L3Harris awarded $22M for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $21,992,558 ($22.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2019-01-31

End Date: 2023-06-30

Contract Duration: 1,611 days

Daily Burn Rate: $13.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

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 $22.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Significant contract duration of over 4 years. 3. Cost-plus-fixed-fee structure may incentivize higher costs. 4. No indication of small business participation. 5. Contractor is a large, established defense supplier. 6. Spending concentrated in Texas.

Value Assessment

Rating: questionable

The total award of over $22 million for aircraft parts and auxiliary equipment is substantial. However, without competitive bidding, it is difficult to benchmark the value for money. The cost-plus-fixed-fee contract type, while potentially useful for undefined scopes, can lead to higher overall costs compared to fixed-price contracts if not managed rigorously. The lack of transparency in pricing due to the sole-source nature makes a direct comparison to similar contracts challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating a sole-source procurement. This means only one vendor, L3Harris Technologies Integrated Systems L.P., was solicited. The lack of competition means there was no opportunity for other qualified vendors to bid, potentially leading to higher prices and reduced innovation. The rationale for not competing is not provided in the data.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs. The government did not benefit from the potential cost savings and improved terms that a competitive bidding process typically yields.

Public Impact

The Department of the Air Force benefits from the acquisition of necessary aircraft parts and auxiliary equipment. The contract supports the operational readiness and maintenance of Air Force aircraft. The primary beneficiary is the contractor, L3Harris Technologies Integrated Systems L.P., a large defense manufacturer. Geographic impact is concentrated in Texas, where the contractor's facility is located. Workforce implications are likely within L3Harris's existing manufacturing and support operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment.
Cost-plus-fixed-fee structure can lead to cost overruns if not closely monitored.
Long contract duration increases the risk of price escalation over time.
Absence of small business set-aside suggests limited opportunities for smaller enterprises.

Positive Signals

Contract awarded to a known entity, L3Harris Technologies, suggesting a potentially reliable supplier.
The contract addresses a specific need for aircraft parts, indicating a clear requirement.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high technological demands, stringent quality control, and significant government procurement. The market size is substantial, driven by military and commercial aviation needs. L3Harris is a major player in this space. Benchmarking spending is difficult without knowing the specific parts, but overall defense spending on aircraft components is in the billions annually.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). As a sole-source award to a large corporation, there are no explicit subcontracting requirements for small businesses mentioned. This means that opportunities for small businesses to participate in this specific contract are likely minimal, potentially excluding them from a significant portion of the defense supply chain for these parts.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer and the relevant Air Force program office. The cost-plus-fixed-fee structure necessitates close monitoring of costs incurred by the contractor to ensure they are reasonable and allowable. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Manufacturing
Defense Procurement
Supply Chain Management

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration
Lack of small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.0 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 $22.0 million.

What is the period of performance?

Start: 2019-01-31. End: 2023-06-30.

What is L3Harris Technologies Integrated Systems L.P.'s track record with the Department of Defense, particularly for similar aircraft parts contracts?

L3Harris Technologies Integrated Systems L.P. has a significant history of contracting with the Department of Defense, often in areas related to aerospace systems, electronics, and support services. While specific data on their track record for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' under this exact contract type and value is not detailed here, the company is a well-established defense contractor. Their performance on previous contracts would be a key factor in the government's decision to award this contract, even if sole-source. A review of their past performance ratings, any past performance issues, and the types of contracts they have successfully executed would provide further insight into their reliability and capability for fulfilling this requirement.

How does the $22 million award compare to historical spending on similar aircraft parts by the Air Force?

Direct comparison of this $22 million award to historical spending on similar aircraft parts is challenging without more specific details on the exact nature of the 'aircraft parts and auxiliary equipment' procured. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category is broad. However, the Department of Defense, and specifically the Air Force, spends billions annually on aircraft sustainment, maintenance, and component manufacturing. A $22 million contract for parts, especially if it covers a multi-year period or specialized components, is a significant but not extraordinary amount within the context of overall Air Force aviation spending. The lack of competition makes it difficult to assess if this specific award represents a favorable price point compared to what could have been achieved through bidding.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for aircraft parts?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for aircraft parts are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to be cost-efficient. The government may end up paying more than necessary. Secondly, the CPFF structure, while providing flexibility, carries inherent risks. The contractor is reimbursed for allowable costs plus a fixed fee, which can incentivize higher spending as the fee remains constant regardless of the total cost. This necessitates robust government oversight to scrutinize costs and prevent unnecessary expenditures. For critical aircraft parts, the risk of supply chain disruption or quality issues is also present, though mitigated by awarding to an established supplier.

What does the duration of the contract (1611 days) imply about the nature of the requirement and potential future spending?

A contract duration of 1611 days, approximately 4.4 years, implies that the requirement for these aircraft parts and auxiliary equipment is long-term and ongoing, rather than a one-time purchase. This suggests a sustained need for sustainment, maintenance, or integration of specific systems within the Air Force's fleet. Such a long duration for a sole-source award can increase the risk of price escalation over time, especially if the fixed fee does not adequately account for inflation or changes in material costs. It also indicates a significant commitment from the government to this particular supplier for an extended period, potentially limiting flexibility to seek alternative solutions or suppliers should needs or market conditions change.

Given the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' classification, what types of specific items might this contract cover?

The classification 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' is broad and can encompass a wide range of components beyond standard engine or airframe parts. This could include specialized electronic components, avionics, hydraulic or pneumatic systems parts, landing gear components, interior furnishings, or even specific sub-assemblies. Auxiliary equipment might refer to ground support equipment, testing apparatus, or specialized tools related to aircraft operation and maintenance. Without further details, it's difficult to pinpoint the exact items, but the classification suggests items that are not primary structural or propulsion components but are essential for the overall function, operation, and maintenance of aircraft.

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: 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: $22,042,135

Exercised Options: $22,042,135

Current Obligation: $21,992,558

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $7,473,318

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline