DoD's $297M L3Harris contract for aircraft parts awarded via sole-source justification

Contract Overview

Contract Amount: $29,690,379 ($29.7M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2021-02-26

End Date: 2024-02-29

Contract Duration: 1,098 days

Daily Burn Rate: $27.0K/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 $29.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded to a single vendor, raising questions about price competitiveness. 2. Significant duration of over 3 years suggests a long-term need for these parts. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Awarded by the Air Force, indicating a focus on aviation readiness. 5. The contractor is a major defense supplier, suggesting established capabilities. 6. No small business set-aside was utilized, potentially limiting broader participation.

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 awards. The lack of competition inherently limits the government's ability to secure the best possible price. While L3Harris is a reputable contractor, the absence of competitive bidding means taxpayers may not be receiving optimal value for the $297 million obligated.

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 reserved for situations where only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's leverage in negotiating favorable terms and pricing.

Public Impact

The primary beneficiaries are the Department of the Air Force and its aviation operations, ensuring the availability of critical aircraft parts. Services delivered include the provision of aircraft parts and auxiliary equipment, essential for maintaining fleet readiness. The geographic impact is primarily within Texas, where L3Harris Technologies Integrated Systems L.P. is located, but the ultimate impact is on Air Force bases nationwide. Workforce implications include continued employment for personnel at L3Harris involved in the manufacturing and supply of these parts.

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 may not sufficiently incentivize cost control by the contractor.
Lack of small business participation means missed opportunities for smaller firms in the defense supply chain.

Positive Signals

Award to a large, established defense contractor suggests reliability and proven capability.
Long contract duration indicates a stable supply chain for critical aircraft components.
The contract supports essential Air Force operations, contributing to national security.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the broader aerospace and defense industry. The market for aircraft parts is substantial, driven by military and commercial aviation needs. This specific award to L3Harris Technologies represents a significant portion of spending within this niche, highlighting the company's role as a key supplier to the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this significant $297 million award are limited. The absence of a small business focus in this sole-source contract could mean a missed opportunity to foster growth and innovation within the small business defense industrial base.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be dictated by the terms of the Cost Plus Fixed Fee agreement, including reporting requirements and audits. Transparency may be limited due to the sole-source nature of the award, making public scrutiny of pricing and performance more challenging.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency Contracts
Air Force Aviation Sustainment
Sole-Source Defense Contracts
Cost-Plus Contracting

Risk Flags

Sole-source award may lead to higher costs.
Cost-plus contract type can incentivize higher spending.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.7 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 $29.7 million.

What is the period of performance?

Start: 2021-02-26. End: 2024-02-29.

What is the historical spending pattern for this specific contract vehicle or similar parts with L3Harris Technologies by the Air Force?

Analyzing historical spending requires access to detailed contract databases beyond the provided summary. However, given L3Harris's established presence in the defense sector, it is probable that they have held previous contracts for similar aircraft parts with the Air Force. A deeper dive would involve examining contract awards over the past 5-10 years to identify trends in contract values, types, and justifications. Understanding past performance and pricing would provide crucial context for evaluating the current $297 million award, especially given its sole-source nature. Without this historical data, it's difficult to ascertain if this award represents an increase, decrease, or consistent level of spending for these components.

How does the Cost Plus Fixed Fee (CPFF) structure typically perform in terms of cost control compared to other contract types for aircraft parts?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or involves significant uncertainty, which can be the case with specialized aircraft parts. Under CPFF, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fixed fee provides some incentive for the contractor to control costs (as it doesn't increase with higher expenses), it generally offers less cost control than fixed-price contracts. If costs escalate significantly, the government bears the burden. Compared to Firm-Fixed-Price (FFP) contracts, where the contractor assumes more risk for cost overruns, CPFF can be more susceptible to price increases. However, for complex R&D or unique manufacturing, CPFF might be necessary to attract contractors.

What specific justification was provided for awarding this contract on a sole-source basis, and were alternatives considered?

The provided data indicates the contract was 'NOT COMPETED,' which typically implies a sole-source justification was used. Common justifications include the existence of only one responsible source, urgent and compelling needs, or specific national security requirements that preclude competition. Without the full contract award justification document, the precise reason remains unknown. However, for a contract of this magnitude and duration, the government would typically need to demonstrate that competitive procedures were either impractical or would not meet the agency's needs. The process usually involves market research to confirm the lack of viable alternatives or the unique capabilities of the sole source.

What are the key performance indicators (KPIs) or metrics used to measure the success and value of this contract for the Air Force?

Key performance indicators for a contract supplying aircraft parts typically revolve around delivery timeliness, quality of parts, and adherence to specifications. For the Air Force, critical metrics would include on-time delivery rates to ensure aircraft are not grounded due to part shortages, defect rates (ensuring parts meet stringent quality standards), and compliance with technical data packages. Value is often assessed through the lens of total cost of ownership, including not just the purchase price but also the reliability and lifespan of the parts. Given the CPFF structure, performance metrics related to cost efficiency and contractor responsiveness would also be crucial for oversight, though the 'fixed fee' aspect means profit is predetermined, shifting focus to delivery and quality.

Are there any known issues or past performance concerns related to L3Harris Technologies Integrated Systems L.P. on similar defense contracts?

Assessing past performance requires access to contractor performance evaluation reports (e.g., Contractor Performance Assessment Reporting System - CPARS) and potentially CAGE code specific data. L3Harris Technologies is a large and established defense contractor, and like many major players, they likely have a complex performance history across numerous contracts. Without specific CPARS data or a review of past contract disputes or terminations involving L3Harris for similar aircraft parts, it's difficult to definitively state their performance record on comparable contracts. Generally, the DoD conducts pre-award reviews of past performance, especially for sole-source awards, to mitigate risks associated with contractor capabilities and reliability.

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: $29,690,379

Exercised Options: $29,690,379

Current Obligation: $29,690,379

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $224,840

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline