DoD's $41M contract for aircraft parts awarded to L3Harris Technologies, with limited competition

Contract Overview

Contract Amount: $41,056,384 ($41.1M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2018-04-30

End Date: 2020-08-29

Contract Duration: 852 days

Daily Burn Rate: $48.2K/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 $41.1 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IGF::OT::IGF ACAT III BIG SAFARI Key points: 1. The contract value of $41 million represents a significant investment in specialized aircraft components. 2. Limited competition for this contract may indicate a need for highly specific technical capabilities. 3. The duration of the contract (852 days) suggests a substantial project or ongoing supply requirement. 4. The award was made to a single entity, L3Harris Technologies, highlighting potential single-source reliance. 5. The contract type (Cost No Fee) requires careful monitoring of cost incurrence by the contractor. 6. The geographic location of the contractor in Texas is noted.

Value Assessment

Rating: fair

Benchmarking the value of this $41 million contract is challenging without specific details on the aircraft parts and their criticality. However, the 'Cost No Fee' contract type suggests the government is bearing the cost of performance, and the contractor's profit is fixed. This necessitates close oversight to ensure costs are reasonable and necessary. The absence of competitive bids limits direct price comparisons, making it difficult to assess if the price achieved represents optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, L3Harris Technologies, was solicited. This approach is typically used when only one responsible source is available or when urgent, compelling reasons exist. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple suppliers.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price.

Public Impact

The primary beneficiaries are likely the U.S. Air Force units requiring these specific aircraft parts for operational readiness. The services delivered involve the manufacturing and supply of specialized aircraft components, crucial for maintaining airworthiness. The geographic impact is primarily within the United States, with the contractor based in Texas. Workforce implications include employment opportunities at L3Harris Technologies and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the 'Cost No Fee' contract type without competitive pricing.
Risk of supply chain disruption if L3Harris Technologies faces production issues, given the sole-source nature.
Limited visibility into alternative solutions or technological advancements from other potential suppliers.

Positive Signals

Award to an established contractor, L3Harris Technologies, suggests a degree of confidence in their capability.
The contract duration indicates a commitment to ensuring sustained availability of critical parts.
The specific nature of the parts likely addresses a unique and essential requirement for the Air Force.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical segment of the aerospace and defense industry. This sector is characterized by high technological demands, stringent quality control, and often long production cycles. The market size for aircraft parts manufacturing is substantial, driven by military and commercial aviation needs. This specific award likely supports a niche requirement within the broader defense aerospace market, where specialized components are essential for the performance and safety of advanced aircraft.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the sole-source nature and the likely specialized technical requirements, it is improbable that small businesses were primary awardees. Subcontracting opportunities for small businesses may exist if L3Harris Technologies chooses to engage them for specific components or services, but this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Given the 'Cost No Fee' structure, rigorous financial oversight is crucial to monitor incurred costs and ensure compliance with contract terms. Transparency is enhanced through contract reporting mechanisms, though the sole-source nature limits public scrutiny of the bidding process itself. The Inspector General's office may conduct audits or investigations if specific concerns regarding cost, performance, or fraud arise.

Related Government Programs

Department of Defense Aircraft Procurement
Air Force Logistics and Sustainment Contracts
Aerospace Manufacturing and Repair
Defense Industrial Base Contracts

Risk Flags

Sole-source award limits price competition.
Cost-reimbursement structure requires diligent cost oversight.
Lack of specific part details hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.1 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 $41.1 million.

What is the period of performance?

Start: 2018-04-30. End: 2020-08-29.

What specific aircraft or systems does this contract support, and what is the criticality of these parts?

The provided data indicates the contract (ID: IGF::OT::IGF ACAT III BIG SAFARI) is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' and was awarded to L3Harris Technologies. While the specific aircraft or systems are not detailed, the contract's ACAT III designation suggests it's a program of significant but not the highest level of importance within the DoD's acquisition categories. The criticality of the parts would be determined by their role in maintaining the operational readiness and safety of the supported aircraft. Without further details on the specific part numbers or their function, it's difficult to ascertain their exact criticality, but given the sole-source award and the substantial value, they are likely essential components for which L3Harris holds unique manufacturing capabilities or intellectual property.

How does the 'Cost No Fee' contract type impact the government's financial risk and oversight requirements?

A 'Cost No Fee' (CNF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This structure is typically used in situations where the contractor has little or no control over costs, or when the government has a strong interest in the contractor's performance without incentivizing profit maximization. For the government, the primary financial risk is that the contractor may incur higher costs than anticipated, as the government bears the burden of all allowable expenses. Consequently, CNF contracts necessitate robust government oversight to scrutinize and validate all claimed costs, ensuring they are reasonable, allocable, and allowable under the contract terms. This often involves detailed audits and close monitoring of the contractor's financial management and performance.

What are the implications of a sole-source award for price negotiation and potential cost savings?

A sole-source award, by definition, means only one vendor was considered or available to fulfill the requirement. This significantly limits the government's leverage in price negotiation. Without competition, there is no market pressure to drive down prices, and the government must rely heavily on its ability to negotiate a fair and reasonable price based on cost analysis, historical data, or independent cost estimates. The absence of competing bids means potential cost savings that could arise from a competitive bidding process are foregone. This underscores the importance of thorough pre-award negotiations and robust cost realism analysis when sole-source procurements are necessary.

What is L3Harris Technologies' track record with similar DoD contracts, particularly in aircraft parts manufacturing?

L3Harris Technologies is a major defense contractor with a broad portfolio, including significant work in aerospace and defense systems. While specific details on their track record for this exact contract (IGF::OT::IGF ACAT III BIG SAFARI) are not provided, the company has extensive experience in manufacturing and supplying complex components for various military platforms. Their history likely includes numerous contracts for aircraft parts, avionics, and integrated systems. Given their size and scope, they are generally considered capable of meeting demanding defense requirements. However, a comprehensive assessment would require reviewing their performance history on specific, comparable contracts, including any past performance issues or successes related to quality, delivery, and cost management in the aircraft parts domain.

How does the contract duration of 852 days (approximately 2.3 years) align with typical sustainment or production cycles for aircraft parts?

A contract duration of 852 days for aircraft parts can align with various sustainment or production cycles. If these are parts for an existing fleet, the duration might represent a period of ongoing sustainment, ensuring availability of critical components over a significant timeframe. Alternatively, if the parts are for a new production line or a specific upgrade program, this duration could cover the manufacturing and delivery phase. For complex or specialized components, a multi-year contract is not unusual, allowing for planned production, quality assurance, and delivery schedules. The length suggests a substantial requirement rather than a short-term, ad-hoc need, implying these parts are integral to the operational capability of the supported aircraft.

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: $41,076,723

Exercised Options: $41,076,723

Current Obligation: $41,056,384

Actual Outlays: $854,653

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $112,850

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