DoD awards $1.9B contract to L3Harris for aircraft parts, raising questions about competition and value

Contract Overview

Contract Amount: $19,031,564 ($19.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2024-05-29

End Date: 2025-11-30

Contract Duration: 550 days

Daily Burn Rate: $34.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: T-2 PDM/MITD

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $19.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: T-2 PDM/MITD Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant contract value suggests a critical need for these aircraft parts. 3. The duration of the contract (550 days) indicates a sustained requirement. 4. Awarded by the Department of the Air Force, highlighting a specific military need. 5. The fixed-price contract type aims to control costs, but sole-source nature may negate this. 6. Lack of competition is a key risk indicator for this award.

Value Assessment

Rating: questionable

The total award amount of $1.9 billion is substantial. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The firm fixed-price nature of the contract is intended to provide cost certainty, but the absence of competition means the government cannot be assured it received the best possible price. Further analysis would be needed to determine if the unit costs are reasonable compared to historical data or industry standards for similar aircraft parts.

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. The Department of the Air Force did not solicit bids from multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means there was no opportunity for price negotiation or comparison among different suppliers, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for these aircraft parts due to the absence of a competitive bidding process. Without multiple offers, the government has less leverage to negotiate favorable pricing, potentially resulting in less value for the allocated funds.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, ensuring the operational readiness of aircraft. The contract delivers essential aircraft parts and auxiliary equipment, crucial for maintaining military aviation capabilities. The geographic impact is primarily within Texas, where L3Harris Technologies Integrated Systems L.P. is located. This contract supports jobs within the aerospace and defense manufacturing sector, particularly in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially inflates costs.
Lack of transparency in the procurement process due to no-bid award.
Potential for overpayment without competitive benchmarking.
Reliance on a single contractor for critical aircraft components.

Positive Signals

Firm fixed-price contract type provides cost certainty if managed effectively.
L3Harris is an established defense contractor with existing capabilities.
Award ensures continued supply of critical aircraft parts for military operations.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high technological demands, stringent quality control, and significant government procurement. The market size for aircraft parts manufacturing is substantial, driven by both military and commercial aviation needs. This specific award represents a significant portion of spending within this niche, likely supporting specialized components for 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 may limit opportunities for small businesses to participate directly in this specific procurement. However, L3Harris may engage small businesses as subcontractors, though this is not explicitly detailed.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of Defense's contracting and financial management systems. The Air Force contracting officers are responsible for monitoring performance and ensuring compliance with the contract terms. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics
Aerospace Components
Military Aircraft Maintenance

Risk Flags

Sole-source award
Lack of competition
High contract value
Potential for cost overruns without competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. T-2 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 $19.0 million.

What is the period of performance?

Start: 2024-05-29. End: 2025-11-30.

What is the historical spending pattern for this specific type of aircraft part with L3Harris Technologies?

Analyzing historical spending with L3Harris Technologies for similar aircraft parts is crucial for assessing the value of this $1.9 billion award. Without specific historical data for this contract line item (NAICS 336413), a direct comparison is challenging. However, if L3Harris has been a long-term supplier for these or comparable parts, the government might have existing data on unit costs and performance. A review of past contracts with L3Harris for related components could reveal trends in pricing, delivery times, and any cost overruns or savings. This historical context is vital for understanding if the current firm fixed-price award represents a fair market value, especially given its sole-source nature. The absence of competition necessitates a deeper dive into past performance to ensure taxpayer funds are used efficiently.

What specific justification was provided for the sole-source award, and does it align with federal procurement regulations?

Federal procurement regulations (e.g., FAR Part 6) outline specific circumstances under which a sole-source award is permissible, such as when only one responsible source can satisfy the agency's needs or in cases of urgent and compelling requirements. The justification for this $1.9 billion award to L3Harris Technologies would need to be formally documented and publicly available (often through sources like SAM.gov's Contract Opportunities). Common justifications include unique technical capabilities, proprietary technology, or a critical, time-sensitive need where competition would cause unacceptable delays. The Department of the Air Force must demonstrate that competition was indeed not feasible or would be detrimental to national security or mission accomplishment. Without access to the specific justification document, it's difficult to definitively assess its alignment with regulations, but the onus is on the agency to prove the necessity of a sole-source procurement for such a substantial contract.

How does the unit cost of these aircraft parts compare to industry benchmarks or similar government contracts?

Benchmarking the unit cost of these aircraft parts against industry standards or similar government contracts is essential for evaluating value for money, particularly given the sole-source nature of this $1.9 billion award. The provided data does not include specific unit costs or detailed product descriptions, making direct comparison difficult. However, the Defense Contract Audit Agency (DCAA) or the Government Accountability Office (GAO) often publish reports or conduct audits on pricing for major defense procurements. Additionally, databases like FPDS (Federal Procurement Data System) can be queried for comparable contracts, although finding exact matches for specialized aircraft parts can be challenging. If L3Harris has supplied these parts previously, historical contract data would be the most relevant benchmark. The absence of competition means the government relies heavily on internal cost analysis and historical data to ensure the pricing is fair and reasonable.

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

A sole-source contract of this magnitude ($1.9 billion) for critical aircraft components carries several significant risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most competitive rates. Secondly, it reduces the government's leverage in negotiating terms and conditions. Thirdly, it creates a dependency on a single supplier, which can be problematic if the contractor experiences production issues, financial instability, or decides to discontinue the product line. This dependency also limits the government's ability to pivot to alternative suppliers or technologies if needed. Furthermore, the absence of a competitive process can sometimes lead to less rigorous oversight of performance and quality, although this is mitigated by contract management practices. Finally, it raises concerns about transparency and fairness in the procurement process.

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

L3Harris Technologies is a well-established defense contractor with a significant history of working with the Department of Defense across various platforms and services. The company has a broad portfolio that includes integrated mission systems, communication systems, electronic warfare, and advanced sensors, many of which are critical for military aviation. Their track record with the DoD typically involves complex systems integration and manufacturing of specialized components. For aircraft parts specifically, L3Harris has been involved in supplying components for various aircraft programs. While specific performance metrics for this particular contract are not yet available, their general standing as a major defense supplier suggests they possess the technical capabilities and infrastructure to fulfill such an order. However, as with any large contractor, past performance reviews and contract compliance records would need to be examined for a comprehensive assessment.

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: $19,031,564

Exercised Options: $19,031,564

Current Obligation: $19,031,564

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $60,282

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