DoD's $74.6M Big Safari contract to L3Harris Technologies awarded without competition, raising value concerns

Contract Overview

Contract Amount: $74,663,442 ($74.7M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2021-10-01

End Date: 2024-10-31

Contract Duration: 1,126 days

Daily Burn Rate: $66.3K/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 $74.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. The contract's value, exceeding $74 million, was awarded through a non-competitive process, limiting price discovery. 2. L3Harris Technologies, the sole awardee, has a significant presence in defense contracting, suggesting established relationships. 3. The 'Cost Plus Fixed Fee' pricing structure can incentivize cost overruns, potentially impacting overall value. 4. The contract duration of over three years indicates a substantial, long-term commitment from the Department of Defense. 5. The lack of competition raises questions about whether the government secured the best possible price and terms. 6. Performance context is limited due to the 'Other Aircraft Parts' classification, requiring deeper analysis of specific deliverables.

Value Assessment

Rating: questionable

The 'Cost Plus Fixed Fee' contract type, coupled with a lack of competition, raises concerns about value for money. Without competitive bids, it is difficult to benchmark pricing against market rates or similar contracts. The fixed fee component offers some cost control, but the 'cost plus' element means the government bears the risk of increased costs. Further analysis of the specific services and L3Harris's historical performance on similar contracts would be needed to provide a more definitive value assessment.

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 responsible source can provide the required goods or services. The lack of competition means that potential alternative suppliers were not considered, and the government did not benefit from a bidding process that could drive down prices and foster innovation. The justification for this sole-source award would need to be thoroughly reviewed to understand why full and open competition was not feasible.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This limits the government's ability to leverage market forces for cost savings.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving specialized aircraft parts and auxiliary equipment. This contract supports advanced aerospace and defense capabilities, likely contributing to national security objectives. The geographic impact is centered in Texas, where L3Harris Technologies Integrated Systems L.P. is located. The contract supports a segment of the aerospace manufacturing workforce involved in specialized aircraft components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Cost-plus contract type carries inherent risk of cost escalation for the government.
Lack of transparency in the justification for sole-source award.
Limited public information on specific deliverables and performance metrics.
Potential for contractor lock-in due to specialized nature of the work.

Positive Signals

Award to an established defense contractor with existing capabilities.
Contract duration suggests a stable, long-term need for the services.
Fixed fee component provides some level of cost predictability.
Potential for high-quality specialized equipment due to contractor's expertise.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity, significant R&D investment, and long product development cycles. Contracts like this, for specialized aircraft parts, are crucial for maintaining and upgrading military fleets. The market is often dominated by a few large, established players due to high barriers to entry. Benchmarking this contract's value is challenging without detailed specifications, but spending in this sub-sector is substantial, driven by evolving threats and technological advancements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, L3Harris Technologies, is a large defense corporation. While large prime contractors are often required to subcontract portions of their work to small businesses, the extent to which this will occur is not detailed in the provided data. The absence of a specific set-aside suggests that the primary focus was on awarding to the most capable, albeit sole-source, provider, rather than prioritizing small business participation at the prime contract level.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The 'Cost Plus Fixed Fee' structure necessitates close monitoring of costs incurred by the contractor to ensure they align with the fixed fee. Transparency is limited due to the sole-source nature and the classification of the work. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Accountability relies heavily on the government's ability to effectively manage the contract and audit contractor expenditures.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Defense Logistics Agency (DLA) Contracts
Air Force Materiel Command (AFMC) Spending
Specialized Aerospace Systems Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competitive bidding
Limited transparency on specific deliverables

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.7 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 $74.7 million.

What is the period of performance?

Start: 2021-10-01. End: 2024-10-31.

What specific aircraft systems or components does this contract cover under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'?

The provided data classifies the contract under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This broad category typically includes parts and auxiliary equipment for aircraft that are not elsewhere classified, such as airframe structures, engine parts, landing gear, and electrical systems. However, without more specific details on the 'BIG SAFARI' program or the contract's statement of work, it is impossible to determine the exact systems or components. 'BIG SAFARI' is known to be an Air Force program focused on rapid acquisition of special operations and intelligence-gathering aircraft capabilities, suggesting these parts are likely for highly specialized, non-standard aircraft modifications or enhancements rather than routine fleet maintenance.

What is the justification for awarding this $74.6 million contract to L3Harris Technologies on a sole-source basis?

The data indicates the contract was 'NOT COMPETED' and awarded on a 'sole-source' basis. Government agencies typically sole-source contracts when only one responsible source can provide the required supplies or services. Common justifications include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when a previous contract was awarded competitively and the follow-on work can only be performed by the original contractor. For the 'BIG SAFARI' program, it's plausible that L3Harris possesses unique expertise, technology, or existing integration capabilities essential for the specific, specialized aircraft modifications required, making competition impractical or detrimental to the program's objectives. A formal Justification for Other Than Full and Open Competition (JOFOC) would detail these reasons.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type compare to other contract types in terms of risk and potential value for this type of defense procurement?

The 'Cost Plus Fixed Fee' (CPFF) contract type is common in defense procurement, especially for research, development, and complex systems integration where the final costs are uncertain. In a CPFF contract, the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing the contractor's profit. This structure shifts cost risk to the government, as any cost overruns are borne by the agency. However, the fixed fee provides some incentive for the contractor to control costs, as their profit is capped. Compared to fixed-price contracts, CPFF offers more flexibility for evolving requirements but can be more expensive if costs escalate significantly. Compared to 'Cost Plus Incentive Fee' (CPIF), CPFF offers less incentive for the contractor to exceed performance targets or reduce costs beyond a certain point, as the fee is fixed regardless of final cost outcomes.

What is L3Harris Technologies' track record with the Department of Defense, particularly on 'BIG SAFARI' or similar specialized aircraft programs?

L3Harris Technologies is a major defense contractor with a substantial history of working with the Department of Defense across various platforms and programs. They have a known presence in intelligence, surveillance, and reconnaissance (ISR) systems, electronic warfare, and aircraft modification, which aligns well with the likely scope of the 'BIG SAFARI' program. While specific contract details for L3Harris's involvement in 'BIG SAFARI' prior to this award are not provided, their extensive portfolio suggests they possess the necessary technical expertise and security clearances for such specialized work. Their track record generally includes delivering complex systems, though like any large contractor, they would have faced scrutiny on specific projects regarding cost, schedule, and performance. A deeper dive into their past performance ratings and any contract disputes would offer more insight.

Are there any indications of potential cost overruns or inefficiencies given the contract's duration and pricing structure?

The 'Cost Plus Fixed Fee' (CPFF) structure inherently carries a risk of cost overruns, as the government assumes the majority of the cost risk. The contract duration of 1126 days (over three years) for a $74.6 million award suggests a complex, long-term undertaking. Without detailed performance reports, cost breakdowns, or earned value management data, it's impossible to definitively state if cost overruns are occurring or are likely. However, the lack of competition means there was no initial competitive pressure to drive down projected costs. Effective government oversight, including rigorous auditing of incurred costs and monitoring of progress against milestones, is crucial to mitigate the risk of inefficiencies and overruns inherent in this contract type and duration.

How does this contract fit into the broader landscape of Air Force spending on specialized aircraft and intelligence capabilities?

This contract falls under the 'BIG SAFARI' program, which is the Air Force's mechanism for rapidly acquiring and modifying aircraft for special operations forces (SOF) and intelligence, surveillance, and reconnaissance (ISR) missions. Spending in this area is critical for maintaining a technological edge in asymmetric warfare and intelligence gathering. The 'BIG SAFARI' program often involves unique, non-standard modifications to existing platforms or the integration of novel technologies, distinguishing it from standard fleet procurement or sustainment. Contracts awarded under 'BIG SAFARI' are typically characterized by their specialized nature, often requiring unique contractor expertise, and sometimes awarded non-competitively due to the specific requirements and rapid deployment needs. This $74.6 million award represents a significant investment in enhancing these specialized capabilities.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $74,663,442

Exercised Options: $74,663,442

Current Obligation: $74,663,442

Subaward Activity

Number of Subawards: 81

Total Subaward Amount: $30,259,283

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862021G4027

IDV Type: BOA

Timeline