DoD's $76M SATCOM contract awarded to L3Harris without competition, raising value-for-money questions

Contract Overview

Contract Amount: $76,384,223 ($76.4M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2016-12-21

End Date: 2022-01-31

Contract Duration: 1,867 days

Daily Burn Rate: $40.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACAT III BIG SAFARI VIPSAM PROTECTED SATCOM

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $76.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: ACAT III BIG SAFARI VIPSAM PROTECTED SATCOM Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant contract duration of 1867 days suggests a long-term need for these services. 3. The 'Other Aircraft Parts' NAICS code may not fully capture the complexity of SATCOM services. 4. Lack of competition raises concerns about whether the government secured the best possible value. 5. The firm-fixed-price contract type shifts some risk to the contractor, but without competition, its effectiveness is diminished. 6. Awarded by the Air Force, this contract supports critical satellite communication capabilities.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source $76 million contract is challenging due to the absence of competitive bids. Without comparison to other offers, it's difficult to ascertain if L3Harris Technologies provided the most cost-effective solution. The firm-fixed-price structure is generally favorable for cost control, but the lack of competition means the government couldn't leverage market forces to drive down prices. Further analysis would require access to internal cost data or comparable sole-source awards for similar SATCOM systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3Harris Technologies was the only bidder considered. This approach is typically used when only one responsible source can provide the required supplies or services. However, it bypasses the competitive process, which is designed to ensure the government receives the best value through price and technical proposals from multiple vendors. The lack of competition here means taxpayers did not benefit from the potential cost savings and innovation that a competitive bidding process could have yielded.

Taxpayer Impact: Sole-source awards limit the government's ability to negotiate favorable pricing, potentially leading to higher costs for taxpayers. Without competitive pressure, there's less incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are likely Department of Defense units relying on secure satellite communications for operational effectiveness. The contract delivers critical protected satellite communication capabilities essential for national security. The geographic impact is likely global, supporting deployed forces wherever they operate. Workforce implications may include specialized technical roles within L3Harris and potentially at the Air Force for program oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potential cost savings for taxpayers.
Sole-source awards can reduce incentive for contractors to offer competitive pricing.
The NAICS code 'Other Aircraft Parts' might not fully represent the specialized nature of SATCOM services.
Contract duration of nearly 2000 days warrants scrutiny for potential scope creep or inefficiencies.

Positive Signals

Firm-fixed-price contract type provides cost certainty to the government.
Awarded to a known entity, L3Harris Technologies, suggesting established capabilities.
Supports critical protected satellite communication, a vital national security function.

Sector Analysis

The defense sector heavily relies on advanced communication technologies, including satellite communications (SATCOM), for global operations. This contract falls within the broader aerospace and defense industry, specifically focusing on specialized equipment and services for secure, protected satellite links. The market for SATCOM is characterized by high barriers to entry due to technological complexity and significant R&D investment. Comparable spending benchmarks are difficult to establish without more specific details on the technology and services provided, but large-scale defense SATCOM contracts can run into hundreds of millions or even billions of dollars over their lifecycle.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, L3Harris Technologies, is a large aerospace and defense company. There is no explicit information provided regarding subcontracting plans for small businesses. Without a set-aside or clear subcontracting goals, the direct impact on the small business ecosystem for this specific contract is likely minimal, though large prime contractors often engage small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, scrutiny might be higher to ensure fair and reasonable pricing. Transparency is limited due to the non-competitive nature. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected. The firm-fixed-price nature provides some cost control, but the absence of competition is a key area for oversight.

Related Government Programs

DoD Protected SATCOM Programs
Air Force Satellite Communication Systems
Defense Communications Infrastructure
National Security Space Programs

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-competitive pricing.
NAICS code may not fully represent service complexity.
Long contract duration requires careful management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. ACAT III BIG SAFARI VIPSAM PROTECTED SATCOM

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 $76.4 million.

What is the period of performance?

Start: 2016-12-21. End: 2022-01-31.

What specific SATCOM capabilities does this contract provide, and how do they differ from commercially available services?

The contract data indicates 'BIG SAFARI VIPSAM PROTECTED SATCOM,' suggesting highly specialized and secure satellite communication capabilities. 'BIG SAFARI' is an Air Force program focused on rapid acquisition of intelligence, surveillance, and reconnaissance (ISR) capabilities, often involving advanced technologies. 'VIPSAM' likely refers to a specific protected satellite communication system. These capabilities are typically distinct from commercial SATCOM due to stringent security requirements, resilience against jamming or interference, and integration with military command and control networks. Commercial services prioritize bandwidth and cost-effectiveness for broader use, whereas protected SATCOM prioritizes assured communication for high-value military missions, often at a significantly higher cost per unit of bandwidth.

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

Sole-source justifications typically stem from unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. For a protected SATCOM system like VIPSAM, it's plausible that L3Harris Technologies possesses unique intellectual property, specialized manufacturing processes, or exclusive access to necessary satellite resources that cannot be replicated by other firms. The 'BIG SAFARI' program's nature also suggests rapid acquisition needs, which can sometimes lead to sole-source awards if a competitive process would cause unacceptable delays. However, without the official justification document (e.g., Justification and Approval - J&A), the precise rationale remains speculative, but it would need to demonstrate why competition was not feasible or advantageous.

How does the $76 million contract value compare to similar protected SATCOM procurements by the DoD or other agencies?

Directly comparing the $76 million value is difficult without knowing the specific duration, scope, and technical specifications of the services provided. Protected SATCOM is inherently more expensive than commercial SATCOM due to enhanced security, resilience, and specialized infrastructure. However, $76 million over approximately five years (based on the contract dates) represents a substantial investment. For context, major military satellite programs and constellations can cost billions. Smaller, service-based contracts for protected bandwidth or terminal support might range from tens to hundreds of millions. The lack of competition here makes it impossible to benchmark against potential lower bids, but the overall value should be assessed against the criticality and uniqueness of the capability delivered.

What are the potential risks associated with a sole-source award for critical defense communication systems?

The primary risk of a sole-source award for critical defense communication systems is the potential for inflated costs due to the absence of competitive pressure. Taxpayers may end up paying more than necessary. Another risk is reduced innovation, as the contractor may have less incentive to develop more cost-effective or advanced solutions if they are guaranteed the contract. Furthermore, over-reliance on a single supplier can create vulnerabilities if that supplier faces financial difficulties, operational issues, or geopolitical challenges. Ensuring robust oversight and performance management becomes even more critical in sole-source situations to mitigate these risks and ensure the government receives adequate value and maintains mission capability.

What is L3Harris Technologies' track record with similar DoD SATCOM contracts?

L3Harris Technologies is a major defense contractor with extensive experience in communications, electronic warfare, and space systems, including satellite technology. They have a significant history of delivering complex systems to the DoD. While specific details on their past performance for 'BIG SAFARI VIPSAM PROTECTED SATCOM' are not provided in this data snippet, the company is generally recognized for its capabilities in these areas. Their track record would typically be assessed through past performance evaluations in source selection processes. For a sole-source award, the government would have likely reviewed L3Harris's existing performance and capabilities to ensure they could meet the demanding requirements of protected military SATCOM.

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: $76,400,866

Exercised Options: $76,384,223

Current Obligation: $76,384,223

Subaward Activity

Number of Subawards: 49

Total Subaward Amount: $8,963,194

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline