DoD's $23.8M BIG SAFARI contract awarded to L3Harris for aircraft parts shows limited competition

Contract Overview

Contract Amount: $23,830,816 ($23.8M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2016-12-23

End Date: 2020-12-31

Contract Duration: 1,469 days

Daily Burn Rate: $16.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACAT III BIG SAFARI GROUP B EQUIPMENT

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $23.8 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: ACAT III BIG SAFARI GROUP B EQUIPMENT Key points: 1. The contract's value of $23.8 million appears reasonable for specialized aircraft components, but a lack of competitive bidding raises concerns about optimal pricing. 2. Awarded on a sole-source basis, the contract bypasses the potential for price reductions and innovation that typically arise from a competitive bidding process. 3. The duration of the contract (over 3 years) suggests a need for sustained supply, but the absence of competition limits transparency on ongoing value. 4. Performance context is limited due to the sole-source nature, making it difficult to benchmark against alternative solutions or assess contractor efficiency. 5. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a niche area where specialized capabilities are often required. 6. The lack of small business involvement (set to false) indicates that opportunities for smaller enterprises in this specialized supply chain were not prioritized.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized 'BIG SAFARI GROUP B EQUIPMENT' designation. Without competitive bids, it's difficult to ascertain if the $23.8 million represents optimal market pricing. However, the firm fixed-price structure provides some cost certainty for the government. Comparisons to similar sole-source awards for highly specialized aerospace components would be necessary for a more robust value assessment.

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 standard competitive procurement process, which typically involves multiple bidders vying for the contract. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs than if the contract had been competed.

Taxpayer Impact: Taxpayers may have paid a premium for this equipment due to the absence of competitive pressure to drive down prices. The government did not benefit from the potential cost savings and innovation that a multi-bidder scenario could have generated.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives critical aircraft parts, and L3Harris Technologies Integrated Systems L.P., the sole contractor. The services delivered involve the provision of 'BIG SAFARI GROUP B EQUIPMENT,' which are specialized components for aircraft, likely supporting operational readiness and maintenance. The geographic impact is primarily within Texas, where the contractor is located, but the ultimate operational impact is on Air Force assets wherever they are deployed. Workforce implications include job creation and maintenance at L3Harris's facilities in Texas, supporting specialized manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Lack of transparency in the procurement process due to no open competition.
Potential for higher costs compared to a competed contract for similar equipment.
No explicit small business set-aside, potentially limiting opportunities for smaller firms.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established contractor (L3Harris) suggests potential for reliable delivery of specialized equipment.
Contract duration indicates a sustained need for the equipment, supporting long-term readiness.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This is a highly specialized segment of the industry often characterized by complex engineering, stringent quality requirements, and a limited number of qualified suppliers. The market size for such niche components can be substantial within the broader defense budget, but individual contracts may be limited to a few key players. Comparable spending benchmarks would likely involve other sole-source or limited-competition awards for advanced aerospace systems or components.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by the 'sb' field being false. Furthermore, the 'ss' field is also false, suggesting no specific small business subcontracting goals were mandated. This means that opportunities for small businesses to participate in this contract, either as prime contractors or subcontractors, were not actively pursued or prioritized through this specific award mechanism. The impact on the small business ecosystem is therefore minimal for this particular contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight structures. As a sole-source award, the justification for not competing would be subject to review. Accountability measures are inherent in the firm fixed-price contract type, requiring delivery of specified goods. Transparency is limited due to the non-competitive nature; however, contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts and Auxiliary Equipment
Defense Logistics Agency (DLA) Procurement
Air Force Materiel Command (AFMC) Contracts
Specialized Defense Equipment Procurement
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Limited transparency
Potential for higher cost

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.8 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. ACAT III BIG SAFARI GROUP B EQUIPMENT

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 $23.8 million.

What is the period of performance?

Start: 2016-12-23. End: 2020-12-31.

What is the specific nature of the 'BIG SAFARI GROUP B EQUIPMENT' and why was it deemed suitable for a sole-source award?

The 'BIG SAFARI GROUP B EQUIPMENT' refers to a specific category of specialized equipment under the Air Force's Big Safari program, which focuses on rapid acquisition of highly specialized, often classified, intelligence, surveillance, and reconnaissance (ISR) or electronic warfare capabilities. The exact nature of 'Group B' is not publicly detailed due to its sensitive operational context. Sole-source awards for such programs are typically justified by unique technical requirements, proprietary technology, urgent operational needs, or a lack of existing market competition for highly specialized, cutting-edge systems. The justification for this specific award would likely cite one or more of these factors, indicating that L3Harris possessed the sole capability or technology required by the Air Force at the time of the award.

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

The firm fixed-price (FFP) contract type is beneficial for the government, especially in sole-source situations, as it shifts the majority of the cost risk to the contractor, L3Harris Technologies. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides budget certainty for the Department of the Air Force, as they know the maximum amount they will pay. While it doesn't address the potential for overpayment due to lack of competition, it ensures that the government pays a predetermined price for the specified equipment, regardless of the contractor's actual costs incurred in producing or delivering it. This structure incentivizes the contractor to manage its own costs efficiently to maximize profit.

What are the potential long-term implications of relying on sole-source contracts for specialized defense equipment like this?

Sole-source contracts, while sometimes necessary for unique capabilities, can have several long-term implications. They can stifle innovation by reducing the incentive for multiple companies to develop competing technologies or alternative solutions. Over time, this can lead to a dependency on a single supplier, potentially increasing prices and reducing flexibility. It may also discourage new entrants into the market, limiting the government's options in the future. For the Department of Defense, a sustained reliance on sole-source awards could lead to higher overall acquisition costs and a less resilient supply chain, making it more vulnerable to disruptions or price escalations from the sole provider.

Can the value of this $23.8 million contract be benchmarked against other similar sole-source awards for aircraft parts?

Benchmarking this $23.8 million contract against similar sole-source awards for specialized aircraft parts is challenging without access to detailed, comparable contract data. The 'BIG SAFARI GROUP B EQUIPMENT' designation suggests a high degree of specialization, potentially involving proprietary technology or unique integration requirements that differentiate it from standard aircraft components. To perform a robust benchmark, one would need to identify other sole-source contracts awarded for similarly complex, mission-critical systems within the defense aerospace sector, considering factors like technology maturity, production volume, and the specific capabilities delivered. Publicly available data often lacks the granularity to make precise comparisons, especially for classified or highly specialized equipment.

What is the historical spending pattern for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' by the Department of the Air Force?

Historical spending patterns for the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category by the Department of the Air Force can be complex due to the diverse nature of the sector. This category encompasses a wide range of components, from simple fasteners to highly sophisticated electronic or structural parts for various aircraft platforms. Spending in this area is typically driven by aircraft sustainment, modernization programs, and new platform acquisitions. The Air Force's overall budget allocation for aircraft maintenance, repair, and overhaul (MRO) significantly influences spending in this sector. Analyzing historical data would reveal fluctuations tied to specific fleet readiness needs, major upgrade initiatives, or the introduction of new aircraft types, with a portion of this spending often going to sole-source or limited-competition contracts for unique or proprietary parts.

Industry Classification

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

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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 (UEI: 004203337)

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: $23,830,816

Exercised Options: $23,830,816

Current Obligation: $23,830,816

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $14,723,727

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline