L3Harris Technologies awarded $36.7M for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $36,748,718 ($36.7M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2019-09-30

End Date: 2021-11-30

Contract Duration: 792 days

Daily Burn Rate: $46.4K/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 $36.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded via "not competed" route, limiting price discovery and potentially increasing costs. 2. Significant contract value suggests a critical need for these aircraft parts. 3. The fixed-price contract type offers some cost certainty but may not fully capture efficiencies. 4. Performance period spans over two years, indicating a sustained requirement. 5. The award to L3Harris Technologies, a major defense contractor, places this within a concentrated industry landscape. 6. Lack of competition raises concerns about whether the government secured the best possible price. 7. The 'Other Aircraft Parts' NAICS code suggests a broad category, making direct benchmarking difficult without more specificity.

Value Assessment

Rating: questionable

The contract's value of $36.7 million is substantial, but without a competitive bidding process, it is difficult to assess if this represents fair market value. Benchmarking is challenging due to the broad NAICS code and the lack of disclosed comparable contracts. The firm fixed-price structure provides some cost control, but the absence of competition means potential savings from a robust bidding environment were likely forgone. Further analysis would require understanding the specific parts procured and their market prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'not competed' procedure, indicating that the Department of the Air Force did not solicit offers from multiple sources. This approach is typically reserved for situations where only one source can fulfill the requirement, or in specific emergency circumstances. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The absence of competition means taxpayers may have paid a premium for these aircraft parts, as there was no market pressure to drive down prices. This award highlights a missed opportunity to leverage market forces for cost savings.

Public Impact

The primary beneficiaries are likely the Department of the Air Force, ensuring operational readiness of its aircraft fleet. The services delivered are the provision of critical aircraft parts, essential for maintenance and repair operations. The geographic impact is centered around the Air Force's operational bases, primarily in Texas where the contractor is located. Workforce implications may include sustained employment at L3Harris Technologies and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding could lead to inflated prices and reduced value for taxpayer dollars.
The broad 'Other Aircraft Parts' category makes it difficult to ascertain if the most cost-effective solutions were pursued.
Sole-source awards can create dependency on a single contractor, potentially limiting future flexibility and innovation.
Without transparency into the justification for sole-sourcing, it's hard to confirm necessity and prevent potential abuse.

Positive Signals

The firm fixed-price contract type offers cost certainty for the government, assuming the price was negotiated reasonably.
L3Harris Technologies is a known entity in the defense sector, suggesting a degree of familiarity and established capabilities.
The contract duration of over two years indicates a stable, long-term requirement, potentially allowing for economies of scale in production.
The award is associated with a specific agency (Department of the Air Force), implying a clear mission-related purpose.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category, which is a crucial segment supporting the operational readiness of military aviation. Spending in this area is often driven by specific platform needs and sustainment requirements. While precise market size for this specific sub-category is difficult to pinpoint without more detail, the overall defense aerospace manufacturing market is substantial, with billions spent annually on aircraft components and sustainment.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting plans. As a sole-source award to a large prime contractor, it is unlikely to directly benefit small businesses through set-aside provisions. The primary impact on the small business ecosystem would be indirect, through potential subcontracting opportunities if L3Harris chooses to engage small business suppliers, which is not guaranteed or mandated by the contract terms.

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 caps the government's liability. Transparency is limited due to the sole-source nature of the award and the lack of public justification details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair Services
Defense Logistics Agency Procurement
Air Force Sustainment Programs
Aerospace Component Manufacturing
Fixed-Wing Aircraft Parts

Risk Flags

Sole-source award lacks transparency and competitive pricing.
Broad NAICS code hinders specific value assessment.
Potential for contractor lock-in and price escalation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.7 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 $36.7 million.

What is the period of performance?

Start: 2019-09-30. End: 2021-11-30.

What specific aircraft parts were procured under this contract, and what is their criticality to Air Force operations?

The provided data indicates the contract falls under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This broad classification suggests the parts could range from engine components and avionics to structural elements and landing gear. Without further details, it's impossible to identify the specific parts. However, given the substantial value ($36.7M) and the sole-source award by the Department of the Air Force, it can be inferred that these parts are critical for maintaining the operational readiness and safety of specific Air Force aircraft platforms. The duration of the contract (792 days) also suggests a sustained need for these components, likely for ongoing maintenance, repair, and overhaul (MRO) activities rather than a one-time procurement.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The data explicitly states the contract type as 'NOT COMPETED,' which is synonymous with a sole-source award. The specific justification for this determination is not provided in the data. Typically, sole-source awards are justified under circumstances such as: only one responsible source exists to fulfill the requirement (e.g., proprietary technology or unique capabilities); an urgent and compelling need exists that would cause unacceptable delays if competed; or for follow-on work to a previously competed contract where it's deemed most efficient. Without the official justification document (often a Justification and Approval or J&A), it's impossible to confirm the Air Force's rationale. This lack of transparency is a common concern with sole-source procurements.

How does the awarded price of $36.7 million compare to market rates or similar contracts for aircraft parts?

Directly comparing the $36.7 million award to market rates or similar contracts is challenging with the limited information provided. The NAICS code 336413 is very broad, encompassing a wide array of aircraft parts with vastly different price points and complexities. Furthermore, the contract was awarded on a sole-source basis, meaning there was no competitive bidding to establish a market-driven price. To perform a robust comparison, one would need to identify the specific parts procured, their technical specifications, the quantities ordered, and then benchmark these against publicly available pricing data, other government contracts for similar items (if available and competed), or commercial price lists. The absence of this detail makes a definitive value-for-money assessment difficult.

What is L3Harris Technologies' track record with the Department of Defense, particularly in supplying aircraft parts?

L3Harris Technologies is a major defense contractor with a significant history of supplying various systems, components, and services to the Department of Defense (DoD). While the specific data here focuses on one contract, L3Harris (and its predecessor companies) has routinely been awarded numerous contracts across different branches of the military for a wide range of products, including aerospace components, electronic systems, and communication equipment. Their track record generally involves fulfilling complex requirements for military platforms. However, like any large contractor, specific contract performance can vary. A deeper dive into their contract history, including past performance evaluations, on-time delivery rates, and any past disputes or issues related to aircraft parts, would be necessary for a comprehensive assessment of their specific track record on this type of procurement.

What are the potential risks associated with this contract, given its sole-source nature and the specific industry?

The primary risk associated with this sole-source contract is the potential for overpayment due to the lack of competition. Without competing bids, the government may not have secured the lowest possible price for the parts. Another risk is contractor dependency; if L3Harris is the only viable source for these specific parts, the Air Force could be locked into potentially escalating costs or unfavorable terms in future procurements. In the defense industry, supply chain disruptions or quality control issues can also pose risks, although L3Harris's established presence suggests a degree of reliability. The broad nature of the NAICS code also introduces a risk of ambiguity regarding the exact nature and criticality of the parts, potentially masking underlying issues.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

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: $36,748,718

Exercised Options: $36,748,718

Current Obligation: $36,748,718

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline