DoD's $52M L3Harris contract for engineering services awarded without competition

Contract Overview

Contract Amount: $52,014,537 ($52.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2019-12-13

End Date: 2021-12-13

Contract Duration: 731 days

Daily Burn Rate: $71.2K/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: ROCKWALL, ROCKWALL County, TEXAS, 75032

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $52.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market exploration. 2. The fixed-price contract structure aims to control costs, but the lack of competition may hinder optimal value. 3. Performance period of two years suggests a focused scope, but long-term implications are unclear. 4. The contract falls under engineering services, a broad category with varying market dynamics. 5. Geographic location in Texas for contract performance. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this $52 million contract is challenging due to its sole-source nature and the broad 'engineering services' category. Without competitive bids, it's difficult to ascertain if L3Harris Technologies Integrated Systems L.P. provided the best possible price for the services rendered. The firm-fixed-price structure offers some cost certainty, but the absence of competition means there's no direct market comparison to assess if the pricing is aligned with industry standards or if a more cost-effective solution could have been found through a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically employed when only one vendor possesses the unique capabilities or resources required for the specific service. The lack of competition means that the Department of Defense did not benefit from the price discovery and innovation that typically arises from a bidding process. This raises concerns about whether the government secured the most advantageous terms possible.

Taxpayer Impact: Taxpayers may have paid a premium for these engineering services due to the absence of competitive pressure. The government's ability to negotiate favorable pricing is diminished when only one provider is considered.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving engineering services essential for its operations. The contract supports critical engineering functions, likely contributing to the development, maintenance, or enhancement of defense systems. Services are performed in Texas, potentially impacting the local economy and workforce in that region. The contract may involve specialized technical expertise, contributing to the advancement of defense technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to inflated pricing.
Sole-source awards can limit access to innovative solutions from other market players.
Transparency concerns due to non-competitive nature.

Positive Signals

Firm-fixed-price contract type provides cost predictability.
L3Harris is a known entity in the defense sector, suggesting established capabilities.
Contract duration of two years allows for focused execution.

Sector Analysis

The engineering services sector is vast and critical to government operations, particularly in defense. This contract, valued at approximately $52 million, represents a portion of the Department of Defense's broader spending on technical and professional services. While specific market size data for this niche is not provided, the overall federal spending on engineering and research services runs into billions annually. This contract fits within the defense industry's need for specialized technical support to maintain and advance its complex systems.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The sole-source award to L3Harris Technologies Integrated Systems L.P., a large defense contractor, means that opportunities for small businesses to participate in this specific contract were likely minimal. This approach does not actively contribute to the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, the justification for this approach would be documented and subject to review. Transparency is limited by the non-competitive nature, but contract performance metrics and financial expenditures would still be monitored. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Engineering Services
Department of the Air Force Contracts
L3Harris Technologies Contracts
Sole Source Procurements
Firm Fixed Price Contracts

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.0 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 $52.0 million.

What is the period of performance?

Start: 2019-12-13. End: 2021-12-13.

What is the track record of L3Harris Technologies Integrated Systems L.P. with the Department of Defense, particularly in engineering services?

L3Harris Technologies Integrated Systems L.P. is a significant defense contractor with a substantial history of performing various services for the Department of Defense. While specific details on their track record for 'engineering services' under this particular contract are not provided in the abbreviated data, the company is known for its expertise in areas such as aerospace, communications, electronic warfare, and information systems. Their past performance with the DoD would have been a key consideration, even in a sole-source award, to ensure they possess the necessary qualifications and experience to fulfill the contract requirements effectively. A deeper dive into their contract history would reveal the scope and success of previous engagements.

How does the $52 million value of this contract compare to similar engineering service contracts awarded by the Department of Defense?

The $52 million value for this two-year engineering services contract is a substantial figure, placing it in the mid-to-large range for individual service contracts. However, without specific details on the scope of 'engineering services' provided, direct comparison is difficult. The Department of Defense awards numerous contracts for engineering support, ranging from small, specialized tasks to massive, multi-year programs. Contracts for complex system design, integration, or sustainment can easily reach hundreds of millions or even billions of dollars. This $52 million award appears to be for a significant, but not exceptionally large, engineering support effort within the DoD's overall portfolio. Its sole-source nature further complicates direct value benchmarking against competitively awarded contracts.

What are the primary risks associated with awarding a $52 million contract on a sole-source basis for engineering services?

The primary risks associated with a sole-source award of this magnitude include potential overpayment due to the lack of competitive pricing pressure, limited access to potentially more innovative solutions from other vendors, and reduced transparency in the procurement process. Taxpayers may not receive the best value for their money if the selected contractor does not face market competition. There's also a risk that the government's specific needs might not be as precisely met as they could have been through a competitive process where vendors tailor proposals to detailed requirements. Furthermore, sole-source awards can sometimes signal a lack of adequate market research or planning.

What does the 'Engineering Services' classification (NAICS 541330) typically encompass within the Department of Defense?

The 'Engineering Services' classification (NAICS 541330) within the Department of Defense is broad and encompasses a wide range of professional services related to the application of engineering principles. This can include research and development, design, analysis, testing, and consulting services for various defense systems, platforms, and infrastructure. For the DoD, this often involves specialized engineering for aircraft, naval vessels, ground vehicles, weapons systems, communication networks, and cybersecurity. It can also extend to project management, systems integration, technical support, and lifecycle management of complex defense assets. The specific nature of the services under this contract would dictate the precise engineering disciplines involved.

What is the significance of the contract being awarded as 'NOT COMPETED'?

The designation 'NOT COMPETED' signifies that the contract was awarded without a full and open competitive process. This typically occurs under specific justifications outlined in federal acquisition regulations, such as the existence of only one responsible source, urgent and compelling needs, or specific national security requirements. For taxpayers, this means that the government did not solicit bids from multiple potential suppliers. Consequently, there is a reduced assurance that the price paid is the lowest possible or that the most innovative solution was obtained. It necessitates a strong justification from the awarding agency to ensure the award was appropriate and in the government's best interest.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

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: 1655 SCIENCE PL, ROCKWALL, TX, 75032

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $76,211,763

Exercised Options: $54,053,687

Current Obligation: $52,014,537

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $4,705,337

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862019G4006

IDV Type: BOA

Timeline