DoD's $40M BIG SAFARI contract awarded to L3Harris for aircraft parts, with limited competition

Contract Overview

Contract Amount: $40,182,795 ($40.2M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2023-12-07

End Date: 2027-04-30

Contract Duration: 1,240 days

Daily Burn Rate: $32.4K/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: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $40.2 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Value for money appears fair given the firm-fixed-price structure, but limited competition raises concerns about optimal pricing. 2. Competition dynamics are heavily skewed towards a sole-source award, potentially limiting price discovery and innovation. 3. Risk indicators include the lack of robust competition and the long performance period, which could mask cost overruns. 4. Performance context is within the 'Other Aircraft Parts' manufacturing sector, a critical area for defense readiness. 5. Sector positioning highlights the importance of specialized manufacturing capabilities for maintaining advanced aircraft fleets.

Value Assessment

Rating: fair

The contract's value of approximately $40 million over four years warrants careful scrutiny due to the limited competition. While a firm-fixed-price contract offers some cost certainty, the absence of a competitive bidding process means there's no clear benchmark against similar contracts or market rates to definitively assess value for money. Without competitive proposals, it's difficult to ascertain if the pricing reflects the best possible outcome for taxpayers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3Harris Technologies Integrated Systems L.P. was the only bidder considered. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple vendors. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price and potentially explore innovative solutions from a wider range of suppliers.

Taxpayer Impact: Taxpayers may not be receiving the most cost-effective solution due to the absence of competitive pressure. This can lead to higher prices than might be achieved in an open market.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which will receive essential aircraft parts. Services delivered include the manufacturing and supply of specialized aircraft components, crucial for maintaining operational readiness. The geographic impact is centered in Texas, where L3Harris's facility is located, potentially supporting local employment and economic activity. Workforce implications include the need for skilled manufacturing labor to produce these specialized parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Long contract duration could obscure performance issues.
Sole-source awards can reduce incentive for innovation.
Dependence on a single supplier poses supply chain risks.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Awardee is an established defense contractor with relevant experience.
Contract supports critical defense readiness needs.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a vital component of the aerospace and defense industry. This contract, valued at over $40 million, fits within the broader landscape of defense procurement for sustainment and modernization of aircraft fleets. Comparable spending in this sector often involves significant investments in specialized components, with market dynamics influenced by technological advancements and geopolitical demands. The concentration of expertise within a few key manufacturers often leads to limited competition for highly specialized parts.

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

Oversight & Accountability

Oversight for this contract will likely fall under the Department of Defense's existing procurement regulations and the Air Force's program management. Accountability measures are typically embedded within the contract terms, including performance standards and delivery schedules. Transparency may be limited due to the sole-source nature of the award, but contract awards are generally reported in federal databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics Agency Contracts
Air Force Sustainment Programs
Specialized Manufacturing Services

Risk Flags

Sole-source award
Lack of competitive bidding
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.2 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 $40.2 million.

What is the period of performance?

Start: 2023-12-07. End: 2027-04-30.

What is L3Harris Technologies' track record with similar sole-source defense contracts?

L3Harris Technologies, and its predecessor companies, have a history of receiving sole-source and limited-competition contracts from the Department of Defense. These often involve specialized systems, upgrades, or sustainment services for existing platforms where they possess unique capabilities or intellectual property. Analyzing their past performance on similar sole-source awards can provide insight into their reliability, cost control, and adherence to contract terms. However, without specific data on past sole-source awards for aircraft parts, a direct comparison is difficult. Generally, large defense contractors are expected to have robust quality control and delivery systems, but the absence of competition means there's less external validation of their pricing and efficiency compared to competitive bids.

How does the $40 million value compare to other contracts for similar aircraft parts?

Directly comparing the $40 million value to 'similar' contracts is challenging without more specific details on the exact type of aircraft parts being procured. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category is broad. However, given the firm-fixed-price nature and the sole-source award, this value represents the negotiated price without competitive pressure. In a competitive environment, similar parts might be procured at a lower price point due to bidding. The duration of the contract (approximately four years) also means the annual spend is around $10 million, which is substantial but needs to be contextualized by the complexity and criticality of the parts. Benchmarking would ideally involve comparing unit costs or total contract values for identical or highly comparable components procured competitively.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude ($40 million) include potential overpricing, reduced innovation, and a lack of market discipline. Without competition, the government lacks the leverage to negotiate the best possible price, potentially leading to higher costs for taxpayers. The contractor may have less incentive to innovate or improve efficiency since there are no competitors vying for the business. Furthermore, a sole-source award can create a dependency on a single supplier, posing supply chain risks if the contractor faces production issues or decides to exit the market. The long performance period (over four years) exacerbates these risks by extending the duration of potential inefficiencies or cost escalations.

How effective is the firm-fixed-price (FFP) contract type in managing costs for this specific award?

The firm-fixed-price (FFP) contract type is generally considered effective in managing costs because it shifts the risk of cost overruns to the contractor. L3Harris Technologies is obligated to deliver the specified aircraft parts at the agreed-upon price, regardless of their actual costs. This provides the government with cost certainty. However, the effectiveness of FFP in this sole-source context is diminished. While the total price is fixed, the initial negotiation of that price might not have been as competitive as it would have been in an open bidding process. Therefore, while the government knows the total cost, that total cost might be higher than necessary due to the lack of competition, even with the FFP structure.

What are the historical spending patterns for 'BIG SAFARI' or similar aircraft parts contracts within the Air Force?

The provided data identifies 'BIG SAFARI' as the contract name, associated with the Department of the Air Force. Historical spending patterns for 'BIG SAFARI' or similar aircraft parts contracts within the Air Force are not detailed in the provided data snippet. However, the Air Force, like other branches of the DoD, consistently spends billions annually on aircraft sustainment, maintenance, and component replacement. Contracts for specialized parts can range from small, individual orders to large, multi-year agreements. Spending in this area is driven by fleet size, operational tempo, aircraft age, and modernization requirements. Sole-source awards for critical or unique components are not uncommon, but they are often subject to justification requirements to ensure they are in the government's best 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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $40,182,795

Exercised Options: $40,182,795

Current Obligation: $40,182,795

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $1,413,425

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