L3Harris Technologies awarded $59M for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $58,959,068 ($59.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2019-10-01

End Date: 2022-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $53.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

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 $59.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded via other than full and open competition, limiting price discovery. 2. Significant contract value for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. 3. Performance period spans three years, indicating a substantial need. 4. Contract type is Time and Materials, which can pose cost control challenges. 5. Awarded by the Department of the Air Force, a major defense spender. 6. Texas-based contractor, potentially impacting local economic contributions. 7. No small business set-aside, suggesting a focus on larger prime contractors.

Value Assessment

Rating: questionable

The contract's value of approximately $59 million for aircraft parts requires careful benchmarking. Without a competitive bidding process, it is difficult to ascertain if the pricing reflects fair market value. The Time and Materials (T&M) contract type, while offering flexibility, can lead to cost overruns if not managed rigorously. Comparing this to similar sole-source or limited-competition awards for comparable aircraft components would be necessary to assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using other than full and open competition, meaning it was not widely advertised or competed among multiple potential vendors. The specific justification for this limited competition is not provided but typically involves factors like urgency, proprietary technology, or lack of available sources. The absence of a competitive process means that the government did not benefit from the price reductions and innovation that typically arise from multiple bidders vying for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without multiple bids, there is a reduced incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are likely the Department of the Air Force, ensuring the availability of critical aircraft parts. Services delivered include the provision of parts and potentially related support for aircraft maintenance and operations. The geographic impact is centered around the contractor's operations in Texas, with potential downstream effects on the national aerospace supply chain. Workforce implications may include employment opportunities within L3Harris Technologies and its subcontractors, particularly in specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
Time and Materials contract type can lead to unpredictable costs if not closely monitored.
The specific nature of the 'Other Aircraft Parts' is not detailed, making it hard to assess necessity and potential alternatives.
The absence of small business involvement could limit opportunities for smaller, specialized suppliers.

Positive Signals

The contract ensures the continued operational readiness of Air Force aircraft by securing necessary parts.
L3Harris Technologies is a known entity in the aerospace and defense sector, suggesting a level of established capability.
The three-year duration indicates a sustained need and potential for a stable supply chain.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a critical component of the broader aerospace and defense industry. This industry is characterized by high technological barriers to entry, stringent quality control requirements, and significant government procurement. Spending in this area is often driven by military readiness and modernization programs. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar specialized aircraft components within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. This suggests that the primary contract was awarded directly to L3Harris Technologies, a large business. While large prime contractors are sometimes required to subcontract a portion of their work to small businesses, this is not explicitly stated here. The lack of a direct set-aside means that opportunities for small businesses to compete for this specific award were likely limited, potentially impacting the broader small business ecosystem within this defense sub-sector.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Given the Time and Materials nature, rigorous monitoring of labor hours and material costs would be essential. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is limited due to the sole-source award, making public oversight more challenging.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Defense Logistics Agency (DLA) Procurement
Air Force Sustainment and Maintenance Contracts
Aerospace Component Supply Chain Management

Risk Flags

Sole-source award
Time and Materials contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.0 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 $59.0 million.

What is the period of performance?

Start: 2019-10-01. End: 2022-09-30.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded via 'NOT COMPETED', which is synonymous with a sole-source or limited-competition award. The specific justification for this approach is not detailed in the provided data. Typically, sole-source awards are justified when only one responsible source is available, or when there is a compelling urgency, or when the acquisition is for a unique product or service for which adequate competition cannot be secured. Without further documentation from the agency (e.g., a Justification and Approval document), the precise reason remains unknown. This lack of transparency is a common concern with sole-source contracts, as it limits the public's ability to understand why competitive processes were bypassed.

How does the Time and Materials (T&M) contract type compare to other contract types for similar procurements?

Time and Materials (T&M) contracts are used when the government cannot accurately estimate the extent or duration of the work. They reimburse the contractor for direct labor hours at specified fixed hourly rates and for the actual cost of materials. Compared to fixed-price contracts, T&M offers more flexibility but carries higher risk for the government regarding cost control, as the final price is not known upfront. For procurements involving aircraft parts, fixed-price contracts (like Firm-Fixed-Price or Fixed-Price Incentive) are often preferred when the scope of work is well-defined, as they provide greater cost certainty. However, if the procurement involves significant uncertainty in labor or material needs, or if it's for services where effort is hard to predict, T&M might be deemed necessary. The key concern with T&M is the need for robust government oversight to manage labor rates and material costs effectively.

What is L3Harris Technologies' track record with similar sole-source defense contracts?

L3Harris Technologies is a major defense contractor with a substantial history of receiving various contract awards, including those awarded through other than full and open competition. Analyzing their specific track record with sole-source contracts for aircraft parts would require a deeper dive into historical contract databases. Generally, large, established defense contractors often have a significant portion of their portfolio awarded through non-competitive means due to specialized capabilities, existing system integration, or long-standing relationships. However, the frequency and value of such awards, especially for specific component types, can vary. A review of past performance and any associated issues (e.g., cost overruns, quality problems) on similar sole-source awards would be crucial for a comprehensive assessment.

What are the potential risks associated with a $59 million contract for 'Other Aircraft Parts' awarded non-competitively?

The primary risks associated with a $59 million non-competitive contract for 'Other Aircraft Parts' include: 1. **Cost Overruns:** Without competitive pressure, the contractor may not be incentivized to minimize costs, and the T&M structure can exacerbate this. 2. **Lack of Innovation:** The absence of multiple bidders means the government misses out on potentially innovative solutions or more cost-effective alternatives that other companies might offer. 3. **Quality Concerns:** While L3Harris is a reputable firm, any contract, especially sole-source, requires diligent quality assurance to ensure parts meet stringent military specifications. 4. **Dependency:** Over-reliance on a single source can create vulnerabilities in the supply chain if the contractor faces production issues. 5. **Reduced Accountability:** The justification for sole-source awards can sometimes be less rigorous, potentially masking underlying issues with program planning or market research.

How does this contract's value compare to historical spending on aircraft parts by the Department of the Air Force?

The Department of the Air Force (DAF) spends billions of dollars annually on aircraft parts, maintenance, and sustainment. A single contract valued at approximately $59 million, while substantial, represents a fraction of the DAF's total aircraft parts expenditure. To assess its comparability, one would need to analyze historical spending trends for similar categories of aircraft parts (e.g., specific avionics, structural components, engine parts) and contract types (sole-source vs. competitive). If the DAF frequently awards contracts in this range for similar items, it might indicate a standard procurement practice. However, if this $59 million award is significantly higher than comparable historical awards for similar parts, especially considering it was non-competitive, it would warrant further scrutiny regarding value for money.

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: TIME AND MATERIALS (Y)

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: $60,938,251

Exercised Options: $60,938,251

Current Obligation: $58,959,068

Actual Outlays: $6,064,240

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