DoD's $26.4M contract for aircraft parts awarded to L3Harris Technologies, Inc. without competition

Contract Overview

Contract Amount: $26,430,527 ($26.4M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-02-01

End Date: 2027-01-23

Contract Duration: 2,182 days

Daily Burn Rate: $12.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: UNIVERSAL MISSION DATA FILE GENERATOR

Place of Performance

Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to L3HARRIS TECHNOLOGIES, INC. for work described as: UNIVERSAL MISSION DATA FILE GENERATOR Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to higher costs if not carefully managed. 2. The sole-source nature of this award limits price discovery and potentially reduces value for taxpayer dollars. 3. A long performance period of 2182 days suggests a need for sustained support, but also raises concerns about long-term cost control. 4. The contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' a broad category that warrants further detail on specific components. 5. Awarded by U.S. Special Operations Command, indicating a focus on specialized defense needs. 6. The contract's value is relatively modest within the overall DoD spending landscape, but its lack of competition is a key concern.

Value Assessment

Rating: questionable

Assessing the value for money is challenging due to the sole-source award and cost-plus-fixed-fee structure. Without competitive bids, it's difficult to benchmark pricing against market rates or similar contracts. The fixed fee component provides some cost certainty for the contractor's effort, but the overall cost is subject to the actual expenses incurred in producing the aircraft parts. Further analysis would require access to the contractor's cost data and a comparison to independently estimated costs for similar parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or when urgency precludes a competitive process. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a bidding process. This limits the government's ability to ensure it is receiving the best possible price and terms.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing. Without the pressure of competition, the awarded contractor has less incentive to offer the lowest possible price, potentially leading to higher overall expenditure for the government.

Public Impact

U.S. Special Operations Command personnel and assets benefit from the availability of necessary aircraft parts. The contract ensures the continued operational readiness of specialized aircraft used in critical missions. The geographic impact is primarily within New Jersey, where L3Harris Technologies, Inc. is located. The contract supports jobs within the aerospace manufacturing sector, specifically in the production of aircraft components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
Cost-plus-fixed-fee contracts can incentivize cost overruns if not rigorously monitored.
The broad 'Other Aircraft Parts' category lacks specificity, making it difficult to assess the exact nature of goods procured.
Long contract duration could lead to price escalation if market conditions change significantly.

Positive Signals

Award to an established contractor, L3Harris Technologies, Inc., suggests a degree of reliability and existing capability.
The contract supports critical operational needs for U.S. Special Operations Command, ensuring mission readiness.
The fixed fee component provides some predictability regarding the contractor's profit margin.

Sector Analysis

The aerospace parts manufacturing sector is a critical component of the defense industrial base. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sub-sector. The market is characterized by specialized suppliers, high technological requirements, and significant government procurement. Comparable spending benchmarks are difficult to establish without knowing the specific parts, but the overall defense aerospace market is vast, with billions spent annually on aircraft components and sustainment.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor are there explicit subcontracting requirements mentioned in the provided data. As a sole-source award to a large corporation, it is unlikely to directly benefit small businesses through set-asides. However, L3Harris Technologies, Inc. may engage small businesses as subcontractors, which would be a positive impact on the small business ecosystem, but this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Special Operations Command contracting office. Accountability measures would be embedded in the contract's terms and conditions, including performance metrics and payment schedules tied to deliverables. Transparency is limited due to the sole-source nature and lack of public detail on specific parts. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

DoD Aircraft Parts Procurement
Special Operations Command Logistics
Aerospace Manufacturing Contracts
Sole-Source Defense Awards

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of detailed scope of work

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to L3HARRIS TECHNOLOGIES, INC.. UNIVERSAL MISSION DATA FILE GENERATOR

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 $26.4 million.

What is the period of performance?

Start: 2021-02-01. End: 2027-01-23.

What specific aircraft parts are being procured under this contract?

The provided data categorizes this contract under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS code 336413). This is a broad classification that encompasses a wide range of components beyond engines and airframes. Without further details, it is impossible to specify the exact parts. These could range from structural components, avionics parts, internal systems, or specialized equipment unique to U.S. Special Operations Command aircraft. Understanding the specific nature of these parts is crucial for assessing their criticality, potential for obsolescence, and the reasonableness of the contract's pricing structure.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar procurements?

Cost-plus-fixed-fee (CPFF) contracts are often used when the scope of work is not precisely defined or when there is significant uncertainty in the cost of performance, such as in research and development or complex manufacturing. In this case, the contractor (L3Harris Technologies, Inc.) is reimbursed for allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government, as the total cost is not capped. However, it can be advantageous when innovation or flexibility is paramount. For standard aircraft parts, fixed-price contracts are generally preferred by the government to ensure better price control and incentivize contractor efficiency. The use of CPFF here suggests either a highly specialized or evolving requirement.

What are the risks associated with awarding a sole-source contract for aircraft parts?

The primary risk of a sole-source award is the lack of price competition, which can lead to the government paying a higher price than if the contract were competed. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price. Additionally, sole-source awards can reduce transparency and limit opportunities for innovative solutions from other potential suppliers. In the context of aircraft parts, this could mean missing out on more cost-effective or technologically superior alternatives. It also raises concerns about the justification for sole-sourcing and whether adequate market research was conducted to ensure no other viable sources exist.

What is L3Harris Technologies, Inc.'s track record with the Department of Defense and U.S. Special Operations Command?

L3Harris Technologies, Inc. is a major defense contractor with a significant history of supplying various systems, components, and services to the Department of Defense (DoD) and its various components, including U.S. Special Operations Command (SOCOM). They are known for their work in areas such as aerospace, communications, and electronic systems. While specific performance metrics for this particular contract are not detailed, L3Harris generally has a substantial portfolio of contracts with the government. Their track record would typically be assessed through past performance evaluations on previous contracts, which are often considered during source selection processes, though less critically in sole-source situations.

How does the $26.4 million contract value compare to historical spending on similar aircraft parts by the DoD?

The $26.4 million contract value is a moderate sum within the vast annual budget of the Department of Defense. To provide a meaningful comparison, one would need to identify specific types of aircraft parts and their associated historical spending. For example, if these are common, high-volume parts, $26.4 million over approximately six years might be considered reasonable or even low. However, if they are highly specialized, low-volume, or custom-manufactured components for unique SOCOM platforms, the value could be justified. Without knowing the exact nature of the 'Other Aircraft Parts,' a direct historical spending comparison is speculative. However, the DoD spends billions annually on aircraft sustainment and parts.

What are the potential implications of the long performance period (2182 days) on cost and obsolescence?

A long performance period, such as the 2182 days (nearly six years) for this contract, presents both opportunities and risks. On the positive side, it can provide supply chain stability and predictability for critical aircraft parts, ensuring availability over an extended period. It may also allow for economies of scale in production. However, it also increases the risk of cost escalation if market prices for raw materials or labor rise significantly over the contract duration. Furthermore, a long period raises concerns about technological obsolescence; if the aircraft or its systems are upgraded, or if newer, more efficient parts become available, the contracted parts might become outdated or less effective, potentially leading to wasted expenditure.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: H9224117R0013

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 77 RIVER RD, CLIFTON, NJ, 07014

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

Financial Breakdown

Contract Ceiling: $28,920,205

Exercised Options: $26,430,527

Current Obligation: $26,430,527

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: H9224120D0001

IDV Type: IDC

Timeline