DoD awards $73.4M for ISR modification, with L3Harris Technologies securing the sole-source contract

Contract Overview

Contract Amount: $73,428,351 ($73.4M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2014-08-22

End Date: 2019-08-28

Contract Duration: 1,832 days

Daily Burn Rate: $40.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ISR MODIFICATION/INTEGRATION OF TWO (2) KING AIR 350ER

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $73.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: ISR MODIFICATION/INTEGRATION OF TWO (2) KING AIR 350ER Key points: 1. Contract awarded to L3Harris Technologies for modification and integration of two King Air 350ER aircraft. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. Performance period spans over 1800 days, indicating a long-term commitment for aircraft modification. 4. The firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns. 5. This award falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code. 6. The contract was awarded to a single source, limiting competitive pressure on pricing.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without competitive data. The total award of $73.4 million for modifying two aircraft suggests a significant investment per platform. Without comparable sole-source awards or open market pricing, it's difficult to definitively assess if the price represents excellent value. However, the firm-fixed-price structure shifts cost risk to the contractor, which can be a positive indicator if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential bidders. This approach is typically used when only one source is capable of meeting the government's needs, or for specific reasons of urgency or national security. The lack of competition means that the government did not benefit from the price reductions and innovation that typically arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government had less leverage to negotiate the lowest possible price.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive enhanced ISR capabilities. The services delivered include the modification and integration of intelligence, surveillance, and reconnaissance systems onto two King Air 350ER aircraft. The geographic impact is primarily within the United States, where the modifications will likely take place. Workforce implications may include specialized technical roles for engineers and technicians involved in aircraft modification and systems integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Long performance period could introduce risks related to technological obsolescence or changing requirements.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Award to an established company (L3Harris Technologies) may indicate confidence in their capabilities for this specialized modification.

Sector Analysis

The aerospace and defense sector is characterized by complex, high-value contracts for specialized aircraft and systems. This contract for ISR modification fits within the broader market for aircraft modification and upgrade services, which is a significant segment of the defense industry. Comparable spending benchmarks would typically involve other sole-source or competed contracts for similar aircraft modifications or intelligence system integration.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of aircraft modification and ISR integration, it is unlikely that significant subcontracting opportunities would be directed towards small businesses unless specifically mandated. The primary contractor, L3Harris Technologies, is a large defense contractor, suggesting a focus on prime contract performance rather than small business ecosystem development for this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for delivering the specified modifications within the agreed price. Transparency regarding the justification for the sole-source award and the specific technical details of the modifications would be key areas for oversight.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Platforms
Aircraft Modification and Modernization Programs
Special Operations Forces Support Aircraft
Airborne Sensor Integration Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Long performance period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. ISR MODIFICATION/INTEGRATION OF TWO (2) KING AIR 350ER

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 $73.4 million.

What is the period of performance?

Start: 2014-08-22. End: 2019-08-28.

What is the specific justification for awarding this contract on a sole-source basis to L3Harris Technologies?

The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source, urgent and compelling needs, or specific national security requirements. Without further documentation, it is presumed that the Department of the Air Force determined that L3Harris Technologies was the only entity capable of meeting the unique requirements for the modification and integration of ISR systems onto the King Air 350ER aircraft within the required timeframe and specifications. Further investigation into the contract's justification documentation would be necessary for a definitive answer.

How does the cost of modifying these two King Air 350ER aircraft compare to similar ISR platform modifications?

Direct comparison of the $73.4 million award for modifying two King Air 350ER aircraft is difficult without access to specific details of the modifications and comparable contract data. The cost per aircraft is approximately $36.7 million. This figure needs to be contextualized by the complexity of the ISR systems being integrated, the extent of structural modifications, and the specific avionics and sensor suites. Sole-source awards, by their nature, lack competitive benchmarks, making it harder to ascertain if this price is market-competitive. Researching publicly available data on other ISR platform modifications, particularly those involving similar aircraft types or sensor payloads, would be necessary for a more robust comparison.

What are the potential risks associated with the long performance period of over 1800 days for this contract?

A performance period exceeding 1800 days (approximately five years) for aircraft modification and integration presents several potential risks. Technological obsolescence is a significant concern; the ISR systems or aircraft components integrated at the beginning of the period may be outdated by the end. Changing operational requirements within the Air Force could also necessitate modifications to the original scope, potentially leading to contract changes and cost adjustments. Furthermore, the extended duration increases the risk of contractor performance issues, supply chain disruptions, or economic fluctuations that could impact the project's successful completion within the original budget and timeline. Robust contract management and flexibility in addressing evolving needs are crucial to mitigate these risks.

What is L3Harris Technologies' track record with similar ISR modification contracts for the Department of Defense?

L3Harris Technologies is a well-established defense contractor with extensive experience in intelligence, surveillance, and reconnaissance (ISR) systems, avionics, and aircraft modification. They have a history of delivering complex solutions for various military platforms. While specific details of their past King Air 350ER modification contracts are not provided here, their broad capabilities suggest a strong track record in areas such as sensor integration, electronic warfare systems, and communication upgrades for military aircraft. Their experience likely positions them as a capable provider for this type of specialized work, which underpins the rationale for a sole-source award.

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

In a sole-source scenario, a firm-fixed-price (FFP) contract offers a significant benefit to the government by transferring the majority of the cost risk to the contractor, L3Harris Technologies. This means that the contractor is obligated to complete the work for the agreed-upon price, regardless of any cost overruns they may encounter during the modification and integration process. This provides budget certainty for the Department of the Air Force. While the initial price might be higher in a sole-source FFP contract compared to a negotiated price in a competitive environment, it protects the government from unexpected cost increases, making financial planning more predictable.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

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, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $75,767,318

Exercised Options: $75,767,318

Current Obligation: $73,428,351

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $40,300

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline