including those related to aircraft parts and systems. They are a major defense contractor known for providing a wide range of products and services, including avionics, sensors, communication systems, and electronic warfare equipment, many of which are integral to aircraft operations. While specific performance metrics for this particular $28.3 million contract are not detailed here, L3Harris generally has a substantial portfolio of government contracts. Assessing their track record would involve reviewing past performance evaluations, on-time delivery rates, and quality control metrics across their numerous defense engagements, which are typically available through government performance databases.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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, 84116

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,296,829

Exercised Options: $28,296,829

Current Obligation: $28,296,829

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $2,207,826

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline