DoD's $26.4M L3Harris contract for aircraft parts saw no competition, raising value concerns

Contract Overview

Contract Amount: $26,419,539 ($26.4M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2017-12-29

End Date: 2019-01-31

Contract Duration: 398 days

Daily Burn Rate: $66.4K/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 $26.4 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 proposition is questionable due to the lack of competitive bidding. 2. Limited competition dynamics suggest potential for overpayment and reduced innovation. 3. Risk indicators include the absence of a competitive process and a cost-plus contract type. 4. Performance context is limited as this is a delivery order under a larger contract. 5. This contract falls within the Defense sector, specifically related to aircraft parts manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards or open market data. The 'Cost Plus Fixed Fee' (CPFF) contract type, while common for complex or uncertain scopes, can incentivize cost overruns if not closely monitored. The awarded amount of $26.4 million for a 398-day duration needs further scrutiny against industry standards for similar aircraft parts and auxiliary equipment to determine if it represents a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3Harris Technologies Integrated Systems L.P. was the only bidder considered. The absence of a competitive solicitation process limits the government's ability to explore alternative solutions or negotiate the best possible price. This approach is typically justified when only one source possesses the required capabilities or when urgency precludes a full competition.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage that competition provides to drive down prices and ensure value.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, receiving critical aircraft parts. Services delivered include the manufacturing and supply of 'Other Aircraft Parts and Auxiliary Equipment'. The geographic impact is centered in Texas, where L3Harris Technologies Integrated Systems L.P. is located. Workforce implications include employment at L3Harris and its supply chain, supporting specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Cost-plus contract type can increase financial risk if costs are not managed effectively.
Limited transparency into the sole-source justification process.

Positive Signals

Contract awarded to an established defense contractor, potentially indicating reliability.
Delivery order structure suggests it may be part of a larger, pre-vetted program.

Sector Analysis

The defense industrial base, particularly the segment focused on aircraft parts and auxiliary equipment manufacturing, is a critical component of national security. This contract falls within a market characterized by high barriers to entry, specialized technical expertise, and significant government investment. Comparable spending benchmarks are difficult to ascertain without more specific details on the parts procured, but the overall defense aerospace sector involves billions in annual spending.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the sole-source nature and the prime contractor's size, the potential for small business subcontracting opportunities is unclear and would depend on L3Harris's internal policies and the specific requirements of the delivery order. Further analysis would be needed to determine if small businesses were indirectly impacted.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The 'Cost Plus Fixed Fee' structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is limited due to the sole-source nature.

Related Government Programs

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

Risk Flags

Sole-source award lacks competition.
Cost-plus contract type carries inherent cost risk.
Lack of detailed information on specific parts procured hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 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 $26.4 million.

What is the period of performance?

Start: 2017-12-29. End: 2019-01-31.

What specific aircraft parts or auxiliary equipment were procured under this contract?

The provided data indicates the contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS code 336413) category. However, the specific nature of the parts is not detailed in the available information. This level of specificity is crucial for a thorough value analysis, as the complexity, criticality, and market availability of different aircraft components can vary significantly. Without knowing the exact items, it's impossible to benchmark pricing against similar components or assess the necessity of a sole-source award based on unique technical requirements.

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

The data explicitly states the contract was 'NOT COMPETED,' implying a sole-source award. Government contracts are typically awarded competitively unless specific exceptions apply, such as the existence of only one responsible source, urgent and compelling needs, or specific statutory authorities. The justification for this sole-source award would have been documented by the Department of the Air Force at the time of procurement. Understanding this justification is key to assessing whether the lack of competition was warranted or if it potentially deprived the government of better pricing and options.

How does the 'Cost Plus Fixed Fee' (CPFF) structure impact the risk and value for this contract?

The CPFF contract type means the contractor (L3Harris) is reimbursed for their actual costs plus a fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves significant uncertainty. While it allows the government to proceed with necessary work, it shifts some cost risk to the government. Effective oversight is critical to ensure costs are reasonable and allocable. The fixed fee, however, is negotiated upfront, providing some predictability on profit. The value assessment must consider whether the potential for cost growth under CPFF was adequately mitigated by contract terms and oversight.

What is the track record of L3Harris Technologies Integrated Systems L.P. with the Department of Defense for similar contracts?

L3Harris Technologies is a major defense contractor with a substantial history of performing work for the Department of Defense across various platforms and services. While this specific delivery order was for aircraft parts, the company has broader capabilities in aerospace systems, electronics, and information technology. Accessing historical performance data, past performance evaluations, and contract award history for L3Harris related to aircraft components and similar contract types would provide insight into their reliability, cost management, and overall value delivery in previous engagements.

How does the $26.4 million award compare to historical spending on aircraft parts by the Air Force?

To compare this $26.4 million award to historical spending, one would need to analyze the Air Force's procurement data for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) over the contract's duration (2017-2019) and preceding years. This would involve identifying similar types of parts, contract vehicles (e.g., sole-source vs. competitive), and contract types (e.g., CPFF). Without specific part details, a direct comparison is difficult. However, a broader analysis of the Air Force's annual spending on aircraft sustainment and parts could provide context on the relative scale of this award within their overall budget.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: $26,422,131

Exercised Options: $26,422,131

Current Obligation: $26,419,539

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $7,077,649

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