DoD's $27.7M L3Harris contract for aircraft parts awarded via sole-source justification

Contract Overview

Contract Amount: $27,745,741 ($27.7M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2023-03-09

End Date: 2026-03-31

Contract Duration: 1,118 days

Daily Burn Rate: $24.8K/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 $27.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded without competition, raising questions about potential cost savings. 2. Significant contract value for aircraft parts manufacturing, indicating a critical need. 3. Sole-source award suggests limited market options or specific contractor capabilities. 4. Contract duration of over three years points to a long-term requirement. 5. Awarded to L3Harris Technologies, a major defense contractor with extensive experience. 6. Texas-based awardee may have implications for regional economic impact and workforce.

Value Assessment

Rating: questionable

The contract's value of $27.7 million for aircraft parts requires careful benchmarking against similar sole-source awards. Without competitive bidding, it is difficult to definitively assess if the pricing represents fair market value. The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can sometimes lead to higher overall costs if not closely managed. Further analysis of the fixed fee percentage and the estimated costs is needed to determine value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This typically occurs when a unique capability is required, or when only one responsible source is available. The lack of competition means that the government did not benefit from a range of proposals and potentially lower prices that could arise from a competitive bidding process. The justification for this sole-source award needs to be thoroughly reviewed.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the government does not have the benefit of competitive pressure to drive down prices. This necessitates robust oversight to ensure the awarded price is reasonable.

Public Impact

The Department of the Air Force benefits from the acquisition of critical aircraft parts, ensuring operational readiness. L3Harris Technologies, the contractor, will deliver specialized manufacturing services. The geographic impact is centered in Texas, where the contractor is located, potentially supporting local jobs and the regional economy. The contract supports the defense industrial base by ensuring the availability of essential components for military aircraft.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated costs for taxpayers.
Sole-source justification needs rigorous scrutiny to ensure necessity.
CPFF contract type requires diligent cost monitoring to prevent overruns.

Positive Signals

Award to an established defense contractor like L3Harris suggests technical capability.
Contract duration indicates a stable, long-term need for these aircraft parts.
The award supports the operational readiness of the Air Force.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical segment of the aerospace and defense industry. This sector is characterized by high technical requirements, stringent quality control, and often involves specialized materials and processes. The market size for aircraft parts manufacturing is substantial, driven by both military and commercial aviation needs. This specific award to L3Harris Technologies highlights the company's role as a key supplier within the defense industrial base, providing essential components that maintain the operational capability of Air Force aircraft.

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 in the provided data. The award to a large prime contractor like L3Harris Technologies suggests that the primary focus is on the prime contractor's capabilities. This could limit opportunities for small businesses to participate directly in this specific contract, although they may be part of L3Harris's broader supply chain.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. Given the sole-source nature and CPFF type, rigorous oversight of cost, performance, and schedule will be crucial. Transparency may be limited due to the lack of competitive proposals, making internal government review and justification documentation particularly important. The Inspector General's office may conduct audits or investigations if concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Aircraft Component Manufacturing
Defense Logistics Agency Contracts
Air Force Sustainment Programs
Sole-Source Defense Procurements

Risk Flags

Sole-source award requires justification review.
CPFF contract type necessitates cost monitoring.
Potential for higher costs due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.7 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 $27.7 million.

What is the period of performance?

Start: 2023-03-09. End: 2026-03-31.

What is the specific justification provided by the Department of the Air Force for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded under 'NOT COMPETED,' which is a broad category. Typically, sole-source justifications for Department of Defense contracts fall under specific exceptions to full and open competition, such as those outlined in the Federal Acquisition Regulation (FAR) Part 6. These exceptions can include circumstances where only one responsible source is capable of providing the required supplies or services, or when there is a compelling urgency. For this specific contract, the Air Force would have had to document why a competitive process was not feasible or appropriate, detailing the unique capabilities of L3Harris Technologies or the specific nature of the aircraft parts required that limited the pool of potential bidders. Without access to the full justification document, the precise reasons remain unconfirmed, but it likely centers on specialized technical requirements or a lack of alternative sources.

How does the Cost Plus Fixed Fee (CPFF) pricing structure for this contract compare to industry standards for similar aircraft parts manufacturing?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense contracting, particularly when the scope of work involves uncertainties or requires significant research and development. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. While this structure can accommodate evolving requirements, it carries inherent risks of cost overruns if not managed diligently. Benchmarking the fixed fee percentage against industry averages for similar aircraft parts manufacturing is essential for assessing value. Without specific data on the fee percentage and the estimated cost base, a direct comparison is difficult. However, the government's contracting officers are responsible for negotiating a fee that is fair and reasonable, considering the level of risk undertaken by the contractor and the complexity of the work. The effectiveness of this pricing structure hinges on robust government oversight to monitor costs and ensure efficiency.

What are the potential risks associated with a sole-source award of this magnitude for critical aircraft components?

A sole-source award of this magnitude ($27.7 million) for critical aircraft components presents several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved through a competitive bidding process, potentially resulting in less value for taxpayer money. Secondly, it can reduce the incentive for the sole-source provider to innovate or improve efficiency, as they face less market pressure. Thirdly, it can create a dependency on a single supplier, which could be problematic if that supplier experiences financial difficulties, production issues, or decides to exit the market. Finally, the lack of transparency inherent in sole-source procurements can make it harder to identify potential inefficiencies or questionable pricing without extensive government auditing and oversight. Ensuring robust contract management and performance monitoring is critical to mitigate these risks.

What is L3Harris Technologies' track record with the Department of Defense, particularly in supplying aircraft parts?

L3Harris Technologies is a major defense contractor with a long and extensive history of supplying a wide range of products and services to the Department of Defense (DoD) and other government agencies. The company is known for its expertise in areas such as avionics, electronic warfare, communications, and integrated mission systems. Within the realm of aircraft parts and auxiliary equipment, L3Harris has a significant presence, often providing complex components, systems integration, and sustainment services for various military aircraft platforms. Their track record generally indicates a strong technical capability and the capacity to handle large, complex defense contracts. However, like any large contractor, specific contract performance can vary, and it is always prudent to review performance metrics and past issues on individual awards.

How does this contract's value and duration compare to historical spending patterns for similar aircraft parts by the Department of the Air Force?

The provided data indicates a contract value of $27.7 million with a duration extending to March 2026 (approximately 3 years). To assess this against historical spending patterns, one would need to analyze past Department of the Air Force (DAF) contracts for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS code 336413) or similar categories. Key comparison points would include the average contract value, typical contract durations, and the prevalence of sole-source versus competitive awards within this spending category. If historical data shows that similar parts are typically procured through competitive bids at lower unit costs, or if contracts of this duration are unusual for this type of item, it would suggest this award warrants closer scrutiny. Conversely, if this aligns with established patterns for specialized or long-lead-time components, it might be considered more typical, though the sole-source aspect remains a point of interest.

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

Financial Breakdown

Contract Ceiling: $27,745,741

Exercised Options: $27,745,741

Current Obligation: $27,745,741

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $1,887,083

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