DoD's $63.8M L3Harris contract for engineering services awarded via sole-source justification

Contract Overview

Contract Amount: $63,784,196 ($63.8M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2021-11-30

End Date: 2022-11-30

Contract Duration: 365 days

Daily Burn Rate: $174.8K/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: ROCKWALL, ROCKWALL County, TEXAS, 75032

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $63.8 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 engagement. 2. The 'NOT COMPETED' award suggests a lack of competitive pressure, potentially impacting value for money. 3. Engineering services are critical for defense operations, but the absence of competition warrants scrutiny. 4. The contract duration of 365 days provides a defined period for service delivery. 5. Awarded to L3Harris Technologies Integrated Systems L.P., a major defense contractor. 6. The contract type is Cost Plus Fixed Fee, which can incentivize cost growth. 7. Texas is the place of performance, potentially benefiting the local economy.

Value Assessment

Rating: questionable

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and comparisons to similar sole-source engineering services contracts. The lack of competition inherently limits the ability to assess if the fixed fee and cost reimbursement represent a fair and reasonable price. Without competitive bids, it's difficult to determine if L3Harris's pricing is aligned with market rates for comparable engineering expertise. Further analysis would require access to the contractor's cost proposal and justification for the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' justification, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the requirement, or in specific circumstances like follow-on work to a previous contract where competition is not feasible or cost-effective. The absence of multiple bidders means there was no direct price comparison or negotiation driven by market forces, which can lead to higher costs for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing, potentially resulting in higher expenditures for taxpayers compared to a competitively bid contract.

Public Impact

The primary beneficiary is the Department of the Air Force, receiving critical engineering services. Services delivered likely support the maintenance, modification, or development of defense systems. Performance is located in Texas, potentially creating or sustaining jobs in the region. The contract supports the broader mission of national defense and technological advancement within the DoD.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially leads to higher costs.
Cost Plus Fixed Fee contract type can incentivize cost overruns.
Lack of transparency in the justification for sole-source award.
Limited opportunity for small businesses to participate as prime contractors.

Positive Signals

Award to an established defense contractor with known capabilities.
Contract supports critical engineering services for the Department of Defense.
Defined period of performance and clear place of performance.

Sector Analysis

This contract falls within the Engineering Services sector, a vital component of the broader aerospace and defense industry. This sector is characterized by high technical expertise, significant R&D investment, and long-term government contracts. The market is often dominated by a few large, specialized firms due to the complexity and security requirements. Spending in this area is crucial for maintaining technological superiority and supporting complex defense systems, with comparable contracts often running into tens or hundreds of millions of dollars.

Small Business Impact

The contract was not competed and there is no indication of a small business set-aside. This suggests that small businesses were unlikely to have had a direct opportunity to bid on this prime contract. While L3Harris may engage small businesses as subcontractors, the lack of a prime set-aside limits direct opportunities for small business growth and participation in this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures would be tied to the delivery of engineering services as outlined in the contract statement of work. Transparency is limited due to the sole-source nature of the award; the specific justification for not competing the contract would be the primary document for understanding the rationale. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Engineering Services
Aerospace and Defense Contracting
Department of the Air Force Procurement
Sole-Source Defense Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Cost-plus contract type carries inherent risk of cost overruns.
Lack of detailed service description in summary data.
No indication of small business participation as prime.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.8 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 $63.8 million.

What is the period of performance?

Start: 2021-11-30. End: 2022-11-30.

What specific engineering services are being procured under this contract?

The provided data indicates the contract is for 'Engineering Services' (NAICS code 541330) awarded to L3Harris Technologies Integrated Systems L.P. by the Department of the Air Force. However, the specific nature of these engineering services is not detailed in the summary data. Typically, such services in the defense sector can encompass a wide range of activities, including systems engineering, design, analysis, testing, integration, and technical support for complex military platforms, weapons systems, or related infrastructure. A more detailed statement of work (SOW) or contract award justification would be necessary to understand the precise technical requirements and deliverables.

Why was this contract awarded on a sole-source basis?

The data explicitly states the contract was 'NOT COMPETED', signifying a sole-source award. The specific justification for this sole-source determination is not provided in the summary data. Common reasons for sole-source awards in defense contracting include situations where only one responsible source can provide the required supplies or services, urgent and compelling needs that preclude full and open competition, or when a follow-on contract is necessary and only the original contractor can provide it due to unique capabilities or compatibility requirements. A formal Justification for Other Than Full and Open Competition (JOFOC) document would typically be required and publicly available for such awards.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some cost certainty for the contractor's profit margin, the 'cost-plus' element means the government bears the risk of cost overruns. If the contractor's actual costs exceed initial estimates, the government pays the higher amount. This structure can incentivize contractors to control costs to some extent, as their profit is fixed, but it lacks the strong cost-saving incentives found in fixed-price contracts. It is often used when the scope of work is not well-defined or involves significant uncertainty.

What is the significance of L3Harris Technologies Integrated Systems L.P. being the awardee?

L3Harris Technologies is a major defense contractor known for its extensive capabilities in aerospace, defense, and communications systems. Awarding a contract to such an established entity suggests the Department of the Air Force likely sought a contractor with proven expertise, existing infrastructure, and potentially prior experience with related systems. While this ensures a high level of technical capability, it also reinforces the trend of large, incumbent contractors securing significant government contracts, which can sometimes limit opportunities for smaller or newer entrants into the defense market.

What are the potential implications of the contract being performed in Texas?

The place of performance being Texas (ST: TX, SN: TEXAS) indicates that the economic benefits of this $63.8 million contract will likely accrue to the state. This includes potential job creation or retention for engineers and support staff employed by L3Harris or its subcontractors in Texas. It also means that a portion of the federal spending will be injected into the Texas economy through wages, procurement from local suppliers, and other business activities related to the contract execution.

Industry Classification

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

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

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: 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: $101,211,492

Exercised Options: $66,664,154

Current Obligation: $63,784,196

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $4,083,738

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862019G4006

IDV Type: BOA

Timeline