Department of Defense awards $46.9M contract for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $46,942,205 ($46.9M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2017-08-15

End Date: 2019-12-03

Contract Duration: 840 days

Daily Burn Rate: $55.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF ACAT III BIG SAFARI

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $46.9 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IGF::CT::IGF ACAT III BIG SAFARI Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract's duration and fixed-price nature suggest a need for clear performance metrics. 3. Lack of competition may indicate a specialized need or a potential market concentration. 4. Performance context is limited due to the 'Other Aircraft Parts' classification. 5. The contract's value is moderate within the broader defense procurement landscape. 6. Oversight is crucial given the sole-source award to ensure fair pricing and delivery.

Value Assessment

Rating: fair

Benchmarking the value of this $46.9 million contract is challenging without specific details on the 'Other Aircraft Parts' procured. However, the absence of competition suggests that the government may not have achieved the most favorable pricing. Comparing this to similar sole-source awards for specialized aircraft components would be necessary for a more precise value assessment. The firm-fixed-price structure provides some cost certainty, but the overall value proposition hinges on the necessity and criticality of these specific parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P., was solicited. This approach bypasses the competitive bidding process, which typically involves multiple vendors vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they limit the government's ability to leverage market competition to drive down prices and ensure the best value.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without multiple bids, there's less assurance that the price reflects the lowest achievable cost for the required aircraft parts.

Public Impact

The primary beneficiaries are likely the Department of the Air Force and potentially aircrews relying on the functionality of these aircraft parts. The contract delivers essential components for aircraft maintenance and operation, ensuring fleet readiness. The geographic impact is primarily within Texas, where the contractor is located. Workforce implications are concentrated at L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially leading to higher costs for taxpayers.
Lack of transparency in the justification for a sole-source award.
Limited public information on the specific nature of the 'Other Aircraft Parts' procured.
Potential for vendor lock-in due to specialized nature of components.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract awarded to a known entity, L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P., suggesting a potentially established relationship or capability.
Contract duration of 840 days indicates a sustained need for these parts.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government investment. This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category, a segment that supports the broader defense industrial base. Spending in this area is critical for maintaining military readiness and technological superiority. Comparable spending benchmarks would typically involve analyzing other contracts for similar specialized aircraft components, often awarded through competitive processes to ensure value.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'sb': false. There is also no explicit mention of subcontracting plans for small businesses. Consequently, the direct impact on the small business ecosystem from this specific award is likely minimal. However, the prime contractor, L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P., may engage small businesses as suppliers, though this is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Given the sole-source nature, enhanced scrutiny from the Inspector General's office might be warranted to ensure the justification for the award was sound and that pricing is reasonable. Transparency is limited by the lack of a competitive process, making public oversight more challenging.

Related Government Programs

Defense Logistics Agency (DLA) procurement of aircraft parts
Air Force sustainment and maintenance contracts
Aircraft component manufacturing contracts
Sole-source defense procurements

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency regarding specific parts and platforms supported.
Risk of supply chain disruption for specialized components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.9 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. IGF::CT::IGF ACAT III BIG SAFARI

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 $46.9 million.

What is the period of performance?

Start: 2017-08-15. End: 2019-12-03.

What specific aircraft systems or platforms does this contract support, and why was a sole-source award deemed necessary?

The provided data classifies this contract under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' and specifies the awardee as L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for the Department of the Air Force. However, the specific aircraft systems or platforms are not detailed. A sole-source award is typically justified when only one responsible source can provide the required supplies or services, such as when the parts are proprietary, highly specialized, or critical for immediate operational needs where competition would cause unacceptable delays or costs. Without further documentation or justification from the agency, the precise reasons for the sole-source award remain unclear, but it suggests a unique capability or an urgent requirement that could not be met through a competitive process.

How does the $46.9 million contract value compare to historical spending on similar aircraft parts by the Department of Defense?

Comparing the $46.9 million contract value to historical spending on similar aircraft parts requires access to detailed historical procurement data, which is not fully provided here. The classification 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' is broad, encompassing a wide range of components. To make a meaningful comparison, one would need to identify contracts for identical or highly comparable parts, analyze their values, and consider factors like inflation, quantity, and contract duration. Given this is a sole-source award, it is possible that the price may be higher than what could be achieved through competition. A thorough analysis would involve querying databases like FPDS-NG for similar sole-source or competitively awarded contracts within the same NAICS code and product service code (if available) over several fiscal years.

What are the key performance indicators (KPIs) and delivery schedules associated with this contract, and how are they monitored?

The provided data indicates a contract duration of 840 days (approximately 2.3 years) and a delivery order award type. However, specific Key Performance Indicators (KPIs) and detailed delivery schedules are not included in this summary. For a firm-fixed-price contract of this nature, KPIs would typically focus on on-time delivery, quality of parts (e.g., defect rates, adherence to specifications), and potentially responsiveness to urgent requests. Monitoring would be conducted by the Air Force's contracting officer's representative (COR) or a designated technical point of contact, who would track deliveries against the schedule, inspect received parts for compliance, and manage any issues that arise. The firm-fixed-price nature implies that the contractor bears the risk of cost overruns if they fail to meet performance targets efficiently.

What is L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.'s track record with the Department of Defense, particularly in sole-source procurements?

L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. is a significant defense contractor with a substantial history of awards from the Department of Defense. While this specific data point does not detail their entire track record, their presence as a large prime contractor suggests extensive experience. Analyzing their past performance, especially in sole-source procurements, would involve reviewing contract databases for previous awards, their values, performance ratings (if available), and any instances of contract disputes or overruns. A history of successful, on-time, and within-budget sole-source awards would indicate reliability, whereas a pattern of issues might raise concerns about the justification and execution of future sole-source contracts.

Are there any identified risks associated with this contract, such as supply chain vulnerabilities or obsolescence of the parts being procured?

Given the 'Other Aircraft Parts' classification and the sole-source nature, potential risks include supply chain vulnerabilities if L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. relies on a limited number of sub-tier suppliers, or if those suppliers are located in high-risk regions. Obsolescence is also a risk in the aerospace sector; if the parts are for older platforms, ensuring their continued availability and supportability could be challenging. The sole-source award itself presents a risk of reduced competition leading to higher prices and potentially less incentive for the contractor to innovate or maintain the highest quality standards. The duration of the contract (840 days) also implies a need for long-term availability planning.

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: 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: $47,424,990

Exercised Options: $47,424,990

Current Obligation: $46,942,205

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