DoD's $46.5M 'BIG SAFARI' spares contract awarded to L3Harris without competition, raising value concerns

Contract Overview

Contract Amount: $46,504,119 ($46.5M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2016-12-15

End Date: 2020-03-01

Contract Duration: 1,172 days

Daily Burn Rate: $39.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACAT III BIG SAFARI FY17 GROUP B SPARES

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $46.5 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: ACAT III BIG SAFARI FY17 GROUP B SPARES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of nearly four years suggests a long-term need for these specialized parts. 3. Lack of competition is a significant risk indicator for potential overpayment. 4. The specific nature of 'BIG SAFARI' spares implies a niche requirement, possibly justifying limited competition. 5. Performance context is limited due to the lack of competitive bidding and publicly available performance metrics. 6. Sector positioning is within specialized aircraft parts manufacturing, a critical but often less competitive area.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized 'BIG SAFARI' spares. Without competitive bids, it's difficult to ascertain if the $46.5 million price reflects fair market value. The absence of comparable contracts in the public domain further complicates a direct value-for-money assessment. The fixed-price nature of the award offers some cost control, but the lack of competition remains a primary concern for ensuring optimal use of taxpayer funds.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' strategy, indicating that a full and open competition was not conducted. The specific reasons for this sole-source award are not detailed in the provided data, but it typically implies that only one responsible source was available or that the urgency of the requirement precluded competition. The lack of multiple bidders means there was no opportunity for price negotiation or comparison among different suppliers, which can lead to higher costs for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible prices, potentially resulting in higher expenditures for taxpayers. This approach bypasses the natural cost-discovery mechanisms inherent in competitive bidding processes.

Public Impact

The primary beneficiaries are likely the Department of the Air Force, ensuring operational readiness of specific aircraft platforms. Services delivered include the provision of specialized spare parts crucial for maintaining complex aviation systems. The geographic impact is primarily within the United States, supporting domestic defense manufacturing and supply chains. Workforce implications may include supporting specialized manufacturing jobs within L3Harris Technologies and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition increases the risk of paying above-market rates for essential spare parts.
Limited transparency into the justification for sole-source award hinders accountability.
The long contract duration without competitive re-evaluation could lead to sustained higher costs.
Absence of performance metrics makes it difficult to assess the contractor's efficiency and effectiveness.
Specialized nature of parts might create vendor lock-in, further reducing future competitive options.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, assuming the initial price is fair.
Awarding to an established entity like L3Harris may leverage existing expertise and supply chain relationships.
The contract supports critical national defense needs, ensuring operational readiness of Air Force assets.
The specific nature of 'BIG SAFARI' spares suggests a focus on unique, high-value components.

Sector Analysis

This contract falls within the Other Aircraft Parts and Auxiliary Equipment Manufacturing sector, a specialized segment of the aerospace and defense industry. This sector is characterized by high technical barriers to entry, stringent quality requirements, and often long product lifecycles. Spending in this area is driven by the need to maintain aging fleets and support advanced military aircraft. Comparable spending benchmarks are difficult to establish due to the proprietary and specialized nature of many defense-related parts, especially those associated with classified or unique programs like 'BIG SAFARI'.

Small Business Impact

The provided data indicates that small business participation was not a primary consideration for this contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting plans. This suggests that the prime contractor, L3Harris Technologies, is expected to fulfill the requirement directly or through its established supply chain, which may or may not involve significant small business engagement. The impact on the small business ecosystem is likely minimal unless L3Harris voluntarily incorporates small businesses into its subcontracting efforts.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including delivery schedules and quality standards, with potential penalties for non-compliance. Transparency is limited due to the sole-source nature and the classified or sensitive aspects often associated with 'BIG SAFARI' programs. Inspector General (IG) jurisdiction would apply if specific allegations of fraud, waste, or abuse arise.

Related Government Programs

Defense Logistics Agency (DLA) Aviation Spares
Air Force Materiel Command (AFMC) Procurement
Aircraft Component Maintenance and Repair Contracts
Specialized Aerospace Manufacturing Contracts
Foreign Military Sales (FMS) Support Equipment

Risk Flags

Sole-source award lacks competitive justification.
Potential for cost overruns due to absence of price competition.
Limited transparency regarding the necessity of sole-sourcing.
Long contract duration without re-competition raises value concerns.
Specialized nature of parts may limit future market options.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.5 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. ACAT III BIG SAFARI FY17 GROUP B SPARES

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 $46.5 million.

What is the period of performance?

Start: 2016-12-15. End: 2020-03-01.

What is the specific nature of the 'ACAT III BIG SAFARI FY17 GROUP B SPARES' and why was competition deemed unnecessary?

The 'ACAT III BIG SAFARI FY17 GROUP B SPARES' likely refers to spare parts for a specific, possibly classified or highly specialized, aircraft program managed by the Air Force (ACAT III indicates a program below the highest defense acquisition category). The 'BIG SAFARI' designation is often associated with rapid acquisition of special operations or intelligence-gathering aircraft. The decision to award this contract on a sole-source basis ('NOT COMPETED') suggests that the government determined only one capable source existed, or that the urgency and unique technical requirements of these specific spares precluded a competitive process. This could be due to proprietary technology, unique manufacturing capabilities held by L3Harris, or the need to maintain commonality with existing platforms where only one supplier could provide compatible parts without significant re-engineering or testing.

How does the $46.5 million contract value compare to similar sole-source awards for specialized aircraft parts?

Direct comparison of this $46.5 million sole-source award to similar contracts is challenging without access to proprietary databases or more specific details about the 'BIG SAFARI' spares. Sole-source awards inherently lack the price transparency that competitive bidding provides, making value assessment difficult. However, for specialized, low-volume, or technologically advanced components within the defense aerospace sector, contract values can range significantly. Factors such as the criticality of the part, the complexity of its manufacturing, the required lead time, and the limited number of qualified manufacturers heavily influence pricing. Without competitive benchmarks, it's presumed the government conducted some form of internal cost analysis or relied on historical pricing, but the absence of competition remains a key factor suggesting potential for higher costs than if multiple bids were solicited.

What are the primary risks associated with awarding a nearly $47 million contract without competition?

The primary risk associated with awarding a nearly $47 million contract without competition is the potential for inflated pricing and reduced value for taxpayer money. Without competing offers, the government loses the opportunity to leverage market forces to drive down costs through negotiation and comparison. This can lead to the contractor charging higher profit margins or less efficient cost structures. Additionally, sole-source awards can stifle innovation and discourage potential new entrants into the market. There's also a risk that the government may not be aware of more cost-effective or technologically superior solutions that could have been offered by other vendors. The lack of competition can also reduce the incentive for the awarded contractor to perform efficiently, as there is no immediate threat of losing future business to a competitor.

What is the expected performance period and delivery timeline for these spares, and how does it impact the overall program?

The contract has a duration of 1172 days, spanning from December 15, 2016, to March 1, 2020. This period covers approximately 3.2 years, indicating a substantial timeframe for the delivery of these 'BIG SAFARI' spares. Such a long duration suggests that these are not typically off-the-shelf items but rather components that may require specialized manufacturing processes or are part of a long-term sustainment plan for the associated aircraft. The extended timeline allows for planned production and delivery schedules, potentially aligning with the operational tempo and maintenance cycles of the Air Force units utilizing the 'BIG SAFARI' platforms. It also implies a consistent demand for these parts throughout the contract period, underscoring their importance to the program's continuity.

What is L3Harris Technologies' track record with similar sole-source defense contracts, particularly within the Air Force?

L3Harris Technologies (and its predecessor companies) has a significant history of contracting with the Department of Defense, including the Air Force, often for specialized systems and components. While specific data on their sole-source awards for 'BIG SAFARI' type programs isn't publicly detailed, the company is a major defense contractor known for its capabilities in areas such as avionics, electronic warfare, and communication systems. Companies of L3Harris's size and scope frequently engage in sole-source or limited-competition contracts when their unique technological expertise or existing system integration capabilities are critical. Assessing their track record would involve examining past performance reviews, any reported issues with contract delivery or quality, and the general pricing trends observed in their sole-source awards, though such detailed information is often not readily available in the public domain.

Are there any specific oversight mechanisms or reporting requirements tied to this sole-source contract to ensure accountability?

While the provided data does not detail specific oversight mechanisms beyond standard contract administration, sole-source contracts, especially those of significant value like this $46.5 million award, are typically subject to rigorous internal government oversight. This often includes regular program reviews, technical monitoring by government engineers, and financial audits. The Air Force contracting officer is responsible for ensuring compliance with contract terms, including delivery schedules and quality standards. Reporting requirements might include periodic progress reports from L3Harris, delivery confirmations, and potentially milestone completion reports. The lack of competition means oversight is more focused on ensuring the contractor meets the agreed-upon terms rather than on validating the initial pricing against market alternatives.

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: $56,207,316

Exercised Options: $46,504,119

Current Obligation: $46,504,119

Subaward Activity

Number of Subawards: 48

Total Subaward Amount: $30,468,724

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline