L3Harris Technologies awarded $83.8M for Other Aircraft Parts, with no competition

Contract Overview

Contract Amount: $83,786,275 ($83.8M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2018-06-27

End Date: 2022-12-31

Contract Duration: 1,648 days

Daily Burn Rate: $50.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACAT III BIG SAFARI

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $83.8 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: ACAT III BIG SAFARI Key points: 1. Contract awarded on a sole-source basis, raising concerns about price discovery and potential overpayment. 2. The contract duration of over 4 years suggests a long-term need for these aircraft parts. 3. Awarded to L3Harris Technologies, a major defense contractor with a significant presence in the sector. 4. The firm-fixed-price contract type shifts risk to the contractor, which can be beneficial if priced appropriately. 5. Lack of competition limits opportunities for other suppliers and potentially higher-value solutions. 6. The contract's value is substantial, indicating a significant role in supporting defense aviation assets.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids. The $83.8 million award for 'Other Aircraft Parts' over a 1648-day period suggests a significant investment. Without comparable contract data or market analysis for these specific parts, it's difficult to definitively assess if the pricing represents good value for money. The absence of competition means there was no market pressure to drive down costs, potentially leading to a higher price than if multiple vendors had vied for the contract.

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 considered. The justification for sole-source procurement typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without further details on the specific parts and the procurement rationale, it's impossible to assess the extent of competition. This approach bypasses the standard competitive bidding process, which is designed to ensure the government receives the best possible price and quality.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding. This can result in higher overall spending for the same goods or services.

Public Impact

The primary beneficiaries are likely the U.S. Department of Defense, specifically units relying on the aircraft supported by these parts. The contract delivers essential aircraft parts, crucial for maintaining the operational readiness of defense aviation assets. The geographic impact is primarily within Texas, where the contractor is located, but the ultimate impact is national defense readiness. The contract supports jobs within L3Harris Technologies and its supply chain, contributing to the aerospace and defense manufacturing workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification makes it difficult to verify necessity.
Long contract duration could lead to price increases if market conditions change significantly.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Award to an established contractor like L3Harris suggests a level of confidence in their capability.
Contract supports critical defense aviation assets, contributing to national security.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a critical component of the broader aerospace and defense industry. This contract falls within the defense sub-sector, supplying essential components for military aircraft. The market for such parts is often characterized by high technical requirements, stringent quality control, and long product lifecycles. Spending in this area is directly tied to defense budgets and the operational needs of military branches. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar aircraft components across different defense platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, L3Harris Technologies, is a large business. This suggests that small businesses are unlikely to be direct beneficiaries of this award. However, L3Harris may engage small businesses as subcontractors, though this is not explicitly detailed in the provided data. The absence of a set-aside means opportunities for small businesses to compete directly for this significant contract were limited.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and program management offices, potentially with support from the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified parts at an agreed-upon price. Transparency regarding the sole-source justification and performance metrics would be key areas for oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Aviation Support
Aerospace Component Supply
Military Aircraft Maintenance

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $83.8 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $83.8 million.

What is the period of performance?

Start: 2018-06-27. End: 2022-12-31.

What specific aircraft or systems does this contract support?

The provided data indicates the contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) and was awarded to L3Harris Technologies. However, it does not specify the exact aircraft platforms or defense systems these parts are intended for. Typically, such contracts support a range of military aircraft, from tactical fighters to transport planes or helicopters, depending on the contractor's specialization and the agency's needs. Further investigation into L3Harris's product lines and the specific requirements of the awarding DoD component would be necessary to identify the supported systems.

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

The data explicitly states the contract was 'NOT COMPETED' (ct: NOT COMPETED), indicating a sole-source award. The specific justification is not provided in the abbreviated data. Common reasons for sole-source awards include: the item is available only from a single source; a national emergency exists; or the agency expressly authorizes non-competitive procurement after a finding that competition is inadequate. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to determine the precise rationale. This lack of competition raises concerns about potential overpricing and missed opportunities for better value.

How does the contract value of $83.8 million compare to similar sole-source awards for aircraft parts?

Comparing the $83.8 million value requires context regarding the specific types of aircraft parts and their complexity. Sole-source awards for specialized or high-technology aircraft components can indeed reach tens or hundreds of millions of dollars, especially over multi-year periods. However, without knowing the exact nature of the 'other aircraft parts,' direct comparison is difficult. Generally, sole-source contracts are expected to be priced higher than competitively procured ones. Benchmarking would involve analyzing the unit costs, quantities, and duration against other sole-source awards for similar complexity parts, if such data were publicly available and comparable.

What is L3Harris Technologies' track record with sole-source defense contracts?

L3Harris Technologies is a major defense contractor, and like many large companies in this sector, it has a history of receiving both competitive and sole-source awards. Sole-source awards often arise from existing relationships, proprietary technology, or specific integration requirements where L3Harris is the incumbent or sole provider. Analyzing their broader contract portfolio would reveal the frequency and value of their sole-source awards. A pattern of frequent sole-source awards, particularly without strong justifications, could indicate a reduced incentive for competitive pricing across their contracts.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risk with a sole-source contract of $83.8 million is the potential for inflated pricing due to the absence of competition. Taxpayers may end up paying more than necessary for the aircraft parts. Another risk is a lack of innovation, as the sole contractor may have less incentive to improve products or processes compared to a competitive environment. Furthermore, dependency on a single supplier can create supply chain vulnerabilities if the contractor faces production issues or financial instability. Ensuring robust oversight and performance monitoring becomes even more critical in sole-source situations.

How does the firm-fixed-price (FFP) contract type mitigate risks for the government in this sole-source scenario?

The Firm Fixed Price (FFP) contract type is generally favorable for the government, especially in sole-source situations. It establishes a ceiling price that the contractor must adhere to, regardless of their actual costs. This means that if L3Harris Technologies incurs higher-than-expected costs in producing these aircraft parts, the government is protected from those overruns. The contractor bears the financial risk. However, the initial price negotiated in an FFP contract is crucial. In a sole-source context, the government must ensure the negotiated FFP is fair and reasonable, as there was no competitive pressure to establish that price.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: $83,786,275

Exercised Options: $83,786,275

Current Obligation: $83,786,275

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $79,800,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline