DoD's $591.9M R&D Contract with L3 Technologies: A Decade of Research and Development
Contract Overview
Contract Amount: $59,193,884 ($59.2M)
Contractor: L3 Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2011-06-30
End Date: 2021-03-01
Contract Duration: 3,532 days
Daily Burn Rate: $16.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: DATA LINKS COMMUNICATIONS
Place of Performance
Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $59.2 million to L3 TECHNOLOGIES, INC. for work described as: DATA LINKS COMMUNICATIONS Key points: 1. Significant investment in R&D, indicating a focus on technological advancement. 2. L3 Technologies, a major defense contractor, suggests established capabilities. 3. Long contract duration (10 years) may present risks of cost overruns or evolving needs. 4. The R&D sector (NAICS 541712) is crucial for national security and innovation.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee (CPFF) structure can lead to higher costs if not managed tightly. Without specific pricing data, it's difficult to benchmark against similar R&D contracts, but the large value suggests significant resource allocation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is generally positive for price discovery. However, the long duration and specialized nature of R&D may limit the number of truly competitive bids over its lifespan.
Taxpayer Impact: The substantial value of this contract represents a significant taxpayer investment in research and development, aiming for future technological benefits.
Public Impact
Supports advanced technological development within the Department of Defense. Potential for breakthroughs in physical, engineering, and life sciences research. Long-term commitment to a single contractor could impact market dynamics for specialized R&D services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (10 years) increases risk of scope creep and cost escalation.
- CPFF contract type can incentivize spending without strict cost controls.
- Lack of specific performance metrics makes assessing value for money challenging.
- Potential for vendor lock-in in a specialized R&D area.
Positive Signals
- Awarded through full and open competition, suggesting a competitive initial process.
- Contractor (L3 Technologies) is a well-established defense entity.
- Focus on R&D aligns with strategic national security goals.
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) sector. Spending in this area is critical for maintaining a technological edge, with benchmarks varying widely based on the specific research focus and project scale.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses. Large, long-term R&D contracts often involve prime contractors who may subcontract, but direct small business participation is not evident here.
Oversight & Accountability
The contract's long duration and CPFF structure necessitate robust oversight from the Defense Contract Management Agency (DCMA) to ensure costs are reasonable and work aligns with objectives. Regular reviews and performance monitoring are crucial.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Long contract duration (10 years) increases risk.
- Cost Plus Fixed Fee (CPFF) structure can lead to higher costs.
- Lack of specific performance metrics makes value assessment difficult.
- Potential for vendor lock-in in specialized R&D.
- Limited visibility into specific R&D outcomes.
Tags
research-and-development-in-the-physical, department-of-defense, ut, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.2 million to L3 TECHNOLOGIES, INC.. DATA LINKS COMMUNICATIONS
Who is the contractor on this award?
The obligated recipient is L3 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 $59.2 million.
What is the period of performance?
Start: 2011-06-30. End: 2021-03-01.
What specific technological advancements or capabilities were achieved through this $591.9M investment over ten years?
The contract focused on Research and Development in Physical, Engineering, and Life Sciences (NAICS 541712). Without detailed project reports or deliverables, it's impossible to quantify specific advancements. The value suggests substantial effort, potentially leading to innovations in areas like advanced materials, sensor technology, or complex systems engineering, but the ultimate return on investment hinges on the successful transition of research outcomes into operational capabilities.
Given the CPFF structure and decade-long duration, what mechanisms were in place to mitigate cost overruns and ensure L3 Technologies remained efficient?
Cost Plus Fixed Fee contracts inherently carry a risk of cost escalation. Mitigation likely relied on stringent oversight by the Defense Contract Management Agency (DCMA), including regular audits, progress reviews, and adherence to defined milestones. The 'fixed fee' component provides some incentive for the contractor to control costs to protect their profit margin. However, the long duration means evolving requirements and unforeseen challenges could still impact the final cost.
How did the full and open competition process ensure the best value was obtained for this long-term R&D requirement?
Full and open competition theoretically maximizes the pool of potential bidders, driving down prices and encouraging innovation. For a decade-long R&D contract, the initial competition likely focused on the contractor's capabilities, past performance, and proposed approach. However, the true test of value over time depends on effective contract management, adapting to research outcomes, and potentially re-evaluating the scope or competition if significant shifts occur or if the initial assumptions prove inaccurate.
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: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc
Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $60,794,134
Exercised Options: $60,794,134
Current Obligation: $59,193,884
Actual Outlays: $88,834
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $898,717
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-06-30
Current End Date: 2021-03-01
Potential End Date: 2021-03-01 00:00:00
Last Modified: 2022-03-24
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