DoD Awards $30.3M for MQ-9 Reaper SATCOM DMS Upgrade to L3 Technologies

Contract Overview

Contract Amount: $30,281,201 ($30.3M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-12-14

End Date: 2025-05-14

Contract Duration: 882 days

Daily Burn Rate: $34.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: MQ-9 REAPER HARDWARE AND INSTALLATION DO UNDER COMMUNICATION REAPER INTEGRATED UPGRADE SOLUTIONS (CRIUS) IDIQ - SATCOM DMS

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to L3 TECHNOLOGIES, INC. for work described as: MQ-9 REAPER HARDWARE AND INSTALLATION DO UNDER COMMUNICATION REAPER INTEGRATED UPGRADE SOLUTIONS (CRIUS) IDIQ - SATCOM DMS Key points: 1. Significant investment in critical drone communication technology. 2. Sole-source award to L3 Technologies raises questions about competition. 3. Long-term contract (2025) suggests ongoing program needs. 4. Focus on SATCOM DMS indicates modernization of command and control.

Value Assessment

Rating: fair

The award price of $30.3M for hardware and installation appears to be a significant investment. Benchmarking against similar drone upgrade contracts is difficult without more detailed cost breakdowns, but the sole-source nature warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning competition was not sought. This limits price discovery and potentially leads to higher costs for taxpayers compared to a fully competed procurement.

Taxpayer Impact: The lack of competition may result in a higher cost to taxpayers than if multiple vendors had the opportunity to bid on this upgrade.

Public Impact

Enhances the communication capabilities of the MQ-9 Reaper, a key intelligence, surveillance, and reconnaissance (ISR) platform. Supports ongoing military operations by ensuring reliable satellite communication for drone control. Potential for increased operational effectiveness and data transmission for the Air Force.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Lack of transparency in cost breakdown.
Long-term contract duration may not reflect evolving technology needs.

Positive Signals

Addresses critical communication upgrade for a vital military asset.
Supports modernization of ISR capabilities.
Ensures continued operational readiness of MQ-9 fleet.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and upgrades. Spending in this area is driven by national security needs and technological advancements in military platforms.

Small Business Impact

The contract was awarded to L3 Technologies, Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for large sole-source defense contracts.

Oversight & Accountability

The sole-source nature of this award suggests it may have bypassed standard competitive oversight processes. Further review by the Inspector General or relevant oversight bodies could be warranted to ensure fair pricing and necessity.

Related Government Programs

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

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns due to limited negotiation.
Risk of vendor lock-in for critical technology.
Limited transparency on specific cost components.
Dependency on a single supplier for essential upgrades.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to L3 TECHNOLOGIES, INC.. MQ-9 REAPER HARDWARE AND INSTALLATION DO UNDER COMMUNICATION REAPER INTEGRATED UPGRADE SOLUTIONS (CRIUS) IDIQ - SATCOM DMS

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

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 $30.3 million.

What is the period of performance?

Start: 2022-12-14. End: 2025-05-14.

What specific technical advancements does the CRIUS IDIQ enable for the MQ-9 Reaper's SATCOM DMS, and how do these justify the sole-source award?

The CRIUS IDIQ likely enables enhanced data throughput, improved encryption, and more resilient satellite communication links for the MQ-9 Reaper. These advancements are crucial for maintaining situational awareness and command control in contested environments. The sole-source award may be justified if L3 Technologies possesses unique, proprietary technology or existing integration expertise essential for these specific upgrades, making competition impractical or detrimental to program timelines.

How does the $30.3 million cost compare to similar SATCOM upgrade contracts for unmanned aerial vehicles, and what cost-saving measures were explored given the sole-source nature?

Without specific comparable contract data for similar UAV SATCOM upgrades, a direct cost comparison is challenging. However, $30.3 million represents a substantial investment. Given the sole-source award, it's crucial to understand if the Air Force conducted thorough market research, negotiated aggressively on price, or explored alternative solutions. Transparency regarding the cost breakdown and justification for the final price is essential to assess value for taxpayer money.

What are the long-term implications of relying on a single vendor for critical MQ-9 communication upgrades, particularly regarding future technological evolution and potential supply chain risks?

Long-term reliance on a single vendor for critical communication upgrades can create a technology lock-in, potentially hindering the adoption of newer, more advanced solutions from other companies. It also concentrates supply chain risk with one entity. If L3 Technologies faces production issues or business challenges, it could directly impact the MQ-9's operational readiness. Diversification strategies or clear exit/transition plans should be considered for future procurements.

Industry Classification

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

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116

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: $31,394,620

Exercised Options: $31,394,620

Current Obligation: $30,281,201

Subaward Activity

Number of Subawards: 60

Total Subaward Amount: $14,709,522

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA868923D2012

IDV Type: IDC

Timeline