Air Force awards $206.7M contract for Armed Overwatch, with L3Harris Technologies as prime

Contract Overview

Contract Amount: $206,730,360 ($206.7M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2024-04-12

End Date: 2029-01-31

Contract Duration: 1,755 days

Daily Burn Rate: $117.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FA863724FB001 - DELIVERY ORDER 03 REQUIREMENTS IN ACCORDANCE WITH ATTACHMENT 01 - ARMED OVERWATCH STATEMENT OF WORK ON THE BASE IDIQ.

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $206.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: FA863724FB001 - DELIVERY ORDER 03 REQUIREMENTS IN ACCORDANCE WITH ATTACHMENT 01 - ARMED OVERWATCH STATEMENT OF WORK ON THE BASE IDIQ. Key points: 1. Contract value represents a significant investment in specialized aircraft capabilities. 2. Full and open competition suggests a robust market for these services. 3. The contract duration of over four years indicates a long-term need. 4. Fixed-price contract type aims to control costs and provide predictability. 5. Delivery order under a base IDIQ streamlines acquisition for ongoing requirements. 6. Focus on aircraft manufacturing highlights a key industrial sector for defense.

Value Assessment

Rating: good

The contract value of $206.7 million for the Armed Overwatch program appears reasonable given the specialized nature of aircraft manufacturing and the multi-year duration. Benchmarking against similar large-scale defense aircraft contracts would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, but actual performance and delivery will be key to confirming value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive environment is generally favorable for achieving fair market prices and encouraging innovation. The specific number of bidders and their proposals would offer further insight into the intensity of the competition and its impact on the final award price.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the government explores a wide range of potential solutions and providers.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches requiring specialized close air support capabilities. The contract will deliver specialized aircraft and associated support services for the Armed Overwatch program. The geographic impact is likely concentrated around operational deployment areas for the Air Force. Workforce implications may include skilled labor in aircraft manufacturing, maintenance, and support roles, primarily in Texas where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs within the delivery order.
Dependence on a single prime contractor for critical defense capabilities.
Risks associated with long-term sustainment and maintenance of specialized aircraft.

Positive Signals

Firm fixed-price contract helps mitigate cost uncertainty for the government.
Full and open competition suggests a healthy market and potential for competitive pricing.
Long contract duration allows for stable planning and execution of program requirements.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft manufacturing and support. The market for specialized military aircraft is characterized by high barriers to entry, significant R&D investment, and a limited number of prime contractors capable of fulfilling complex defense requirements. Spending in this area is driven by national security needs and technological advancements in aviation.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. However, as a large prime contract awarded to L3Harris Technologies, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on the prime contractor's strategy and the specific requirements of the Armed Overwatch program.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, requiring delivery of specified goods and services. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Close Air Support Aircraft Programs
Special Operations Forces Support Aircraft
Tactical Aircraft Manufacturing
Defense Aviation Services

Risk Flags

Long-term contract duration may introduce sustainment and obsolescence risks.
Dependence on a single prime contractor for critical capabilities.
Potential for scope creep if requirements are not tightly managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $206.7 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. FA863724FB001 - DELIVERY ORDER 03 REQUIREMENTS IN ACCORDANCE WITH ATTACHMENT 01 - ARMED OVERWATCH STATEMENT OF WORK ON THE BASE IDIQ.

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 $206.7 million.

What is the period of performance?

Start: 2024-04-12. End: 2029-01-31.

What is the historical spending pattern for the Armed Overwatch program or similar initiatives by the Department of Defense?

Historical spending on programs similar to Armed Overwatch, which focuses on providing specialized close air support, can vary significantly based on evolving military doctrine and threat assessments. While specific data for 'Armed Overwatch' prior to this award is not detailed here, the Department of Defense consistently invests billions annually in tactical aviation, including platforms for close air support, reconnaissance, and special operations. This includes funding for aircraft procurement, modification, sustainment, and associated training and operational support. For instance, programs like the A-10 Thunderbolt II sustainment, AC-130 gunship modernization, and development of new light attack aircraft (like the OA-X concept) represent comparable areas of investment. The $206.7 million awarded here for a delivery order under an IDIQ suggests a continuation or expansion of existing capabilities rather than a completely new program, implying prior budgetary allocations for related efforts.

How does the per-unit cost of the aircraft under this contract compare to market rates or similar government procurements?

Determining a precise per-unit cost is challenging without knowing the exact number of aircraft and associated support included in this $206.7 million delivery order. The contract is for 'requirements in accordance with Attachment 01 - Armed Overwatch Statement of Work,' which likely encompasses more than just the aircraft themselves, potentially including training, logistics, and initial sustainment. However, if we consider the unit cost of specialized military aircraft, figures can range from tens of millions to hundreds of millions of dollars per platform, depending on complexity, avionics, and mission capabilities. For example, advanced trainer aircraft or light attack platforms might cost $20-50 million, while more heavily armed and sophisticated aircraft could exceed $100 million. Without specific quantity and configuration details, a direct per-unit comparison is speculative. The firm fixed-price nature suggests the government has negotiated a defined cost for the specified scope.

What is L3Harris Technologies' track record with similar defense aviation contracts, particularly those involving specialized aircraft?

L3Harris Technologies, formed through the merger of L3 Technologies and Harris Corporation, has a substantial track record in defense contracting, including significant involvement in aviation systems and platforms. The company has a history of providing intelligence, surveillance, and reconnaissance (ISR) platforms, electronic warfare systems, avionics, and communication systems for military aircraft. They have also been involved in aircraft modification and integration programs. For instance, L3Harris has been a key player in programs like the C-130 program, providing upgrades and modifications, and has experience with special mission aircraft. Their expertise in integrating complex systems onto airborne platforms makes them a suitable candidate for programs like Armed Overwatch, which likely requires specialized modifications and mission equipment. Their performance on previous, similar contracts would be a key indicator of their capability to execute this delivery order successfully.

What are the primary risks associated with the performance of this contract, and what mitigation strategies are in place?

Primary risks for this contract include potential schedule delays in aircraft delivery or modification, performance issues with specialized systems, and cost overruns if the firm fixed-price contract doesn't adequately account for unforeseen technical challenges. Given the nature of specialized aircraft, integration risks for new or upgraded systems are also a concern. Mitigation strategies typically involve robust program management by the Air Force, detailed technical specifications in the Statement of Work, phased delivery schedules with performance checkpoints, and strong quality assurance processes. The firm fixed-price contract itself acts as a primary risk mitigation tool for the government by capping costs. L3Harris's own internal risk management processes, including technical expertise and supply chain management, are also crucial for successful performance.

How does the competition level (full and open) for this contract potentially impact the overall value and innovation received by the government?

A full and open competition generally leads to better value for the government by fostering a competitive environment where multiple contractors vie for the award. This typically drives down prices as companies offer their best terms to win the contract. Furthermore, a broader competition can spur innovation, as companies may propose unique technical solutions or efficiencies to differentiate themselves. In this case, the full and open competition for the Armed Overwatch delivery order suggests that the Air Force sought a wide range of capabilities, potentially leading to a more cost-effective solution and access to cutting-edge technologies or approaches that might not have emerged from a sole-source or limited competition. The specific number of bidders and the nature of their proposals would further illuminate the degree of competitive pressure and innovative solutions presented.

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: $206,730,360

Exercised Options: $206,730,360

Current Obligation: $206,730,360

Subaward Activity

Number of Subawards: 73

Total Subaward Amount: $103,656,650

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