DoD's $44.7M contract for aircraft parts awarded to L3Harris Technologies raises questions about competition and value

Contract Overview

Contract Amount: $44,718,194 ($44.7M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2018-08-13

End Date: 2020-11-30

Contract Duration: 840 days

Daily Burn Rate: $53.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: IGF::OT::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 $44.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IGF::OT::IGF ACAT III BIG SAFARI Key points: 1. The contract's value of $44.7 million warrants scrutiny, especially given its 'NOT COMPETED' status. 2. Competition dynamics are limited, suggesting potential for higher costs and reduced innovation. 3. Risk indicators include the lack of competitive bidding and the sole-source nature of the award. 4. Performance context is unclear without specific details on the aircraft parts and their criticality. 5. The contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a broad category. 6. The award to L3Harris Technologies, a major defense contractor, is noted. 7. The contract duration of 840 days (2.3 years) provides a timeframe for performance evaluation.

Value Assessment

Rating: questionable

Benchmarking the value of this $44.7 million contract is challenging without specific details on the aircraft parts procured and their intended use. However, the absence of competition inherently limits the ability to assess if the pricing reflects fair market value. Compared to similar sole-source awards, this contract's value could be inflated due to the lack of competitive pressure. Further analysis would require understanding the specific components, their technical specifications, and the availability of alternative suppliers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically reserved for situations where only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that L3Harris Technologies was the only bidder, and the government did not have the opportunity to solicit and evaluate offers from other qualified companies.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price through competitive bidding. This can lead to higher overall spending for the government and, consequently, for taxpayers.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically the Air Force, through the acquisition of critical aircraft parts. The services delivered involve the manufacturing and supply of 'Other Aircraft Parts and Auxiliary Equipment'. The geographic impact is centered in Texas, where L3Harris Technologies' facility is located. Workforce implications may include job creation or maintenance at L3Harris's facilities involved in fulfilling this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to inflated costs.
Sole-source award limits price discovery and potential for innovation.
Oversight is crucial to ensure fair pricing and performance without competition.
Transparency regarding the justification for sole-source award is important.

Positive Signals

Award to an established defense contractor (L3Harris Technologies) suggests potential for reliable delivery.
Contract is for aircraft parts, indicating a critical need for defense operations.
The contract has a defined end date, allowing for future reassessment of procurement strategies.

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, which is a subset of the broader aerospace and defense industry. This sector is characterized by high technological demands, stringent quality control, and significant government procurement. The market size for aircraft parts manufacturing is substantial, driven by military and commercial aviation needs. This specific contract likely supports a particular aircraft platform or fleet, fitting within the Department of Defense's overall strategy for maintaining its aviation assets.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, L3Harris Technologies, is a large defense contractor, and any subcontracting would be at their discretion, not mandated by a set-aside requirement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. Given the sole-source nature, there may be increased scrutiny from the Inspector General's office to ensure the justification for the award was sound and that the pricing is reasonable. Transparency regarding the contract details and performance would be expected through standard government reporting channels, though the lack of competition might limit public visibility into the negotiation process.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Sole-Source Contracts
Air Force Logistics

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency in award process

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. IGF::OT::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 $44.7 million.

What is the period of performance?

Start: 2018-08-13. End: 2020-11-30.

What specific aircraft parts are being procured under this contract, and what is their criticality to Air Force operations?

The provided data classifies this contract under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) and indicates it was awarded to L3Harris Technologies. However, the specific types of aircraft parts are not detailed. Their criticality would depend on the particular aircraft platforms they are intended for. If these parts are for aging aircraft or specialized systems with limited alternative suppliers, their criticality would be high, potentially justifying a sole-source award. Without this specific information, it's difficult to fully assess the necessity and urgency driving the procurement.

What was the justification for awarding this contract on a sole-source basis rather than through full and open competition?

The data explicitly states the contract was 'NOT COMPETED' (ct: NOT COMPETED), indicating a sole-source award. The specific justification for this sole-source award is not provided in the abbreviated data. Typically, sole-source justifications are based on factors such as the unique capability of a single contractor, the need for compatibility with existing systems, urgent and compelling circumstances, or the lack of adequate competition. The Department of Defense would have had to formally document and approve such a justification, often requiring review by higher authorities or the Inspector General's office to ensure it met regulatory requirements.

How does the awarded price of $44.7 million compare to market rates or similar sole-source contracts for comparable aircraft parts?

Directly comparing the $44.7 million price is difficult without knowing the exact specifications and quantities of the aircraft parts. However, the absence of competition inherently raises concerns about price reasonableness. Market rates are typically established through competitive bidding. For sole-source contracts, the government often relies on cost analysis, historical pricing, or benchmarking against similar, albeit not identical, sole-source awards. Without access to the detailed cost breakdown or comparable sole-source data for similar parts, it's challenging to definitively state if this price is optimal. The fact that it's a sole-source award suggests a higher potential for the price to be above what might be achieved in a competitive environment.

What is L3Harris Technologies' track record with the Department of Defense, particularly concerning contracts of similar size and scope?

L3Harris Technologies is a major defense contractor with a significant history of performing contracts for the Department of Defense. While the abbreviated data doesn't detail their specific performance on this contract (as it's a past contract ending in 2020), their overall track record with the DoD is extensive, covering a wide range of defense systems and services. Companies of this size typically have established processes for contract management and delivery. However, performance can vary across individual contracts. A deeper dive into L3Harris's past performance ratings, any past performance issues, or awards on similar sole-source contracts would provide a more comprehensive view of their reliability in this context.

What are the potential risks associated with awarding a contract of this magnitude without competition?

The primary risks associated with awarding a contract of this magnitude without competition include: 1) Paying a higher price than necessary due to the lack of competitive pressure. 2) Receiving lower quality goods or services if the contractor is not incentivized by competition to excel. 3) Limited innovation, as there's no drive from competing firms to offer novel solutions. 4) Potential for contractor complacency or reduced responsiveness. 5) Difficulty in verifying the reasonableness of costs. For this specific $44.7 million contract, these risks are present because the government did not explore alternative sources or pricing structures that competition would typically provide.

How does this contract fit into the broader spending patterns for aircraft parts and auxiliary equipment within the Department of Defense?

The Department of Defense is a massive consumer of aircraft parts and auxiliary equipment, with annual spending in the billions of dollars across various platforms and services. This $44.7 million contract represents a specific procurement within that larger ecosystem. Its significance depends on the specific aircraft it supports. If it's for a widely used platform, it might be one of many similar contracts. If it's for a niche or specialized aircraft, it could represent a larger portion of the spending for that particular asset. Analyzing this contract in isolation provides limited insight into overall spending patterns; a broader analysis of DoD's sustainment and procurement budgets for aviation would be needed.

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: COST NO FEE (S)

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: $44,775,658

Exercised Options: $44,775,658

Current Obligation: $44,718,194

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