DoD's $45.4M L3Harris contract for aircraft parts shows limited competition and potential value concerns

Contract Overview

Contract Amount: $45,449,623 ($45.4M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2018-12-18

End Date: 2022-12-31

Contract Duration: 1,474 days

Daily Burn Rate: $30.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BIG SAFARI

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $45.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded via a sole-source justification, raising questions about price discovery and potential overpayment. 2. The contract duration of over four years suggests a long-term need for these specialized aircraft parts. 3. Limited competition may indicate a lack of market alternatives or a strategic decision to use a specific supplier. 4. The firm-fixed-price structure aims to control costs, but without competition, actual value is harder to ascertain. 5. Performance context is limited, but the duration implies a critical role in supporting Air Force operations. 6. Sector positioning is within specialized aircraft parts manufacturing, a niche but vital area for defense readiness.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of the aircraft parts. Without competitive bids, it's difficult to definitively assess if the $45.4 million represents a fair market price. The firm-fixed-price contract type provides some cost certainty, but the lack of competition means there's less pressure on the contractor to offer the most competitive pricing. Further analysis would require comparing the unit costs of these specific parts to similar components or historical pricing for L3Harris, if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The justification for this approach is not detailed in the provided data, but sole-source awards typically occur when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that taxpayers did not benefit from the price reductions that can arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible prices, potentially leading to higher costs for taxpayers. The absence of competition means there's no market pressure to drive down prices.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives critical aircraft parts for its operations. The contract supports the maintenance and operational readiness of specific Air Force aircraft fleets. The geographic impact is primarily within Texas, where L3Harris Technologies Integrated Systems L.P. is located. Workforce implications include job retention and potential growth at the contractor's facility in Texas.

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 justification for sole-sourcing raises concerns about due diligence.
Long contract duration without clear performance metrics makes ongoing value assessment difficult.
Specialized nature of parts could create vendor lock-in, reducing future negotiating power.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established contractor like L3Harris suggests a level of trust and prior performance.
The contract supports critical defense needs, contributing to national security.
Long-term nature of the contract may ensure consistent supply of essential components.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized defense components is often characterized by high barriers to entry due to technical expertise, stringent quality requirements, and long development cycles. While the overall defense spending is substantial, contracts for niche parts like these represent a smaller, but critical, segment. Benchmarking against similar sole-source contracts for specialized aircraft components would be necessary for a more precise value assessment.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Given the sole-source nature and the specialized manufacturing involved, it is less likely that small business subcontracting opportunities were a primary consideration or requirement. This contract may not significantly impact the small business ecosystem unless L3Harris has its own small business subcontracting program that extends to this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified parts at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, as the justification and negotiation details are not publicly disclosed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics and Support
Aerospace Component Procurement
Air Force Sustainment Programs

Risk Flags

Sole-source award
Lack of competition
Potential for price overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. 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 $45.4 million.

What is the period of performance?

Start: 2018-12-18. End: 2022-12-31.

What is the specific type of aircraft parts being procured under this contract, and what is their criticality to Air Force operations?

The provided data classifies the contract under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413). While the exact nature of the parts is not specified, their procurement by the Department of the Air Force suggests they are critical for the maintenance, repair, and operational readiness of specific aircraft platforms. These could range from engine components, structural elements, avionics parts, or specialized systems. The long duration (over four years) and significant value ($45.4 million) imply these are not common off-the-shelf items but rather specialized components essential for sustained flight operations, potentially for aging fleets or unique mission requirements.

What was the justification for awarding this contract on a sole-source basis instead of through a competitive process?

The data explicitly states the contract was 'NOT COMPETED'. While the specific justification is not provided, common reasons for sole-source awards include: (1) only one responsible source exists capable of providing the supplies or services (e.g., proprietary technology, unique expertise); (2) an urgent and compelling need that would result in unacceptable delays if a competitive process were followed; or (3) specific statutory authority that restricts competition. Without further documentation, it's impossible to determine the exact reason, but it implies that a competitive bidding process was deemed impractical or impossible for this particular procurement.

How does the $45.4 million contract value compare to similar sole-source procurements for aircraft parts within the DoD?

Direct comparison of this $45.4 million sole-source contract to similar procurements is difficult without access to a comprehensive database of sole-source defense contracts for specialized aircraft parts. However, for context, large sole-source contracts in the defense sector can range from tens of millions to billions of dollars, depending on the complexity and criticality of the item. The value here suggests a significant, long-term need for these specific components. To assess value for money, one would ideally compare the unit price of these parts to historical prices paid by the DoD for the same or similar parts, or to prices charged by other manufacturers if such information were available, which is unlikely for a sole-source award.

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

The primary risks associated with a sole-source contract of this magnitude ($45.4 million) and duration (over four years) include: 1. **Price Escalation:** Without competition, the contractor has less incentive to offer the lowest possible price, potentially leading to overpayment. 2. **Lack of Innovation:** The absence of competitive pressure may stifle innovation from the contractor. 3. **Vendor Lock-in:** The government may become dependent on a single supplier, making it difficult to switch even if better alternatives emerge. 4. **Reduced Oversight Effectiveness:** While oversight mechanisms exist, the lack of competitive benchmarks can make it harder to identify inefficiencies or questionable pricing. 5. **Potential for Quality Issues:** Although less common with established contractors, the absence of competitive quality benchmarking could theoretically mask subtle quality degradation over time.

What is L3Harris Technologies' track record with the Department of Defense, particularly concerning sole-source awards?

L3Harris Technologies is a major defense contractor with a substantial history of receiving contracts from the Department of Defense across various sectors, including aerospace, communications, and electronic systems. While specific data on their sole-source award history is not provided here, it is common for large, established defense companies to receive sole-source awards for specialized systems or components where they possess unique capabilities or intellectual property. Their overall track record with the DoD is generally extensive, involving numerous competitive and sole-source contracts. A deeper dive into contract databases like FPDS or SAM.gov would be needed to analyze their specific performance metrics and history with sole-source procurements.

Industry Classification

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

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: $45,449,623

Exercised Options: $45,449,623

Current Obligation: $45,449,623

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $3,730,375

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