DoD's $15.5M R&D contract with L3Harris Technologies shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $15,489,716 ($15.5M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-01-12

End Date: 2014-01-10

Contract Duration: 1,459 days

Daily Burn Rate: $10.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 17

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: TROPHY-HARRIS

Place of Performance

Location: PALM BAY, BREVARD County, FLORIDA, 32905

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $15.5 million to L3HARRIS TECHNOLOGIES, INC. for work described as: TROPHY-HARRIS Key points: 1. Contract awarded through full and open competition, suggesting a broad search for qualified vendors. 2. The contract's duration of nearly four years indicates a significant, long-term research and development effort. 3. Focus on R&D in physical, engineering, and life sciences points to innovation in critical defense capabilities. 4. The cost-plus-fixed-fee structure incentivizes cost control while allowing for flexibility in research scope. 5. L3Harris Technologies, a major defense contractor, brings substantial experience to this complex R&D project. 6. The contract's value, while substantial, needs to be benchmarked against similar R&D efforts for a complete value assessment.

Value Assessment

Rating: good

The contract's value of approximately $15.5 million over its duration appears reasonable for a complex R&D effort in the defense sector. Benchmarking against similar research and development contracts awarded by the Department of Defense for advanced physical and engineering sciences would provide a more precise value-for-money assessment. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, requires careful oversight to ensure costs remain within projected bounds and that the fixed fee adequately compensates the contractor for their efforts without excessive profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of Defense sought proposals from all responsible sources. While the specific number of bidders is not provided, this method generally fosters a competitive environment, driving down prices and encouraging innovation. The use of full and open competition suggests that the agency did not identify any specific barriers to entry or proprietary limitations that would restrict the pool of potential offerors.

Taxpayer Impact: Taxpayers benefit from the potential for better pricing and a wider range of innovative solutions due to the broad competitive field.

Public Impact

The primary beneficiaries are the Department of Defense and potentially U.S. warfighters, who will gain from advancements in physical, engineering, and life sciences research. The contract supports the development of new technologies and scientific understanding crucial for national security. The geographic impact is primarily centered in Florida, where L3Harris Technologies is located, potentially creating or sustaining high-skilled jobs in the region. The workforce implications include employment for scientists, engineers, and technical staff involved in cutting-edge research and development activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
The specific R&D outcomes and their direct applicability to defense needs require ongoing evaluation.
Reliance on a single large contractor, L3Harris Technologies, may limit opportunities for smaller, specialized firms in future procurements.

Positive Signals

Awarded through full and open competition, maximizing the potential for diverse technical solutions.
L3Harris Technologies is a reputable defense contractor with a proven track record in R&D.
The contract duration allows for in-depth research and development, potentially leading to significant technological advancements.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences (NAICS 541712). This sector is critical for defense innovation, driving advancements in areas such as materials science, aerospace engineering, and advanced computing. The market for defense R&D is characterized by significant government investment, long development cycles, and a need for highly specialized expertise. Comparable spending benchmarks would involve analyzing other DoD R&D contracts in similar scientific domains, considering factors like contract type, duration, and the specific technological areas being explored.

Small Business Impact

This contract was not awarded as a small business set-aside, and the data indicates no explicit subcontracting goals for small businesses were mandated. L3Harris Technologies, as a large prime contractor, may engage small businesses as subcontractors, but this is not guaranteed by the contract terms. The absence of specific set-aside provisions or subcontracting requirements means that the direct impact on the small business ecosystem for this particular contract is likely limited, though L3Harris's broader supply chain activities could still involve small firms.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance, compliance with contract terms, and proper cost accounting. Accountability measures are embedded within the CPFF structure, requiring the contractor to justify costs and achieve specific milestones. Transparency is facilitated through contract reporting requirements, though detailed R&D progress and specific spending breakdowns may be subject to proprietary or national security considerations. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Physical Sciences Research
Engineering Sciences Research
Life Sciences Research (non-biotech)
L3Harris Technologies Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Scope Creep Potential
Limited Competition Analysis Needed
Technology Transition Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.5 million to L3HARRIS TECHNOLOGIES, INC.. TROPHY-HARRIS

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $15.5 million.

What is the period of performance?

Start: 2010-01-12. End: 2014-01-10.

What is L3Harris Technologies' track record with similar R&D contracts awarded by the Department of Defense?

L3Harris Technologies, and its predecessor companies, have a substantial history of performing complex research and development contracts for the Department of Defense across various scientific and engineering disciplines. Their track record generally includes successful delivery of advanced technologies and research outcomes. Specific performance metrics, such as on-time delivery, budget adherence, and technical success rates on prior DoD R&D contracts, would require a detailed review of past performance evaluations and contract histories. However, as a major defense contractor, they are accustomed to the rigorous requirements and oversight associated with government R&D funding, suggesting a baseline capability and experience relevant to this contract.

How does the value of this $15.5 million contract compare to other DoD R&D contracts in physical, engineering, and life sciences?

The $15.5 million value for this nearly four-year R&D contract is within a common range for specific research projects within the physical, engineering, and life sciences sectors funded by the Department of Defense. However, the 'value' is highly dependent on the specific research objectives, the novelty of the work, and the criticality of the potential outcomes. Larger, more foundational research programs can easily exceed hundreds of millions of dollars, while smaller, more focused investigations might be in the low millions. To truly assess value-for-money, this contract's scope, deliverables, and the competitive landscape it was awarded under need to be compared against a statistically significant sample of similar DoD R&D contracts, considering factors like the specific scientific domain (e.g., materials science vs. AI research) and the maturity of the technology being developed.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to L3Harris Technologies, revolve around cost control and defining the scope of work for research and development. For the government, the risk is that the contractor may not be sufficiently incentivized to control costs, as all allowable costs are reimbursed. While the fixed fee provides a ceiling on profit, the potential for cost overruns remains. For the contractor, the risk lies in accurately estimating the costs and effort required for R&D, which is inherently uncertain. If costs exceed estimates significantly, the fixed fee might not adequately compensate them, although the CPFF structure is designed to shift much of the cost uncertainty risk to the government. Effective oversight and clear milestone definitions are crucial to mitigate these risks.

How does the 'full and open competition' award method impact the potential for innovation and cost savings?

Awarding a contract through 'full and open competition' significantly enhances the potential for both innovation and cost savings. By allowing all responsible sources to submit proposals, the government broadens the pool of potential innovators, increasing the likelihood of discovering novel approaches and technologies. This wider competition also puts downward pressure on prices, as contractors vie to offer the most compelling technical solution at the most competitive price. Furthermore, it ensures that the government is not limited to a single provider, fostering a more dynamic market and potentially leading to better long-term value. The process requires a clear statement of work and evaluation criteria to ensure fair comparison among diverse proposals.

What are the implications of this contract being in the 'Research and Development in the Physical, Engineering, and Life Sciences' category for national security?

Contracts in the 'Research and Development in the Physical, Engineering, and Life Sciences' category are fundamental to maintaining and advancing national security. This domain covers a vast array of critical technologies, including advanced materials, propulsion systems, sensor technology, cyber capabilities, and human performance enhancement. Investments in this area enable the development of next-generation military platforms, improved intelligence gathering, enhanced soldier protection, and more effective response capabilities to emerging threats. By funding R&D, the DoD aims to stay ahead of potential adversaries, ensure technological superiority, and adapt to the evolving geopolitical landscape. The specific focus of this contract would determine its precise contribution, but generally, it supports the long-term strategic advantage of the U.S.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 17

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 2400 PALM BAY RD NE, PALM BAY, FL, 32905

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,108,159

Exercised Options: $15,489,716

Current Obligation: $15,489,716

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline