DoD's $37M contract for aircraft parts awarded to L3Harris Technologies, with limited competition

Contract Overview

Contract Amount: $37,055,016 ($37.1M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2018-01-30

End Date: 2020-02-27

Contract Duration: 758 days

Daily Burn Rate: $48.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

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 $37.1 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 $37.06 million represents a significant investment in specialized aircraft components. 2. Awarded under a sole-source basis, the lack of broader competition may limit price discovery. 3. The contract duration of 758 days suggests a substantial and ongoing need for these parts. 4. The geographic location of the contractor in Texas could imply regional economic benefits. 5. The absence of small business set-asides raises questions about broader economic inclusion. 6. The firm-fixed-price structure aims to provide cost certainty for the government.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the aircraft parts procured and their technical specifications. However, the $37.06 million awarded over approximately two years indicates a substantial expenditure. Given the sole-source nature, it's difficult to assess if this represents optimal value compared to a competitive scenario. The firm-fixed-price contract type suggests the government sought to control costs, but the absence of competitive bids prevents a direct comparison to market rates or similar contracts.

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 vendor considered. This approach is typically used when only one source can fulfill the requirement, perhaps due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from multiple bidders vying for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without alternative quotes, it's harder to ensure the most cost-effective solution was secured.

Public Impact

The primary beneficiaries are likely the specific military aviation programs requiring these specialized aircraft parts. The services delivered are critical for maintaining the operational readiness and effectiveness of Air Force aircraft. The geographic impact is concentrated in Texas, where L3Harris Technologies is located, potentially supporting local jobs and the regional economy. Workforce implications include the employment of skilled labor within L3Harris for manufacturing and supporting these components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of small business participation may exclude smaller, innovative firms from contributing.
Limited transparency on the specific parts and their necessity could obscure true value.
The 'Other Aircraft Parts' NAICS code is broad, making it hard to assess the criticality of the specific items.

Positive Signals

Award to a known entity, L3Harris Technologies, suggests a level of established capability.
Firm-fixed-price contract provides budget certainty for the government.
The contract supports critical defense infrastructure and readiness.
The duration of the contract allows for sustained supply chain support.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for such components is highly specialized, often dominated by a few large, established players like L3Harris Technologies due to stringent quality, certification, and technological requirements. Spending in this area is critical for maintaining military readiness and technological superiority. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar high-value, specialized aircraft components within the Department of Defense.

Small Business Impact

This contract does not appear to have included a small business set-aside. The sole-source nature of the award further limits opportunities for small businesses to participate, either as prime contractors or potentially as subcontractors unless specifically mandated by L3Harris. This could mean missed opportunities for the small business ecosystem to contribute to defense supply chains and benefit from government spending.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Inspector General's office for the Department of Defense may conduct audits or investigations if specific concerns arise regarding performance, cost, or compliance. Transparency is limited by the sole-source nature, but contract modifications, performance reports, and payment data are typically maintained within government systems.

Related Government Programs

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

Risk Flags

Sole-source award
Lack of competition
Potential for non-competitive pricing
Limited transparency on specific deliverables

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.1 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 $37.1 million.

What is the period of performance?

Start: 2018-01-30. End: 2020-02-27.

What specific aircraft parts were procured under this $37 million contract, and why were they deemed only available from L3Harris Technologies?

The provided data indicates the contract falls under NAICS code 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing). However, the specific parts are not detailed. The sole-source justification (CT: NOT COMPETED) implies that the Air Force determined L3Harris Technologies was the only responsible source capable of providing the required items. This could be due to proprietary technology, unique manufacturing processes, existing system integration requirements, or specific certifications held exclusively by L3Harris. Without further documentation, such as a Justification and Approval (J&A) for other than full and open competition, the precise reasons remain unspecified. Understanding the exact nature of these parts is crucial for assessing their necessity and the validity of the sole-source award.

How does the $37 million contract value compare to historical spending on similar aircraft parts by the Department of the Air Force?

Direct comparison of the $37.06 million contract value to historical spending on similar aircraft parts is difficult without knowing the specific components procured. The NAICS code 336413 is broad. However, the contract's duration of 758 days (approximately 2 years) suggests an average annual spend of roughly $18.5 million. To establish a benchmark, one would need to analyze past contracts for comparable specialized aircraft components, considering factors like technological complexity, quantity, and supplier. Given this was a sole-source award, it's plausible that competitive bids could have yielded lower prices, making historical data from competitively awarded contracts particularly valuable for comparison, though such data is not provided here.

What are the key performance indicators (KPIs) or metrics used to evaluate L3Harris Technologies' performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or metrics used to evaluate L3Harris Technologies' performance. Typically, for firm-fixed-price contracts involving manufactured goods, KPIs would focus on aspects such as on-time delivery rates, adherence to quality standards (e.g., defect rates, compliance with specifications), technical performance of the parts, and responsiveness to any required modifications or support. The contract's duration and value suggest that performance monitoring would be an ongoing process managed by the Air Force contracting officer's representative (COR). Without access to the contract's statement of work (SOW) or performance clauses, the specific evaluation criteria remain unknown.

What is the risk profile associated with this sole-source contract, considering potential cost overruns or performance issues?

The primary risk associated with this sole-source contract is the potential for cost overruns and suboptimal performance due to the lack of competition. Without competing bids, there is less market pressure on L3Harris Technologies to offer the lowest possible price, potentially leading to higher costs for the government. Performance risks include the possibility of delays, quality issues, or the contractor not meeting the required technical specifications. While the firm-fixed-price structure shifts some cost risk to the contractor, the government still bears the risk of paying a non-competitive price for potentially inadequate performance. Robust government oversight and clear performance standards in the contract are crucial to mitigate these risks.

Are there any known issues or past performance concerns related to L3Harris Technologies and similar defense contracts?

The provided data does not include information on L3Harris Technologies' past performance or any specific issues related to this contract or similar defense contracts. L3Harris Technologies is a major defense contractor, and like many large companies in this sector, it likely has a portfolio of contracts with varying performance histories. A comprehensive risk assessment would require reviewing contractor performance evaluation reports (CPARS), any past audit findings, or publicly reported disputes or litigation involving the company related to defense procurements. Without this specific context, it's impossible to assess performance-related risks stemming from the contractor's track record.

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: FIRM FIXED PRICE (J)

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: $37,220,373

Exercised Options: $37,220,373

Current Obligation: $37,055,016

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