DoD's $59.3M contract for aircraft parts awarded to L3Harris Technologies, with no competition

Contract Overview

Contract Amount: $59,325,170 ($59.3M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2017-12-21

End Date: 2018-12-31

Contract Duration: 375 days

Daily Burn Rate: $158.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::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 $59.3 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IGF::CT::IGF ACAT III BIG SAFARI Key points: 1. The contract's value of $59.3 million represents a significant investment in specialized aircraft components. 2. The sole-source nature of this award raises questions about potential price inflation and limited market engagement. 3. Performance risks are moderate, given the specialized nature of aircraft parts and the single-source supplier. 4. This contract falls within the broader defense sector's extensive spending on aircraft sustainment and upgrades. 5. The lack of competition limits opportunities for other capable firms to enter the market and offer alternative solutions. 6. The contract's duration and delivery order structure suggest a need for ongoing, specific component provision.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific, potentially niche, aircraft parts involved. Without competitive bids, it's difficult to ascertain if the $59.3 million price reflects fair market value or if a more cost-effective solution could have been achieved through open competition. The fixed fee component suggests some cost control, but the overall pricing cannot be independently validated against market alternatives.

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 bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means there was no direct price comparison or opportunity for other suppliers to offer potentially lower bids or innovative solutions, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium for these aircraft parts due to the absence of competitive pressure. The government missed an opportunity to leverage market forces to secure the best possible price and value.

Public Impact

The primary beneficiaries are the Department of Defense and potentially specific aircraft platforms requiring these specialized parts. The services delivered involve the manufacturing and supply of Other Aircraft Parts and Auxiliary Equipment. The geographic impact is primarily centered in Texas, where L3Harris Technologies is located, but the ultimate operational impact is on Air Force readiness. Workforce implications include employment at L3Harris Technologies and its supply chain, supporting specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may stifle innovation from other potential suppliers in the aircraft parts market.
Dependence on a single supplier for critical components could pose supply chain risks.
The specific nature of 'Other Aircraft Parts' makes it difficult to assess value without market comparisons.

Positive Signals

L3Harris Technologies is an established defense contractor with experience in complex systems.
The contract specifies a Cost Plus Fixed Fee structure, which aims to control costs while allowing for profit.
The award is for specific aircraft parts, indicating a targeted need within the Air Force's operations.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. Spending on aircraft parts and maintenance is a substantial component of defense budgets, essential for maintaining fleet readiness. This contract fits within the broader category of aircraft sustainment and component manufacturing, where specialized expertise and certifications are often required. Comparable spending benchmarks are difficult to establish without knowing the exact nature of the parts, but overall defense spending on aircraft components runs into billions annually.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The sole-source nature further limits the opportunity for small businesses to participate in this specific procurement. While L3Harris Technologies may engage small businesses in its broader supply chain, this particular award does not directly benefit the small business ecosystem through set-asides.

Oversight & Accountability

Oversight for this contract would typically 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 into contract performance and pricing, particularly given the sole-source award. Transparency is limited due to the lack of a competitive process, making public scrutiny of value-for-money more challenging.

Related Government Programs

Department of Defense Aircraft Procurement
Air Force Sustainment and Maintenance Contracts
Defense Industrial Base Manufacturing
Aerospace Component Supply Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited transparency on value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.3 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. IGF::CT::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 $59.3 million.

What is the period of performance?

Start: 2017-12-21. End: 2018-12-31.

What is L3Harris Technologies' track record with the Department of Defense, particularly for similar aircraft parts contracts?

L3Harris Technologies, formed through the merger of Harris Corporation and L3 Technologies, has a substantial track record with the Department of Defense across various platforms and services. They are known for providing a wide range of defense electronics, communication systems, and integrated solutions. For aircraft parts and auxiliary equipment, their experience likely spans numerous contracts, including sustainment, upgrades, and specialized component manufacturing. While specific details on past performance for identical 'Other Aircraft Parts' are not provided here, their overall standing as a major defense contractor suggests a history of fulfilling complex requirements. However, the nature of sole-source awards means that direct comparisons of performance metrics against competitors for this specific contract are not publicly available.

How does the $59.3 million value compare to similar sole-source contracts for aircraft parts?

Directly comparing the $59.3 million value of this sole-source contract for 'Other Aircraft Parts' to similar sole-source awards is challenging without specific details on the exact components, their criticality, and the required specifications. Sole-source contracts inherently lack the price discovery mechanism of competition, making value assessment difficult. Generally, sole-source awards can be more expensive than competitively procured contracts. The value itself is significant, indicating a substantial procurement, but whether it represents fair market value is questionable without a competitive benchmark. The government may have justified this sole-source award based on unique capabilities, proprietary technology, or urgent needs, but the absence of competition prevents a definitive value comparison.

What are the primary risks associated with a sole-source award for critical aircraft components?

The primary risks associated with a sole-source award for critical aircraft components include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and increased vulnerability in the supply chain. If the sole supplier faces production issues, financial difficulties, or geopolitical disruptions, the government has limited alternative sources for these essential parts, potentially impacting aircraft availability and mission readiness. Furthermore, the absence of competition can lead to a lack of transparency regarding pricing and cost justification, making it harder for the government to ensure it is receiving the best value for taxpayer money.

What is the typical process for awarding a sole-source contract in the Department of Defense?

Sole-source contracts in the Department of Defense are typically awarded when only one responsible source is capable of providing the required supplies or services. This can occur under specific circumstances outlined in the Federal Acquisition Regulation (FAR), such as when the supply is available only from a single source, or when there is a compelling urgency that precludes competition. The agency must justify the sole-source determination, often requiring extensive documentation and approval from higher authorities. For significant procurements like this $59.3 million contract, the justification process is rigorous, aiming to ensure that competition is truly not feasible or not in the government's best interest before proceeding without it.

How does this contract fit into the broader spending patterns for aircraft parts and maintenance within the Air Force?

This $59.3 million contract for 'Other Aircraft Parts' represents a component of the Air Force's extensive spending on aircraft sustainment, which is crucial for maintaining operational readiness. The Air Force, like other branches of the military, allocates significant portions of its budget to ensuring its fleets are functional, safe, and capable. Spending on parts, maintenance, repair, and overhaul (MRO) is a continuous requirement. While this specific contract value is substantial for a single award, it is likely one of many thousands of contracts supporting the vast Air Force inventory. Such procurements are essential for life-cycle management of aircraft, ensuring that aging platforms can continue to serve effectively.

What are the implications of the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code for this contract?

The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicates that the contract is for the production of components and accessories for aircraft that are not specifically covered by other manufacturing codes. This broad category can encompass a wide range of items, from structural components and engine parts to electronic systems and interior fittings. For this contract, it suggests a need for specialized manufacturing capabilities. The 'Other' designation implies that the parts may be unique, custom-made, or not part of a standard, high-volume production run, which can sometimes contribute to higher costs and necessitate specific supplier qualifications.

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 PLUS FIXED FEE (U)

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: $61,339,269

Exercised Options: $59,548,229

Current Obligation: $59,325,170

Subaward Activity

Number of Subawards: 62

Total Subaward Amount: $11,054,859

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