DoD awards $30.9M contract for aircraft parts, with limited competition and potential for cost overruns

Contract Overview

Contract Amount: $30,903,782 ($30.9M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2022-03-11

End Date: 2026-01-30

Contract Duration: 1,421 days

Daily Burn Rate: $21.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

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 $30.9 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, which carries inherent risk of higher final costs. 2. Limited competition raises concerns about price discovery and potential for suboptimal value. 3. Contract duration of 1421 days suggests a long-term need for these aircraft parts. 4. The contractor, L3Harris Technologies, is a significant player in the defense sector. 5. Awarded by the Department of Defense, indicating a critical national security requirement. 6. The North American Industry Classification System (NAICS) code 336413 points to specialized manufacturing.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure presents a risk for taxpayers, as the final cost is not predetermined and could exceed initial estimates. Benchmarking against similar contracts for specialized aircraft parts is difficult without more detailed cost breakdowns. However, the absence of robust competition suggests that the government may not have secured the most competitive pricing available in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed openly, falling under the 'NOT AVAILABLE FOR COMPETITION' category. This suggests that only one source was deemed capable of fulfilling the requirement, or that the circumstances of the procurement limited the ability to solicit bids from multiple offerors. The lack of broad competition limits the government's ability to leverage market forces to drive down costs and ensure the best possible value.

Taxpayer Impact: Limited competition means taxpayers may be paying a premium, as the government had fewer options to negotiate price and terms.

Public Impact

The Department of Defense benefits from the acquisition of essential aircraft parts, ensuring operational readiness. The contract supports the maintenance and sustainment of military aviation assets. The geographic impact is primarily in Texas, where the contractor is located. The contract likely supports a specialized manufacturing workforce within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type increases risk of cost overruns.
Limited competition may lead to higher prices and reduced value for taxpayer dollars.
Lack of detailed cost information hinders independent value assessment.
Long contract duration could expose the government to changing market conditions or technological obsolescence.

Positive Signals

Contract awarded to a known defense contractor, L3Harris Technologies, suggesting established capabilities.
The contract addresses a specific need within the Department of Defense, indicating strategic importance.
The award is managed by the Defense Contract Management Agency, implying a level of oversight.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for such specialized components is often characterized by high barriers to entry due to technical expertise, certifications, and established relationships with government agencies. Spending in this area is critical for maintaining military readiness and supporting the defense industrial base. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft components awarded by the DoD or other defense agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor, L3Harris Technologies, is a large defense contractor, and while they may engage small businesses as subcontractors in their broader operations, this specific contract does not mandate such engagement.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration and oversight. The cost-plus-fixed-fee nature of the award necessitates close monitoring of costs incurred by the contractor to ensure compliance with the contract terms and to identify any potential inefficiencies or overruns. Transparency regarding specific cost elements and performance metrics would be crucial for effective oversight, though such details are not provided in this summary.

Related Government Programs

Department of Defense Aircraft Procurement
Defense Logistics Agency Support Contracts
Military Aircraft Parts Manufacturing
Aerospace Component Supply Contracts

Risk Flags

Cost-plus-fixed-fee contract type
Limited competition procurement
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.9 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $30.9 million.

What is the period of performance?

Start: 2022-03-11. End: 2026-01-30.

What is the historical spending pattern for L3Harris Technologies with the Department of Defense for similar aircraft parts?

Analyzing L3Harris Technologies' historical spending with the DoD for similar aircraft parts requires access to comprehensive contract databases. However, as a major defense contractor, L3Harris Technologies has a significant portfolio of contracts across various defense platforms. Without specific data on past awards for NAICS code 336413 or comparable product lines, it's difficult to provide a precise historical spending figure. Generally, large defense contractors like L3Harris receive substantial funding over many years for sustainment, upgrades, and new production of aircraft components. This contract, valued at $30.9 million over its duration, represents a portion of their overall engagement with the DoD, and its value should be considered in the context of their broader contract history.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contracts for similar aircraft parts?

Cost Plus Fixed Fee (CPFF) contracts are common in defense procurement, especially when the scope of work involves uncertainties or requires significant research and development. However, CPFF contracts carry a higher risk for the government compared to fixed-price contracts, as the final cost is not capped and can increase if the contractor's costs exceed estimates. For similar aircraft parts, fixed-price contracts often offer better value if the requirements are well-defined and the market is competitive. The CPFF structure here suggests that the DoD anticipated potential cost fluctuations or complexities in manufacturing these specific parts. Benchmarking against other CPFF contracts for similar items would be necessary to assess if the fixed fee component is reasonable and if the projected costs are in line with industry standards.

What are the specific risks associated with the 'NOT AVAILABLE FOR COMPETITION' designation for this contract?

The 'NOT AVAILABLE FOR COMPETITION' designation, often referred to as sole-source or limited competition, carries several risks for the government and taxpayers. Primarily, it eliminates the competitive pressure that typically drives down prices and encourages innovation. Without multiple bidders, the government has less leverage to negotiate favorable terms and pricing. This can lead to higher costs than might be achieved in an open competition. Furthermore, it raises questions about whether the government adequately explored all potential sources or if there were legitimate reasons for the limited competition, such as unique technical requirements or proprietary technology. This lack of transparency in the procurement process can obscure potential inefficiencies and reduce overall value for money.

What is the expected performance standard and how is it measured for this contract?

The performance standards for this contract are not explicitly detailed in the provided data. However, as a contract for aircraft parts awarded by the Department of Defense and managed by the Defense Contract Management Agency (DCMA), it is expected to adhere to stringent quality and delivery requirements. Performance is typically measured against technical specifications, delivery schedules, and quality control metrics. The DCMA would be responsible for monitoring the contractor's adherence to these standards, including inspections and audits. For a Cost Plus Fixed Fee contract, performance is also linked to the efficient management of costs. Failure to meet performance standards could result in contract modifications, penalties, or termination, depending on the contract's specific clauses.

What is the potential impact of the contract's duration (1421 days) on technological relevance and future sustainment?

A contract duration of 1421 days (approximately 3.9 years) for aircraft parts is substantial and implies a long-term need for these components. The primary risk associated with such a long duration is the potential for technological obsolescence. Aircraft technology evolves rapidly, and parts designed for current systems might become outdated or unsupported by newer technologies within this timeframe. This could lead to challenges in future sustainment if the parts become difficult to source or if the manufacturing processes become obsolete. Additionally, market conditions and material costs can fluctuate significantly over nearly four years, potentially impacting the overall cost-effectiveness of the contract, especially given its CPFF structure.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

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: $30,903,959

Exercised Options: $30,903,959

Current Obligation: $30,903,782

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $786,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862021G4027

IDV Type: BOA

Timeline