L3Harris Technologies awarded $106.5M for engineering services, a sole-source contract with a 3-year duration

Contract Overview

Contract Amount: $106,549,656 ($106.5M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2021-12-14

End Date: 2024-12-13

Contract Duration: 1,095 days

Daily Burn Rate: $97.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

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 $106.5 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. The fixed-price contract type aims to control costs, but the lack of competition limits upside for taxpayers. 3. Performance is tracked over a 3-year period, indicating a need for sustained engineering support. 4. The contract falls under engineering services, a broad category with diverse applications. 5. The awardee, L3Harris Technologies, is a significant player in the defense sector. 6. No small business set-aside was utilized, suggesting a focus on specialized capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific engineering services provided. Without competitive bids, it's difficult to ascertain if the $106.5 million represents optimal value for money. The firm fixed-price structure provides cost certainty for the government, but the absence of competition means potential savings from a more robust bidding process are foregone. Further analysis would require understanding the specific deliverables and comparing them to industry benchmarks for similar specialized engineering support.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when circumstances necessitate a rapid award. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that typically arise from a competitive bidding process. This can lead to higher prices than might be achieved in an open market.

Taxpayer Impact: Taxpayers may be paying a premium for these engineering services due to the absence of competitive pressure. The government did not leverage market forces to secure the best possible price.

Public Impact

The Department of the Air Force benefits from specialized engineering services critical to its operations. This contract supports the development and maintenance of complex defense systems. The geographic impact is primarily within Texas, where L3Harris Technologies is located. Workforce implications include the employment of skilled engineers and technical staff at L3Harris.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if not closely managed due to lack of competitive pressure.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established contractor with presumed expertise in the required services.
Long-term contract duration allows for sustained support and planning.

Sector Analysis

The engineering services sector is a critical component of the defense industrial base, providing essential support for the design, development, and sustainment of advanced military technologies. This contract, valued at over $100 million, represents a significant investment within this sector. Comparable spending benchmarks for specialized engineering services can vary widely based on complexity and duration, but this award falls within the upper range for single-award contracts of this nature.

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. This suggests that the services required were highly specialized and likely best met by large, established defense contractors. The absence of small business involvement could limit opportunities for smaller firms to participate in this specific defense procurement, though L3Harris may engage small businesses indirectly through its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is limited by the sole-source nature of the award; however, contract details and performance reports are usually available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Aerospace Engineering Support
Military Technology Development
L3Harris Technologies Contracts
Department of the Air Force Procurements

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $106.5 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 $106.5 million.

What is the period of performance?

Start: 2021-12-14. End: 2024-12-13.

What specific engineering services are being provided under this contract?

The provided data indicates the contract is for 'Engineering Services' under NAICS code 541330. This broad category typically encompasses services such as design, development, testing, and analysis of systems and components for military applications. Without more specific contract line item details, it's difficult to pinpoint the exact nature of the engineering work. However, given the awardee (L3Harris Technologies) and the awarding agency (Department of the Air Force), it is highly probable that these services relate to advanced aerospace, defense systems, or related technological platforms. Further details would likely be found in the contract's statement of work.

How does the $106.5 million award compare to similar engineering services contracts awarded by the Air Force?

Comparing this $106.5 million sole-source award requires context on the specific type and duration of engineering services. The Air Force awards numerous engineering contracts, ranging from small, specialized tasks to large, multi-year programs. A 3-year duration for a contract of this magnitude suggests a substantial, ongoing requirement. While direct comparisons are difficult without knowing the precise scope, awards in the $100M+ range for engineering services over multiple years are significant but not uncommon for major defense platforms or research initiatives. The sole-source nature, however, means this figure isn't directly comparable to competitively bid contracts, which often yield lower prices.

What are the primary risks associated with a sole-source contract of this size?

The primary risk associated with a sole-source contract of this size is the potential for inflated pricing due to the lack of competitive pressure. Without multiple bidders vying for the contract, the government may not achieve the most cost-effective outcome. Another risk is vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility or innovation. Furthermore, the justification for sole-source procurement must be robust; if it's found to be inadequate, it could indicate poor planning or a lack of market research. Ensuring clear performance metrics and strong oversight is crucial to mitigate these risks.

What is L3Harris Technologies' track record with the Department of Defense?

L3Harris Technologies is a major defense contractor with a substantial and long-standing track record with the Department of Defense (DoD). The company is involved in a wide array of programs across various military branches, providing products and services related to communications, electronic warfare, sensors, and information systems. Historically, L3Harris and its predecessor companies have been awarded billions of dollars in contracts from the DoD. Their performance record is generally considered strong, reflecting their significant role in supporting national defense initiatives. Specific performance on individual contracts can vary, but they are a recognized and significant entity within the defense industrial base.

How has federal spending on engineering services evolved over the past five years?

Federal spending on engineering services has generally seen a steady increase over the past five years, driven by modernization efforts across defense, infrastructure, and technology sectors. The Department of Defense, in particular, consistently represents a large portion of this spending, funding research, development, and sustainment of complex military systems. While specific figures fluctuate annually based on budget allocations and national priorities, the overall trend indicates a sustained demand for specialized engineering expertise. Factors such as geopolitical tensions, technological advancements, and infrastructure renewal projects contribute to this ongoing investment in engineering capabilities across various federal agencies.

What are the implications of the firm fixed-price contract type for this award?

The firm fixed-price (FFP) contract type means that L3Harris Technologies is obligated to perform the specified engineering services for a predetermined price of $106.5 million. This structure shifts the majority of the cost risk from the government to the contractor. If the contractor's costs exceed the fixed price, they absorb the loss. Conversely, if they can complete the work for less than the fixed price, they retain the profit. For the government, FFP provides cost certainty and predictability, making budgeting easier. However, in a sole-source scenario, the 'firm' price might be set at a higher baseline to account for the contractor's perceived risk and lack of competition.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $124,194,803

Exercised Options: $106,549,656

Current Obligation: $106,549,656

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $5,951,324

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