DoD's $14.5M Manpack Kit contract awarded to L3Harris Technologies, Inc. without competition

Contract Overview

Contract Amount: $14,473,788 ($14.5M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-03-20

End Date: 2009-06-30

Contract Duration: 102 days

Daily Burn Rate: $141.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MANPACK KIT

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14610

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $14.5 million to L3HARRIS TECHNOLOGIES, INC. for work described as: MANPACK KIT Key points: 1. The contract's value of $14.5 million represents a significant investment in specialized communication equipment. 2. Awarded on a sole-source basis, the lack of competition raises questions about potential price inflation and limited market exploration. 3. The contract duration of 102 months suggests a long-term need for these specific communication capabilities. 4. The absence of small business set-aside indicates that opportunities for smaller firms in this specialized sector may have been overlooked. 5. The firm-fixed-price contract type aims to transfer risk to the contractor, but the lack of competition limits benchmarking. 6. The contract's primary purpose is to equip U.S. Special Operations Command with essential communication tools.

Value Assessment

Rating: questionable

Benchmarking the value of this $14.5 million contract is challenging due to its sole-source nature and the specialized 'MANPACK KIT' designation. Without competitive bids, it's difficult to ascertain if the price reflects fair market value or if L3Harris Technologies, Inc. was able to leverage its unique position. The contract's duration of over 8 years also makes a direct comparison to similar, shorter-term procurements problematic. Further analysis would require understanding the specific technical requirements and the availability of alternative solutions in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, L3Harris Technologies, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and may result in higher costs for the government compared to a fully competed contract. The absence of competition means taxpayers did not benefit from the potential cost savings that could arise from a bidding war among multiple suppliers.

Taxpayer Impact: The lack of competition means taxpayers may have paid a premium for this equipment, as there was no incentive for L3Harris Technologies, Inc. to offer the lowest possible price. This also limits transparency into the government's procurement process for this specific need.

Public Impact

U.S. Special Operations Command personnel will benefit from enhanced communication capabilities in the field. The contract delivers specialized 'MANPACK KIT' equipment, crucial for tactical operations. The geographic impact is likely global, supporting special operations missions worldwide. The contract supports a specialized segment of the defense manufacturing workforce within L3Harris Technologies, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits transparency and potential for better pricing.
Long contract duration could lock the government into a specific technology without exploring alternatives.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Awarded to a known defense contractor, L3Harris Technologies, Inc., suggesting established capabilities.
Firm-fixed-price contract type shifts cost overrun risk to the contractor.
Contract addresses a specific, likely critical, need for U.S. Special Operations Command.

Sector Analysis

This contract falls within the defense electronics and communications sector, specifically focusing on specialized equipment for military applications. The North American Industry Classification System (NAICS) code 334220, 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing,' encompasses companies involved in producing such hardware. The market for military communication systems is often characterized by high barriers to entry due to stringent technical requirements, security clearances, and established relationships with government agencies. Spending in this niche can be substantial, driven by the need for advanced, reliable, and secure communication solutions for defense operations.

Small Business Impact

The contract was not competed and there is no indication of a small business set-aside. This suggests that opportunities for small businesses to participate in this specific procurement, either as prime contractors or subcontractors, were not actively pursued or mandated. Without specific subcontracting plans or set-aside requirements, the impact on the small business ecosystem for this particular contract is likely minimal, potentially missing opportunities to foster innovation and competition from smaller, agile firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, with potential review by the U.S. Special Operations Command Inspector General. The firm-fixed-price nature of the award shifts some financial risk to the contractor. However, the sole-source award limits the transparency typically gained through a competitive process, making it harder to assess value for money and contractor performance against market alternatives. Accountability relies heavily on the government's ability to define and monitor contract deliverables against the agreed-upon price.

Related Government Programs

Tactical Communication Systems
Special Operations Forces Equipment
Defense Communications Procurement
Wireless Communication Equipment Manufacturing
Department of Defense Contracts

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Risk of technology obsolescence given contract length and start date.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.5 million to L3HARRIS TECHNOLOGIES, INC.. MANPACK KIT

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $14.5 million.

What is the period of performance?

Start: 2009-03-20. End: 2009-06-30.

What specific capabilities does the 'MANPACK KIT' provide, and why was it deemed necessary for U.S. Special Operations Command?

The 'MANPACK KIT' likely refers to a portable, integrated communication system designed for field deployment by special operations forces. These kits typically combine multiple communication functions such as radio, satellite, and data transmission capabilities into a ruggedized, man-portable package. They are crucial for enabling secure, reliable, and long-range communication in diverse and often hostile environments where traditional infrastructure is unavailable. The necessity for U.S. Special Operations Command stems from their unique operational requirements, which demand advanced, adaptable, and highly survivable communication tools to maintain command and control, situational awareness, and coordination during complex missions. The specific capabilities would include encryption, interoperability with other military systems, and resistance to electronic warfare.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?

Awarding a contract of $14.5 million on a sole-source basis carries several risks. Primarily, it eliminates the potential for price competition, which is a key mechanism for ensuring the government receives the best possible value. Without competing bids, the contractor, L3Harris Technologies, Inc., may have less incentive to offer the lowest price, potentially leading to higher costs for taxpayers. Furthermore, a sole-source award can stifle innovation by not exploring solutions from other potential vendors who might offer more advanced or cost-effective alternatives. It also reduces transparency in the procurement process, making it harder for oversight bodies and the public to verify that the government obtained fair market value. Finally, it can create a perception of favoritism or a lack of diligence in seeking competitive solutions.

How does the firm-fixed-price contract type interact with the sole-source award in terms of risk and value?

The firm-fixed-price (FFP) contract type is generally favorable to the government as it places the risk of cost overruns on the contractor, L3Harris Technologies, Inc. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. However, when combined with a sole-source award, the benefit of FFP is somewhat diminished. While the government knows its maximum liability, the absence of competition means the 'fixed price' itself may not be as competitive as it could have been. The government relies on the contractor's proposed price being reasonable, but without market benchmarks from competing bids, validating this reasonableness is more challenging. The value proposition of FFP is strongest in a competitive environment where contractors must price aggressively to win.

What is the significance of the NAICS code 334220 for this contract and the industry?

The North American Industry Classification System (NAICS) code 334220, 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing,' is significant as it categorizes the primary business activity of the contractor and the nature of the goods procured. This code indicates that L3Harris Technologies, Inc. is involved in manufacturing equipment essential for wireless communication. For this specific contract, it highlights that the 'MANPACK KIT' falls under this manufacturing domain. The code also helps in understanding the broader industry landscape, identifying potential competitors, and analyzing market trends within the defense and communications sectors. Companies operating under this NAICS code often require specialized expertise, significant R&D investment, and adherence to strict quality and security standards, particularly when serving defense clients.

Given the contract's start date in 2009, what are the implications of its long duration (102 months) for technology obsolescence?

A contract duration of 102 months (over 8 years), initiated in 2009, raises significant concerns about technology obsolescence, especially in the rapidly evolving field of communications. While the 'MANPACK KIT' might have represented cutting-edge technology at the time of award, the pace of technological advancement means that by the end of the contract period, the equipment could be outdated. This could lead to reduced effectiveness, increased maintenance costs, and interoperability issues with newer systems. The government might find itself locked into using older technology, potentially impacting mission effectiveness and requiring costly upgrades or replacements sooner than anticipated. The sole-source nature of the award further exacerbates this risk, as it may have discouraged the contractor from incorporating forward-looking technological advancements during the contract's long lifespan.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 1680 UNIVERSITY AVE, ROCHESTER, NY, 25

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,473,788

Exercised Options: $14,473,788

Current Obligation: $14,473,788

Contract Characteristics

Cost or Pricing Data: NO

Timeline