Air Force awards $39.6M for aircraft parts, with L3Harris Technologies securing the sole-source contract

Contract Overview

Contract Amount: $39,589,423 ($39.6M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2024-09-10

End Date: 2026-08-31

Contract Duration: 720 days

Daily Burn Rate: $55.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RJ-10 PDM/MITD

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $39.6 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: RJ-10 PDM/MITD Key points: 1. The contract's value of $39.6 million represents a significant investment in specialized aircraft components. 2. Sole-source procurement raises questions about potential price inflation and limited market engagement. 3. The fixed-price nature of the contract shifts some financial risk to the contractor. 4. This award falls within the broader defense sector's ongoing need for advanced aircraft sustainment. 5. The duration of 720 days suggests a need for sustained supply of these critical parts.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of the 'RJ-10 PDM/MITD' parts. Without competitive bids, it's difficult to ascertain if the $39.6 million represents a fair market price. The contract's fixed-price structure offers some cost certainty, but the lack of competition prevents a robust value-for-money assessment against alternative suppliers or solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3Harris Technologies was the only bidder considered. This approach bypasses the typical competitive bidding process, which can limit opportunities for other qualified suppliers to offer their services and potentially drive down costs through market forces. The lack of competition means the government did not benefit from a range of proposals and pricing strategies.

Taxpayer Impact: Taxpayers may be paying a premium for these aircraft parts due to the absence of competitive pressure. Without multiple bids, there's a reduced likelihood of securing the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are the U.S. Air Force units relying on the specified aircraft for their operations. The contract ensures the continued availability of critical 'RJ-10 PDM/MITD' components, essential for aircraft maintenance and readiness. The geographic impact is primarily within Texas, where L3Harris Technologies is located, potentially supporting local jobs and the regional economy. Workforce implications include the potential for continued employment at L3Harris for personnel involved in the manufacturing or supply of these parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may stifle innovation from other potential suppliers in the long term.
Specific part designation 'RJ-10 PDM/MITD' lacks public detail, hindering independent value assessment.

Positive Signals

Fixed-price contract provides cost certainty for the government once awarded.
L3Harris Technologies is an established defense contractor with existing capabilities.
Contract ensures critical parts availability for Air Force operations, supporting readiness.

Sector Analysis

The defense industry, particularly the segment focused on aircraft parts and sustainment, is characterized by high technological demands and long product lifecycles. Spending in this sector is driven by national security needs and the continuous requirement to maintain aging and advanced aircraft fleets. L3Harris Technologies operates within this complex market, often securing contracts through established relationships and specialized expertise. Comparable spending benchmarks are difficult to establish without more specific details on the 'RJ-10 PDM/MITD' components, but overall defense spending on aircraft parts and maintenance runs into billions annually.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests no specific subcontracting goals for small businesses were mandated within this award. This means that opportunities for small businesses to participate in fulfilling this contract, either as prime contractors or subcontractors, are likely limited. The absence of set-asides or subcontracting requirements may reduce the direct economic benefit to the small business ecosystem associated with this particular procurement.

Oversight & Accountability

Oversight for this contract will likely fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, with fewer public details available compared to competitively bid contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Defense Logistics Agency (DLA) Procurement
Air Force Sustainment Programs
L3Harris Technologies Contracts

Risk Flags

Sole-source award
Lack of competition
Limited public detail on specific parts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.6 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. RJ-10 PDM/MITD

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 $39.6 million.

What is the period of performance?

Start: 2024-09-10. End: 2026-08-31.

What is the specific function and criticality of the 'RJ-10 PDM/MITD' components being procured?

The specific designation 'RJ-10 PDM/MITD' refers to components critical for the operation and maintenance of certain Air Force aircraft. While public details are scarce, 'PDM' often stands for 'Performance Degradation Monitoring' or similar diagnostic systems, and 'MITD' could relate to 'Module Integrated Test Device' or a specific sub-assembly. These parts are likely essential for ensuring aircraft safety, operational readiness, and potentially for advanced system diagnostics. Their criticality stems from their role in maintaining the airworthiness and performance of high-value military assets, making their reliable supply a priority for the Air Force.

How does the $39.6 million award compare to historical spending on similar aircraft parts by the Air Force?

Direct historical spending comparisons for the specific 'RJ-10 PDM/MITD' components are not publicly available. However, the U.S. Air Force consistently spends billions of dollars annually on aircraft parts, maintenance, and sustainment. This $39.6 million award, while substantial for a single contract, represents a fraction of the total annual budget allocated to aircraft readiness. Without knowing the exact nature and quantity of these parts, or the typical price per unit, it's difficult to benchmark this specific award against broader historical trends. The sole-source nature also complicates direct price comparisons with past competitive awards.

What are the potential risks associated with awarding this contract on a sole-source basis?

The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not be securing the best possible price or value. Another risk is reduced transparency, as the justification for selecting a single source may not be fully disclosed or scrutinized. Furthermore, sole-sourcing can limit opportunities for innovation from other companies and may foster over-reliance on a single supplier, creating potential supply chain vulnerabilities if that supplier faces issues. This can also disincentivize other capable firms from investing in developing similar capabilities.

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

L3Harris Technologies is a major defense contractor with a significant and extensive track record of supplying various systems, components, and services to the Department of Defense. They have a well-established presence in areas related to aerospace, including aircraft sustainment, avionics, and electronic warfare systems. The company has secured numerous contracts, including sole-source awards, for specialized equipment. Their history with the DoD suggests a capacity to meet complex technical requirements and delivery schedules, though like any large contractor, specific contract performance can vary. Their experience in this domain makes them a logical, albeit sole, choice for specialized parts.

What are the implications of the firm fixed-price contract type for cost control and risk allocation?

A Firm Fixed Price (FFP) contract type is generally favored by the government for its cost control predictability. Under an FFP agreement, the contractor, L3Harris Technologies in this case, assumes the primary responsibility for all costs incurred to deliver the specified 'RJ-10 PDM/MITD' components. This means that if the contractor's costs exceed their initial estimates, their profit margin will be reduced, or they may incur a loss. Conversely, if their costs are lower than anticipated, their profit will be higher. This structure effectively transfers cost overrun risk from the government to the contractor, providing the government with a clear ceiling on its financial obligation for the contract scope.

How does this contract fit into the broader landscape of defense spending on aircraft sustainment and modernization?

This contract for 'RJ-10 PDM/MITD' components fits within the substantial and ongoing defense spending dedicated to aircraft sustainment and modernization. The U.S. military operates a vast and aging fleet of aircraft, requiring continuous investment in spare parts, maintenance, upgrades, and operational support to ensure readiness and technological relevance. Spending in this area is critical for national security and represents a significant portion of the defense budget. Contracts like this, even if sole-sourced and for specific parts, are essential cogs in the larger machinery of maintaining air superiority and operational capability across various Air Force platforms.

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

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: $39,589,423

Exercised Options: $39,589,423

Current Obligation: $39,589,423

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $37,350

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862021G4027

IDV Type: BOA

Timeline