DoD's $39M L3Harris Contract for Aircraft Parts: A Sole-Source Award with Limited Competition

Contract Overview

Contract Amount: $39,017,197 ($39.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2021-12-01

End Date: 2024-09-30

Contract Duration: 1,034 days

Daily Burn Rate: $37.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BIG SAFARI - EO-14042

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $39.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI - EO-14042 Key points: 1. The contract's sole-source nature raises questions about potential overpayment and lack of competitive pressure. 2. Awarded to L3Harris Technologies, a major defense contractor, highlighting industry concentration. 3. The fixed-price contract type offers some cost certainty but may not fully capture efficiencies from competition. 4. Performance is concentrated in Texas, with potential implications for regional economic impact. 5. The duration of over 1000 days suggests a long-term need for these aircraft parts. 6. The absence of small business set-asides indicates a focus on large prime contractors.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. While the firm fixed-price structure provides cost predictability, the absence of competition means there's no market-driven validation of pricing. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess if the $39 million represents excellent value for the Department of Defense. Further analysis would require understanding the specific nature of the 'Other Aircraft Parts' and their market availability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, L3Harris Technologies, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and may result in higher costs compared to a fully competed contract. The lack of competition means taxpayers do not benefit from the cost savings that often arise from a competitive marketplace.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the best possible price for these aircraft parts. Without multiple bids, there is less incentive for the contractor to offer the lowest possible cost.

Public Impact

The primary beneficiary is the Department of the Air Force, ensuring the continued operation and maintenance of its aircraft fleet. The contract delivers essential aircraft parts, crucial for maintaining airworthiness and operational readiness. Geographic impact is concentrated in Texas, where L3Harris Technologies is located, potentially supporting local jobs and the regional economy. Workforce implications may include employment opportunities at L3Harris and its potential subcontractors within the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in pricing due to no competitive bidding process.
Concentration of a significant defense contract with a single large prime contractor.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established contractor (L3Harris) suggests a degree of reliability and existing expertise.
Contract duration indicates a sustained need, potentially aligning with long-term fleet support strategies.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' represents a critical segment of the defense industrial base. Spending in this area is often characterized by long production cycles, high technological requirements, and significant government procurement. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar aircraft components across different branches of the military.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary award went to a large prime contractor, L3Harris Technologies. While large prime contracts can sometimes include subcontracting opportunities for small businesses, the absence of a specific set-aside or stated subcontracting plan means the direct impact on the small business ecosystem is not guaranteed and may be limited. Further investigation into L3Harris's subcontracting practices would be needed to assess the full impact.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including delivery schedules, quality standards, and payment milestones. Transparency is limited due to the sole-source nature and the proprietary information often associated with defense manufacturing. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Aircraft Procurement
Air Force Sustainment and Logistics Contracts
Aerospace Parts Manufacturing Contracts
Sole-Source Defense Contracts
L3Harris Technologies Government Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. BIG SAFARI - EO-14042

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 $39.0 million.

What is the period of performance?

Start: 2021-12-01. End: 2024-09-30.

What is the specific nature of the 'Other Aircraft Parts' being procured under this contract, and why were they deemed only available from L3Harris?

The specific nature of the 'Other Aircraft Parts' is not detailed in the provided data. However, the sole-source award suggests these parts may be proprietary to L3Harris, require specialized manufacturing capabilities possessed exclusively by them, or are critical components for which L3Harris holds unique technical data or patents. Justifications for sole-source awards typically include factors like essentiality, urgency, or the unavailability of adequate alternatives. Without further documentation from the contracting agency (Department of the Air Force), the precise technical or proprietary reasons remain speculative. This lack of transparency is a common concern with sole-source procurements, making it difficult for external analysts to fully assess the necessity of the award method.

How does the $39 million contract value compare to historical spending on similar aircraft parts or by similar agencies?

Direct comparison of the $39 million contract value is difficult without knowing the specific parts procured and their market rates. However, as a sole-source award, it is inherently less likely to reflect the most competitive pricing. Historical spending on similar parts from other manufacturers or through competitive bids would likely be lower. For instance, if similar, non-proprietary parts were procured competitively, the cost per unit or total contract value might be significantly less. The Department of Defense procures a vast array of aircraft components, and while $39 million is substantial, its value proposition is questionable without competitive benchmarking. Analyzing past contracts for the same or comparable aircraft platforms could provide some context, but the sole-source nature here limits the ability to draw firm conclusions about value for money.

What are the potential risks associated with awarding a large contract solely to L3Harris Technologies, particularly regarding supply chain and innovation?

Awarding a large contract solely to L3Harris Technologies carries several potential risks. Firstly, it increases reliance on a single supplier, making the Department of Defense vulnerable to disruptions in L3Harris's production, supply chain issues, or changes in their business strategy. This concentration can also stifle innovation, as there is less competitive pressure to develop more cost-effective or technologically advanced solutions. Furthermore, a sole-source award can lead to complacency and potentially higher prices over time, as the government lacks the leverage that competition provides. While L3Harris is a major defense contractor with significant capabilities, over-reliance on any single entity for critical components can pose strategic risks to national security readiness.

What is the track record of L3Harris Technologies in fulfilling similar sole-source contracts with the Department of Defense?

L3Harris Technologies, and its predecessor companies, have a long history of fulfilling numerous contracts with the Department of Defense, including sole-source awards. As a large, established defense contractor, they possess extensive experience in manufacturing and supplying complex aerospace components. Their track record generally includes delivering on technical specifications and meeting delivery timelines for many programs. However, the specific performance metrics, cost overruns, or quality issues on past sole-source contracts would require a deeper dive into contract performance databases and Inspector General reports. While their overall presence suggests capability, the efficiency and value derived from their sole-source awards can vary significantly and warrant scrutiny on a case-by-case basis.

Are there any mechanisms in place to ensure fair pricing and performance oversight for this sole-source contract, given the lack of competition?

For sole-source contracts, agencies typically employ specific mechanisms to ensure fair pricing and oversight. This often involves conducting a 'should-cost' analysis or a detailed price negotiation with the contractor, using historical data, cost breakdowns, and market research to establish a reasonable price. The contracting officer is responsible for negotiating the best possible terms. Oversight mechanisms include regular progress reviews, audits, and performance monitoring against contract milestones. While competition is absent, the government's procurement regulations mandate that contracting officers must still ensure the price is fair and reasonable. However, the effectiveness of these mechanisms can be limited without the inherent price discovery provided by a competitive bidding process.

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: FIRM FIXED PRICE (J)

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: $40,195,445

Exercised Options: $39,578,978

Current Obligation: $39,017,197

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $3,905,113,914

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862021G4027

IDV Type: BOA

Timeline