DoD's $45.6M contract for aircraft parts awarded to L3Harris Technologies raises questions about competition and value

Contract Overview

Contract Amount: $45,638,757 ($45.6M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2017-01-20

End Date: 2019-06-30

Contract Duration: 891 days

Daily Burn Rate: $51.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF ACAT III BIG SAFARI PDM/MITD RJ16 O&A

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $45.6 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IGF::OT::IGF ACAT III BIG SAFARI PDM/MITD RJ16 O&A Key points: 1. The contract's value of $45.6M appears significant for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. 2. Awarded as 'NOT COMPETED', this raises concerns about potential overpricing and lack of market validation. 3. The duration of 891 days suggests a substantial, ongoing need for these aircraft parts. 4. The contract was awarded to L3Harris Technologies, a major defense contractor, indicating a focus on established players. 5. The lack of competition limits the government's ability to secure the best possible pricing and terms. 6. Performance context is limited without specific details on the aircraft or parts involved. 7. The contract's sector positioning is within Defense, specifically supporting aircraft maintenance and operations.

Value Assessment

Rating: questionable

Benchmarking the value of this $45.6M contract is challenging without specific details on the aircraft parts procured. However, given the 'NOT COMPETED' award status, there is a heightened risk that the pricing may not reflect competitive market rates. The absence of multiple bids prevents a direct comparison to similar contracts or market benchmarks, making it difficult to definitively assess value for money. Further analysis would be needed to understand the specific nature of the parts and their criticality to determine if the price is justified.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT COMPETED' (sole-source) procurement strategy. This means that the Department of Defense did not solicit bids from multiple potential suppliers. While sole-source awards can be justified in specific circumstances, such as when only one supplier possesses the required technology or capability, it significantly reduces the potential for price discovery through competition. The lack of a competitive bidding process means taxpayers may not be receiving the most cost-effective solution.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from the cost savings that typically arise from a competitive bidding process. This could result in a higher overall expenditure for the required aircraft parts.

Public Impact

The primary beneficiaries are likely the Department of Defense, ensuring the continued operation and maintenance of its aircraft fleet. The services delivered involve the provision of 'Other Aircraft Parts and Auxiliary Equipment', crucial for aviation readiness. The geographic impact is centered around the Department of Defense's operational bases and maintenance facilities, primarily in Texas where the contractor is located. Workforce implications include support for jobs at L3Harris Technologies and potentially its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Limited transparency into the justification for a sole-source award.
Potential for reduced innovation due to absence of market pressure.
Dependence on a single contractor for critical aircraft components.

Positive Signals

Award to an established defense contractor (L3Harris Technologies) suggests a degree of reliability and experience.
The contract supports critical Department of Defense aviation assets.
The fixed-price contract type provides some cost certainty for the government.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a critical component of the broader aerospace and defense industry. This contract falls within the Defense sector, specifically supporting the sustainment and operational readiness of military aircraft. The market for such parts is often characterized by specialized manufacturing capabilities and long-standing relationships with government agencies. Comparable spending benchmarks are difficult to establish without knowing the specific parts, but significant contracts in this area often run into tens or hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the award to a large prime contractor like L3Harris Technologies suggests that subcontracting opportunities for small businesses may exist, but these are not explicitly detailed in the provided data. The impact on the small business ecosystem is therefore indirect and dependent on L3Harris's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the contract terms, particularly the firm fixed-price structure. Transparency is limited due to the sole-source nature of the award, making it difficult for the public to scrutinize the procurement process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency Contracts
Aerospace Manufacturing Support
Military Aircraft Maintenance
Department of Defense Supply Chain

Risk Flags

Sole-source award raises concerns about price and competition.
Lack of detailed justification for 'NOT COMPETED' status.
Potential for overpayment due to absence of competitive bidding.
Dependency on a single contractor for critical parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.6 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. IGF::OT::IGF ACAT III BIG SAFARI PDM/MITD RJ16 O&A

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $45.6 million.

What is the period of performance?

Start: 2017-01-20. End: 2019-06-30.

What specific aircraft systems or platforms does this contract support?

The provided data indicates the contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) and was awarded to L3Harris Technologies. However, it does not specify the particular aircraft systems or platforms these parts are intended for. This information is crucial for understanding the criticality of the components, the potential impact of supply chain disruptions, and for benchmarking the contract's value against similar procurements for specific platforms like fighter jets, transport aircraft, or helicopters. Without this context, the $45.6 million expenditure remains abstract.

What was the justification for awarding this contract on a sole-source basis?

The contract was awarded as 'NOT COMPETED', signifying a sole-source procurement. The specific justification for this approach is not detailed in the provided data. Typically, sole-source awards require a formal justification, such as the unavailability of other sources, a critical need that cannot be met through competition, or a follow-on contract where only the original source can provide the necessary parts or services due to proprietary technology or integration requirements. Understanding this justification is key to assessing whether the lack of competition was warranted or if it potentially led to a less favorable outcome for the government.

How does the pricing of these aircraft parts compare to market rates or similar government contracts?

Direct comparison of pricing is not feasible with the current data, primarily because the contract was awarded on a sole-source basis ('NOT COMPETED'). This means there were no competing bids to establish a market-driven price. To assess value for money, one would need to identify comparable parts procured through competitive means, analyze the unit costs, and factor in any differences in specifications, quantities, or delivery schedules. The absence of competitive benchmarking raises concerns about whether the government secured the best possible price for these aircraft parts.

What is L3Harris Technologies' track record with similar sole-source contracts for aircraft parts?

L3Harris Technologies is a major defense contractor with extensive experience in aerospace and defense manufacturing. While the provided data does not detail their specific track record with sole-source contracts for aircraft parts, their established presence suggests they have likely been awarded such contracts previously, often justified by specialized capabilities or existing platform support. A deeper dive into historical contract awards and performance reviews for L3Harris would be necessary to fully assess their performance and pricing history in similar sole-source scenarios.

What are the potential risks associated with a sole-source award for critical aircraft components?

Sole-source awards for critical aircraft components carry several risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive process, increasing costs for the government. Secondly, it creates a dependency on a single supplier, which can be problematic if that supplier experiences production issues, financial difficulties, or decides to discontinue the product line. This dependency can also limit the government's leverage in negotiating future contracts or addressing performance issues. Finally, it may stifle innovation as there is less pressure on the sole provider to improve products or processes.

How has historical spending on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the DoD trended?

Historical spending data for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) by the Department of Defense (DoD) would require access to broader federal procurement databases. Generally, spending in this category fluctuates based on military readiness requirements, fleet modernization programs, and depot maintenance schedules. Significant events, such as conflicts or the introduction of new aircraft platforms, can drive increased demand. Analyzing trends over several fiscal years would reveal patterns of demand and identify periods of higher or lower investment in aircraft parts.

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

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, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $45,704,189

Exercised Options: $45,704,189

Current Obligation: $45,638,757

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline