DoD's $38.3M L3Harris contract for aircraft parts awarded without competition

Contract Overview

Contract Amount: $38,347,885 ($38.3M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2020-10-16

End Date: 2024-09-30

Contract Duration: 1,445 days

Daily Burn Rate: $26.5K/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 $38.3 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, potentially leading to higher costs than fixed-price contracts. 2. Lack of competition raises concerns about price discovery and potential overpayment. 3. The contract duration of over 1400 days suggests a long-term need for these aircraft parts. 4. Awarded to L3Harris Technologies Integrated Systems L.P., a large defense contractor. 5. The contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing', indicating a specialized need. 6. Geographic location of performance is Texas.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a definitive value assessment difficult without further data. Benchmarking against similar sole-source contracts for specialized aircraft parts would be necessary to determine if the pricing is reasonable. The total award amount of $38.3 million over its duration suggests a significant investment, and the absence of competitive bidding prevents a clear comparison to market rates or alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor can provide the required goods or services, or for reasons of urgency or national security. The lack of multiple bidders means there was no opportunity for price negotiation or comparison among different suppliers, which can limit the government's ability to secure the best possible price.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the contractor faced no direct rivals for this award.

Public Impact

The Department of the Air Force benefits from the acquisition of necessary aircraft parts. This contract supports the maintenance and operational readiness of specific aircraft platforms. The primary beneficiaries are likely military personnel and the defense infrastructure reliant on these aircraft. Workforce implications may include specialized manufacturing and logistics roles within L3Harris Technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to inflated costs for taxpayers.
Cost-plus-fixed-fee contracts can incentivize higher spending compared to fixed-price agreements.
Sole-source awards limit transparency and opportunities for smaller businesses to compete.

Positive Signals

Ensures availability of critical aircraft parts for defense operations.
Award to an established contractor like L3Harris suggests a degree of reliability.
Long contract duration indicates a sustained need and potential for stable supply.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a critical component of the aerospace and defense industry. This contract falls within the broader defense procurement landscape, where specialized parts are essential for maintaining the operational readiness of military aircraft. The market for such components is often characterized by high barriers to entry due to technical expertise, certifications, and established relationships with defense agencies. Comparable spending benchmarks are difficult to establish without knowing the specific aircraft and parts involved, but defense spending on aircraft sustainment is a significant portion of the overall defense budget.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific procurement. This means the direct economic impact on the small business ecosystem for this particular contract is likely minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management systems. Accountability measures are inherent in the cost-plus-fixed-fee structure, requiring the contractor to justify costs. Transparency is limited due to the sole-source award, but contract modifications and performance reports would be subject to internal review. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics and Sustainment
Aerospace Manufacturing Contracts
Department of Defense Supply Chain Management

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of transparency in pricing
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.3 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 $38.3 million.

What is the period of performance?

Start: 2020-10-16. End: 2024-09-30.

What specific aircraft platforms or systems does this contract support?

The provided data indicates the contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS code 336413) and was awarded by the Department of the Air Force. However, the specific aircraft platforms or systems that these parts are intended for are not detailed in the provided data. This information is crucial for understanding the criticality of the parts and the potential impact of supply chain disruptions. Further investigation into contract line item numbers (CLINs) or associated documentation would be required to identify the specific end-use applications.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract type as 'NOT COMPETED', indicating a sole-source award. Common justifications for sole-source procurements include the unavailability of other sources, urgent and compelling needs, or specific technical requirements that only one contractor can meet. Without additional documentation or justification from the awarding agency (Department of the Air Force), the precise reason for the sole-source award remains unknown. This lack of competition limits price discovery and may result in higher costs for the government.

What is the historical spending pattern for this specific type of aircraft part or with this contractor?

The provided data shows a single award of $38,347,885 to L3Harris Technologies Integrated Systems L.P. for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' with a start date of 2020-10-16 and an end date of 2024-09-30. This represents the total obligated amount for this specific contract. To understand historical spending patterns, one would need to analyze previous contracts awarded to L3Harris for similar parts, or other contracts for the same parts awarded to different vendors, to identify trends in pricing, volume, and competition over time.

How does the cost-plus-fixed-fee (CPFF) pricing structure compare to other contract types for similar procurements?

Cost-plus-fixed-fee (CPFF) contracts reimburse the contractor for allowable costs plus a fixed fee representing profit. This structure is often used when the scope of work is not well-defined or involves significant uncertainty. Compared to fixed-price contracts, CPFF can offer less price certainty for the government, as the final cost depends on actual expenses incurred. For procurements of specialized aircraft parts, fixed-price contracts are generally preferred when specifications are clear, as they incentivize cost control by the contractor. The use of CPFF here, especially without competition, warrants scrutiny to ensure costs are managed effectively.

What are the potential risks associated with a long-duration, sole-source contract for aircraft parts?

A long-duration, sole-source contract for aircraft parts carries several risks. Firstly, the lack of competition over an extended period can lead to complacency and reduced incentives for cost efficiency by the contractor, potentially resulting in higher prices for the government. Secondly, the government becomes heavily reliant on a single supplier, increasing vulnerability to supply chain disruptions, quality issues, or changes in the contractor's business strategy. Finally, without periodic re-competition, the government may miss opportunities to leverage market changes or technological advancements that could lead to better value.

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: $38,347,885

Exercised Options: $38,347,885

Current Obligation: $38,347,885

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $14,105,301

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline