DoD's $54M BIG SAFARI contract to L3Harris for aircraft parts shows limited competition and potential value concerns

Contract Overview

Contract Amount: $53,973,699 ($54.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2020-07-24

End Date: 2025-11-30

Contract Duration: 1,955 days

Daily Burn Rate: $27.6K/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 $54.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The Cost Plus Fixed Fee (CPFF) pricing structure may incentivize cost overruns. 3. The duration of the contract (over 5 years) suggests a long-term need, but the lack of competition raises questions about sustained value. 4. The specific nature of 'Other Aircraft Parts' makes direct benchmarking difficult without further detail. 5. The contract is managed by the Air Force, indicating a focus on aviation readiness and sustainment. 6. The award to a single large contractor may limit opportunities for smaller, specialized suppliers in this niche.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without detailed cost breakdowns and comparisons to similar sole-source awards. The CPFF structure, while common for complex or uncertain projects, carries inherent risks of cost escalation. Benchmarking against market rates for 'Other Aircraft Parts' is challenging due to the broad category and lack of competition. The total award value of $53.97 million over nearly six years suggests a significant investment, but the absence of competitive bidding prevents a definitive assessment of whether this represents a fair and reasonable price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, L3Harris Technologies Integrated Systems L.P., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently reduce price competition and may lead to higher costs for the government compared to an open competition.

Taxpayer Impact: The lack of competition means taxpayers did not benefit from the potential cost savings that a competitive bidding process could have generated. This could result in a higher overall expenditure for the required aircraft parts and services.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives critical aircraft parts and support services to maintain its fleet. The contract supports the operational readiness of Air Force aircraft, ensuring mission capabilities. The geographic impact is primarily within Texas, where L3Harris Technologies Integrated Systems L.P. is located, potentially supporting local jobs and the regional economy. The contract likely sustains specialized manufacturing and technical expertise within the aerospace sector, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially inflates costs.
Cost Plus Fixed Fee structure may incentivize higher spending.
Broad 'Other Aircraft Parts' category lacks specificity for detailed cost analysis.
Long contract duration without competition raises concerns about sustained value for money.

Positive Signals

Award to an established contractor (L3Harris) suggests a degree of reliability and existing capability.
Contract supports critical Air Force aviation needs, contributing to national security.
The fixed fee component of CPFF provides some cost control compared to pure cost-plus contracts.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high technological complexity, significant R&D investment, and often long product lifecycles. Contracts for aircraft parts fall within this domain, requiring specialized materials, precision manufacturing, and stringent quality control. The market for such parts can be concentrated, with a few large prime contractors and numerous specialized suppliers. Government spending in this area is substantial, driven by the need to maintain aging fleets and develop next-generation aircraft. This contract with L3Harris fits within the broader landscape of defense sustainment spending, where ensuring parts availability and technical support is crucial for operational readiness.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by `ss: false` and `sb: false`. The award is to a large prime contractor, L3Harris Technologies. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem for this particular contract is unclear, though large prime contracts often do involve some level of subcontracting to smaller firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing would be expected to monitor costs and ensure the fixed fee is earned appropriately. Transparency is limited due to the sole-source nature and the proprietary details of aircraft parts manufacturing. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Parts Manufacturing
Defense Logistics Support
Air Force Sustainment Programs
Sole-Source Defense Contracts

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.0 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 $54.0 million.

What is the period of performance?

Start: 2020-07-24. End: 2025-11-30.

What is L3Harris Technologies Integrated Systems L.P.'s track record with sole-source DoD contracts, particularly for aircraft parts?

L3Harris Technologies, and its predecessor companies, have a long history of performing sole-source contracts with the Department of Defense across various platforms and systems. For aircraft parts specifically, sole-source awards are often necessitated by proprietary designs, unique manufacturing processes, or the need to maintain specific legacy systems where only one contractor possesses the required technical data and production capabilities. While specific data on all their sole-source aircraft parts contracts isn't publicly itemized, L3Harris is a major defense contractor known for its extensive work in aerospace systems, including sustainment and component manufacturing. Their track record generally indicates a capacity to deliver complex solutions, but the absence of competition on sole-source awards means that value for money is assessed through different mechanisms, such as historical pricing, should-cost analyses, and contractor cost certifications, rather than direct market comparison.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in terms of value for money for aircraft parts?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is well-defined, but the costs are uncertain, or for services requiring significant contractor investment. In this structure, the contractor is reimbursed for allowable costs plus a predetermined fixed fee, representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF generally offers less incentive for the contractor to control costs, as the government bears the risk of cost overruns. However, FFP contracts can be difficult to implement for highly specialized or evolving aircraft parts where precise cost estimation is challenging. For taxpayers, CPFF contracts require robust government oversight to ensure costs are reasonable and the fixed fee is justified. While potentially leading to higher total costs than a competitive FFP contract, CPFF can be advantageous for ensuring the availability of critical, specialized parts when competition is limited or impossible.

What are the primary risks associated with a sole-source award for aircraft parts, and how are they mitigated?

The primary risk of a sole-source award for aircraft parts is the lack of price competition, which can lead to inflated costs for the government. Without competing bids, there is less pressure on the contractor to offer the lowest possible price. Other risks include potential complacency from the contractor regarding efficiency and innovation, and a reduced incentive to explore cost-saving measures. Mitigation strategies employed by the DoD include conducting thorough price analyses based on historical data, should-cost estimates, and market research where possible. Robust contract administration, including detailed cost monitoring and audits, is crucial. Furthermore, the government may negotiate specific performance metrics or incentives within the contract to encourage efficiency, even in a sole-source environment. The long-term nature of this contract also necessitates careful review and potential renegotiation points.

How does the $53.97 million total award value compare to typical spending on 'Other Aircraft Parts' by the DoD?

The total award value of $53.97 million for 'Other Aircraft Parts' over a period of approximately five years (July 2020 to November 2025) represents a significant, but not extraordinary, investment within the DoD's vast aerospace sustainment budget. The category 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) encompasses a wide array of components, from small fittings to complex sub-assemblies, excluding engines and airframes themselves. Annual spending within this category across the entire DoD can reach billions of dollars, supporting thousands of aircraft. Therefore, while $54 million is a substantial sum for a single contract, it is likely a component of a larger, ongoing effort to maintain diverse aircraft fleets. Benchmarking this specific contract's value against the broader category is challenging due to the heterogeneity of 'parts' and the prevalence of both competitive and sole-source awards within the sector.

What are the implications of the contract's duration (1955 days) for long-term cost management and contractor performance?

A contract duration of 1955 days (approximately 5.3 years) for aircraft parts signifies a long-term commitment by the Department of the Air Force to secure a steady supply of essential components. This extended period allows the contractor, L3Harris, to plan production, manage inventory, and potentially achieve economies of scale. For the government, it ensures supply chain stability for critical parts, reducing the risk of operational disruptions. However, the long duration, coupled with the sole-source nature and CPFF structure, increases the potential for cost creep over time if not managed diligently. It necessitates robust oversight mechanisms to track performance, control costs, and ensure that the fixed fee remains appropriate throughout the contract's life. Regular reviews and potential contract modifications may be needed to adapt to changing requirements or market conditions, ensuring continued value for taxpayers.

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: $53,973,699

Exercised Options: $53,973,699

Current Obligation: $53,973,699

Actual Outlays: $91,536

Subaward Activity

Number of Subawards: 52

Total Subaward Amount: $15,064,599

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