DoD's $637M Big Safari contract awarded to L3Harris for aircraft parts, raising value concerns

Contract Overview

Contract Amount: $63,705,635 ($63.7M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2024-02-29

End Date: 2026-02-28

Contract Duration: 730 days

Daily Burn Rate: $87.3K/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 $63.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: BIG SAFARI Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. The contract's duration of two years suggests a need for ongoing support for critical systems. 3. Awarded to a single vendor, L3Harris, indicating a potential lack of market competition. 4. The 'Other Aircraft Parts' classification suggests a broad scope, potentially encompassing specialized components. 5. High dollar value indicates significant investment in aircraft sustainment or modernization.

Value Assessment

Rating: questionable

Benchmarking the value of this $637 million contract is challenging due to its sole-source nature and specific application within the 'Big Safari' program. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. However, the significant investment suggests a critical need for these specialized aircraft parts. Further analysis would require access to L3Harris's cost breakdown and comparisons to similar sole-source awards for comparable components.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. The government did not leverage market dynamics to secure the best possible price for these critical aircraft parts.

Public Impact

The U.S. Air Force benefits from the sustainment and potential enhancement of its aircraft fleet. Services delivered include the provision of specialized aircraft parts and auxiliary equipment. The geographic impact is primarily within the United States, with potential global implications for deployed aircraft. Workforce implications may include specialized manufacturing and engineering roles at L3Harris and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in sole-source procurements can obscure true value for money.
Potential for vendor lock-in due to specialized nature of 'Big Safari' program components.

Positive Signals

Award to a known contractor, L3Harris, suggests established capabilities.
High contract value indicates critical need and potential for significant operational impact.
Long-term contract duration (2 years) implies sustained support for vital assets.

Sector Analysis

The 'Big Safari' program is a highly specialized initiative within the Department of Defense, focusing on rapid development and acquisition of advanced aircraft and airborne systems. This contract falls within the aerospace and defense manufacturing sector, specifically concerning aircraft parts and auxiliary equipment. The market for such specialized components is often characterized by limited suppliers and high barriers to entry, making sole-source awards more common. Comparable spending benchmarks are difficult to establish due to the unique nature of 'Big Safari' requirements.

Small Business Impact

This contract does not appear to include specific small business set-asides, as indicated by 'sb: false'. The prime contractor, L3Harris Technologies, is a large aerospace and defense company. While large prime contractors are often required to subcontract a portion of their work to small businesses, the absence of a specific set-aside suggests that opportunities for small businesses may not have been explicitly prioritized in the initial contract award. Further review of subcontracting plans would be necessary to assess the actual impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. L3Harris, as a major defense contractor, is subject to various federal regulations and oversight mechanisms, including audits and performance reviews. Transparency regarding the specifics of sole-source awards can be limited, but the Government Accountability Office (GAO) and the Department of Defense Inspector General (DoDIG) can investigate contract-related issues if concerns arise regarding procurement integrity or performance.

Related Government Programs

Big Safari Program
Air Force Special Operations Command (AFSOC) programs
Advanced Aircraft Development
Specialized Aviation Components

Risk Flags

Sole-source award raises concerns about price competition.
Lack of transparency in sole-source justifications can obscure value for money.
Potential for contractor lock-in due to specialized nature of 'Big Safari' program.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.7 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 $63.7 million.

What is the period of performance?

Start: 2024-02-29. End: 2026-02-28.

What is the specific nature of the 'BIG SAFARI' program and why does it necessitate a sole-source award for aircraft parts?

The 'BIG SAFARI' (Special<seg_35> Aircraft Fielding And Readiness Integration) program is an Air Force initiative focused on rapidly developing, acquiring, and fielding specialized aircraft and airborne systems to meet urgent operational needs. These programs often involve cutting-edge technology, unique modifications, or highly specialized platforms that may only be supported by a single original equipment manufacturer (OEM) or a highly specialized integrator. In this case, the sole-source award to L3Harris Technologies suggests that they are the sole provider or possess unique capabilities essential for the specific aircraft parts or auxiliary equipment required by the 'BIG SAFARI' program, making competitive procurement impractical or detrimental to national security interests.

How does the firm fixed price contract type impact the risk allocation between the government and L3Harris?

A Firm Fixed Price (FFP) contract type generally places the majority of the cost risk on the contractor, L3Harris Technologies. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This means that if L3Harris's costs for producing these aircraft parts exceed their initial estimates, they will absorb the loss. Conversely, if their costs are lower than anticipated, they will realize a higher profit margin. This contract structure incentivizes L3Harris to manage its costs efficiently and perform the work within the agreed-upon budget, while providing the government with cost certainty.

What are the potential risks associated with a sole-source award of this magnitude ($637 million)?

A sole-source award of $637 million carries several potential risks. Firstly, the lack of competition means the government may not be achieving the best possible price, potentially leading to overpayment. Secondly, it can foster vendor dependency, making it difficult or costly to switch providers in the future. Thirdly, without competitive pressure, there might be less incentive for the contractor to innovate or improve efficiency beyond what is contractually required. Finally, sole-source procurements can sometimes face greater scrutiny regarding justification and fairness, potentially leading to protests or investigations if not properly documented and executed.

Can the value of this contract be benchmarked against similar sole-source awards for aircraft parts?

Benchmarking the value of this $637 million contract against similar sole-source awards for aircraft parts is challenging due to the inherent specificity of 'Big Safari' requirements and the nature of sole-source procurements. Each sole-source award is typically justified by unique technical requirements, proprietary technology, or limited supplier availability. To perform a meaningful benchmark, one would need access to detailed specifications of the parts, the contractor's cost breakdown, and data on other sole-source contracts for highly specialized, non-commercial aircraft components. Publicly available data on such specific, sole-source procurements is often limited, making direct comparisons difficult and potentially unreliable.

What is L3Harris Technologies' track record with the Department of Defense, particularly on large sole-source contracts?

L3Harris Technologies, and its predecessor companies, have a long-standing and extensive track record of contracting with the Department of Defense (DoD). They are a major defense contractor involved in a wide array of programs, including intelligence, surveillance, reconnaissance (ISR), electronic warfare, communications, and aviation systems. While specific details on all their sole-source awards are not publicly itemized, their significant presence in the defense sector suggests they have experience managing large, complex sole-source contracts. Their performance history with the DoD is generally considered robust, though like any large contractor, they may have faced specific performance or cost challenges on individual contracts that are subject to review and oversight.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: $95,970,071

Exercised Options: $63,705,635

Current Obligation: $63,705,635

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $381,054

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862021G4027

IDV Type: BOA

Timeline