DoD Awards L3Harris $186.6M for Armed Overwatch Aircraft Manufacturing

Contract Overview

Contract Amount: $186,577,057 ($186.6M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2023-03-31

End Date: 2028-05-31

Contract Duration: 1,888 days

Daily Burn Rate: $98.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER TWO OA-1K ARMED OVERWATCH

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $186.6 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: DELIVERY ORDER TWO OA-1K ARMED OVERWATCH Key points: 1. Significant contract value for specialized aircraft. 2. Competition method was full and open, suggesting potential for competitive pricing. 3. Risk is moderate, given the specialized nature of armed aircraft. 4. Sector is Defense, specifically aircraft manufacturing.

Value Assessment

Rating: good

The contract value of $186.6 million over approximately five years appears reasonable for specialized armed aircraft. Benchmarking against similar complex defense procurements would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which generally promotes competitive pricing and allows for a broad range of potential contractors to bid. This method is expected to yield fair market value.

Taxpayer Impact: Taxpayer funds are being used for critical defense capabilities, with competition aiming to ensure efficient allocation of resources.

Public Impact

Enhances Air Force's close air support capabilities. Supports domestic aerospace manufacturing in Texas. Potential for follow-on contracts and sustainment services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in complex manufacturing.
Dependence on a single prime contractor for delivery.
Geopolitical factors impacting defense spending.

Positive Signals

Addresses a specific warfighter need.
Utilizes established manufacturing processes.
Awarded under competitive procedures.

Sector Analysis

This contract falls within the Defense sector, specifically aircraft manufacturing. Spending in this area is driven by national security needs and technological advancements. Benchmarks for similar complex aircraft development and production contracts are typically in the hundreds of millions to billions of dollars.

Small Business Impact

While the prime contractor is L3Harris Technologies, the contract may involve subcontracting opportunities for small businesses in the aerospace supply chain. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of Defense has robust oversight mechanisms for large contracts, including regular reporting requirements and performance reviews. The Air Force will monitor contract execution to ensure compliance and delivery of required capabilities.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Complexity of integrating weapon systems.
Potential for schedule delays in production.
Long-term sustainment and maintenance costs.
Evolving threat landscape requiring platform upgrades.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $186.6 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. DELIVERY ORDER TWO OA-1K ARMED OVERWATCH

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 $186.6 million.

What is the period of performance?

Start: 2023-03-31. End: 2028-05-31.

What is the projected operational readiness rate for the OA-1K Armed Overwatch aircraft upon delivery?

The projected operational readiness rate is a critical performance metric that will be detailed in the contract's statement of work and subsequent performance reports. It typically outlines the percentage of time the aircraft are expected to be mission-capable. The Air Force will likely track this closely through contractor reporting and independent assessments to ensure the investment yields a functional and reliable asset for combat operations.

How does the per-unit cost of the OA-1K compare to similar light attack aircraft programs?

A direct per-unit cost comparison is challenging without specific program data and considering the unique mission profile of the OA-1K. However, given its intended role and the firm fixed-price nature of the contract, the cost is expected to be competitive within the light attack and close air support aircraft market. Benchmarking against programs like the AT-6 Wolverine or A-29 Super Tucano, while differing in specifics, could offer some context.

What are the key performance indicators (KPIs) for L3Harris to meet regarding aircraft performance and reliability?

Key performance indicators will likely include metrics related to flight hours, mission success rates, system reliability (Mean Time Between Failures), and adherence to stringent safety and operational standards. The contract will specify acceptable thresholds for these KPIs, with potential penalties or incentives tied to performance. The Air Force will monitor these closely to ensure the aircraft meets its intended operational capabilities.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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: $191,426,643

Exercised Options: $191,118,938

Current Obligation: $186,577,057

Subaward Activity

Number of Subawards: 46

Total Subaward Amount: $27,620,769

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA863722DB001

IDV Type: IDC

Timeline