DoD's $53.3M L3Harris Contract for Navigation Systems Faces Scrutiny for Lack of Competition

Contract Overview

Contract Amount: $53,354,885 ($53.4M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2021-12-31

End Date: 2024-12-31

Contract Duration: 1,096 days

Daily Burn Rate: $48.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PEACE PIONEER FOS III SUSTAINMENT CONTRACT

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $53.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: PEACE PIONEER FOS III SUSTAINMENT CONTRACT Key points: 1. Contract awarded on a sole-source basis, raising concerns about price discovery and potential overpayment. 2. The $53.3 million contract duration of 1096 days suggests a significant, long-term need for these navigation systems. 3. L3Harris Technologies Integrated Systems L.P. is the sole awardee, indicating a lack of broader market engagement. 4. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely monitored. 5. Performance context is limited due to the 'not available for competition' designation. 6. Sector positioning within 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' is highly specialized.

Value Assessment

Rating: questionable

Benchmarking the value of this $53.3 million contract is challenging due to its sole-source nature and the specific nature of the navigation systems. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The Cost Plus Fixed Fee structure, while common for complex R&D or sustainment, requires rigorous oversight to ensure costs remain reasonable and the fixed fee is appropriate for the effort involved. Comparisons to similar sole-source contracts for specialized navigation equipment would be necessary for a more robust assessment, but such data is not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly designated as 'not available for competition,' meaning a full and open competition was not conducted. L3Harris Technologies Integrated Systems L.P. is the sole awardee. This lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms. It suggests that either only one source was deemed capable of meeting the requirement, or the justification for sole-sourcing was accepted without exploring alternative solutions or bidders.

Taxpayer Impact: Taxpayers may be exposed to higher costs due to the absence of competitive pressure, potentially leading to less favorable pricing than if multiple vendors had vied for the contract.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically the Air Force, which relies on these navigation systems for operational readiness. The contract delivers sustainment services for critical navigation, guidance, and control systems essential for aircraft and potentially other defense platforms. The geographic impact is primarily within the United States, with potential implications for military bases and operations globally. Workforce implications include continued employment for specialized engineers, technicians, and support staff at L3Harris and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns without stringent oversight.
Lack of transparency regarding the justification for sole-sourcing hinders public accountability.
Specialized nature of the equipment may limit the pool of potential competitors, but this should be rigorously assessed.
Contract duration of nearly three years warrants close monitoring of performance and evolving needs.

Positive Signals

Award to an established contractor (L3Harris) suggests a degree of confidence in their capability to deliver.
The contract addresses a critical need for navigation systems, essential for defense operations.
Sustainment focus implies ongoing support, which can be crucial for maintaining operational readiness.
The contract is for a defined period, allowing for re-evaluation of competition at its conclusion.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a highly specialized segment of the aerospace and defense industry. This market is characterized by high barriers to entry, significant R&D investment, and stringent quality and performance requirements. Major players often have long-standing relationships with government agencies. Comparable spending benchmarks are difficult to establish without detailed knowledge of the specific systems being sustained, but contracts in this niche can range from tens to hundreds of millions of dollars depending on complexity and volume.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the specialized nature of navigation systems and the sole-source award to a large prime contractor, the direct impact on small businesses is likely limited to subcontracting opportunities. It is crucial to ensure that L3Harris actively seeks out and includes small businesses in its subcontracting plan to foster broader economic participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices within the Air Force. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee agreement, requiring detailed cost reporting and performance metrics. Transparency is limited by the sole-source nature, but contract award details are publicly available. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

DoD Navigation Systems Procurement
Air Force Avionics Sustainment
Aeronautical Instrument Manufacturing
Defense Navigation Technology Development
L3Harris Defense Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding justification
Potential for cost overruns
Limited transparency on pricing benchmarks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. PEACE PIONEER FOS III SUSTAINMENT CONTRACT

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 $53.4 million.

What is the period of performance?

Start: 2021-12-31. End: 2024-12-31.

What is L3Harris Technologies' track record with similar sole-source navigation system contracts for the Department of Defense?

L3Harris Technologies, and its predecessor companies, have a long history of providing complex systems to the Department of Defense, including navigation and avionics. While specific data on sole-source contracts for navigation system sustainment is not publicly detailed in this context, the company is a significant defense contractor with extensive experience in these areas. Analyzing past performance on other sole-source awards, particularly those involving Cost Plus Fixed Fee structures, would be necessary to fully assess their track record. This would involve reviewing past performance evaluations, any documented issues, and the overall success rate in meeting contract objectives and managing costs within similar agreements.

How does the $53.3 million contract value compare to other sustainment contracts for similar navigation systems?

Direct comparison of the $53.3 million contract value for sustainment of navigation systems is challenging without knowing the specific type and quantity of systems involved. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' category is broad. However, sustainment contracts for complex defense systems can easily reach tens or hundreds of millions of dollars over their lifecycle, especially if they involve specialized components, extensive testing, and long-term support. The fact that this is a sole-source award to L3Harris, a major defense contractor, suggests a potentially high-value, specialized requirement. A more precise comparison would require identifying the specific system and its criticality to Air Force operations.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee contract for navigation system sustainment?

The primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than could be achieved through open competition. The government may not be getting the best value for its money. Secondly, the CPFF structure, while allowing for flexibility in evolving requirements, can incentivize the contractor to incur higher costs, as their fee is a percentage of those costs. This necessitates robust government oversight to scrutinize costs, ensure efficiency, and prevent unnecessary expenditures. Without diligent monitoring, cost overruns are a significant risk, potentially escalating the total contract value beyond initial projections.

What is the expected effectiveness of the navigation systems being sustained under this contract?

The effectiveness of the navigation systems being sustained under this contract is presumed to be high, given their critical role in Department of Defense operations. These systems are essential for mission success, safety, and operational readiness of aircraft and potentially other platforms. The contract's focus on 'sustainment' implies that the systems are currently in use and require ongoing maintenance, repair, and technical support to ensure they continue to function as intended. While specific performance metrics are not detailed here, the Air Force's investment suggests a strong reliance on these systems' reliability and accuracy for their intended missions.

How has historical spending on navigation system sustainment by the Air Force trended over the past five years?

Analyzing historical spending trends for navigation system sustainment by the Air Force requires access to detailed procurement data beyond the scope of this single contract. Generally, spending in this area can fluctuate based on modernization programs, the aging of existing fleets, and evolving technological requirements. Contracts for sustainment are often long-term and can represent a significant portion of an agency's budget for specific equipment categories. Without specific data on Air Force spending patterns for navigation systems over the last five years, it's difficult to provide a precise trend. However, it is reasonable to assume consistent investment in maintaining critical operational capabilities.

What are the specific technical capabilities provided by L3Harris under this contract?

The contract specifies 'PEACE PIONEER FOS III SUSTAINMENT CONTRACT,' indicating it pertains to the sustainment of the Peace Pioneer system, likely an advanced navigation or avionics suite. L3Harris Technologies Integrated Systems L.P. is expected to provide a range of services including maintenance, repair, overhaul, technical support, and potentially software updates for these systems. The exact technical capabilities would encompass ensuring the continued operational readiness, accuracy, and reliability of the navigation and guidance components. This could involve diagnostics, component replacement, calibration, and ensuring compliance with evolving military standards and operational requirements.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

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: $55,863,782

Exercised Options: $55,863,782

Current Obligation: $53,354,885

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $4,297,212

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline