L3Harris Technologies awarded $24.5M contract for aircraft parts by U.S. Special Operations Command

Contract Overview

Contract Amount: $24,527,483 ($24.5M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-05-03

End Date: 2028-07-16

Contract Duration: 1,535 days

Daily Burn Rate: $16.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: HALO S QUALIFICATION

Place of Performance

Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $24.5 million to L3HARRIS TECHNOLOGIES, INC. for work described as: HALO S QUALIFICATION Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns. 2. The contract duration of over 4 years suggests a long-term need for these specialized parts. 3. Awarded to L3Harris Technologies, a major defense contractor with a significant presence in the sector. 4. The specific nature of 'Other Aircraft Parts' indicates a niche requirement within aviation. 5. Lack of competition limits opportunities for other suppliers and potentially impacts cost savings.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The Cost Plus Fixed Fee (CPFF) structure means the government pays the contractor's allowable costs plus a fixed fee, which can lead to higher overall costs if not carefully managed. Without comparable contract data or market analysis, it's difficult to definitively assess if the pricing represents good value for money. The extended duration and specialized nature of the parts may justify higher costs, but transparency is limited.

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. This typically occurs when only one responsible source is available or when a compelling justification exists for not seeking competition. The lack of a competitive bidding process means that potential cost savings that could arise from multiple vendors vying for the contract are foregone. This approach can also limit innovation and the introduction of new technologies from a broader supplier base.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. The government's ability to negotiate the best possible price is diminished in a sole-source scenario.

Public Impact

Special Operations Command personnel will benefit from the continued availability of critical aircraft parts. Ensures the operational readiness and effectiveness of specialized aircraft used in sensitive missions. The contract supports specialized manufacturing and supply chain activities within the aerospace and defense sector. Potential indirect benefits to the workforce employed by L3Harris Technologies and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Cost Plus Fixed Fee (CPFF) contract type can incentivize higher costs if not rigorously managed.
Lack of transparency in pricing due to no competitive bidding process.
Long contract duration (over 4 years) may obscure current market price fluctuations.
Specifics of 'Other Aircraft Parts' are not detailed, making independent value assessment difficult.

Positive Signals

Awarded to a known, established defense contractor (L3Harris Technologies) with existing expertise.
Ensures continued supply of potentially critical and specialized aircraft components for SOCOM.
Contract duration provides stability and predictability for supply chain management.
Fixed fee component in CPFF provides some level of cost predictability for the contractor's profit.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components is often characterized by high barriers to entry due to technical expertise, certifications, and long development cycles. While the broader aircraft parts manufacturing industry is substantial, niche segments like those supporting special operations equipment can be dominated by a few key suppliers. Benchmarking spending in this specific sub-sector is difficult without more detailed product information, but overall defense spending on aircraft sustainment and parts is in the billions annually.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the sole-source nature and the likely specialized requirements for aircraft parts, it is probable that L3Harris Technologies will fulfill the contract directly or through its established supply chain. Subcontracting opportunities for small businesses may exist but are not explicitly mandated or detailed in the award information. The impact on the broader small business ecosystem is likely minimal unless L3Harris actively engages small businesses for specialized components.

Oversight & Accountability

Oversight for this contract will primarily reside with the U.S. Special Operations Command (SOCOM) contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing of allowable costs by the government will be crucial to ensure the fixed fee remains appropriate and costs are controlled. Transparency is limited due to the sole-source award, but contract performance reviews and milestone tracking should be part of the oversight process. The Department of Defense's Inspector General may also conduct audits or investigations as deemed necessary.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Special Operations Forces Equipment
Defense Logistics and Sustainment
Aerospace Component Supply

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of detailed scope definition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.5 million to L3HARRIS TECHNOLOGIES, INC.. HALO S QUALIFICATION

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 $24.5 million.

What is the period of performance?

Start: 2024-05-03. End: 2028-07-16.

What is the specific nature of the 'Other Aircraft Parts' being procured under this contract?

The provided data classifies the North American Industry Classification System (NAICS) code as 336413, which pertains to 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This broad category encompasses a wide range of components beyond engines and airframes, potentially including avionics, landing gear, electrical systems, hydraulic components, and other specialized equipment. Without further details from the contract award announcement or supporting documentation, the exact nature of these parts remains unspecified. This lack of specificity makes it challenging to assess the technical complexity, criticality, and precise market value of the items being procured.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar aircraft parts?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined, or when there is uncertainty about the costs involved, such as in research and development or specialized manufacturing. In this case, the government agrees to pay the contractor's allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government, as the final price can fluctuate based on actual costs incurred. However, it can be advantageous when innovation or flexibility is required. For standard, well-defined aircraft parts, fixed-price contracts typically offer better value and cost control for the government. The CPFF structure here suggests potential complexities or uncertainties in the production or sourcing of these specific parts.

What are the potential risks associated with a sole-source award for specialized aircraft parts?

Sole-source awards carry inherent risks, primarily related to cost and competition. Without competitive bidding, the government loses the opportunity to leverage market forces to achieve the lowest possible price. This can lead to inflated costs if the sole provider does not face sufficient pressure to be efficient. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain; any disruption at the contractor's end could significantly impact the government's operational readiness. There's also a reduced incentive for the contractor to innovate or improve processes aggressively, as they are not competing against others for future business. Transparency in pricing and cost justification is also often lower in sole-source scenarios.

What is L3Harris Technologies' track record with U.S. Special Operations Command (SOCOM) and similar contracts?

L3Harris Technologies is a major defense contractor with extensive experience serving various branches of the U.S. military, including SOCOM. They have a history of providing a wide range of products and services, including avionics, communication systems, and aircraft modifications. While specific details of their past performance with SOCOM on contracts for 'Other Aircraft Parts' are not provided here, their established presence suggests a capacity to meet the requirements. However, a thorough review would involve examining past performance evaluations, any past issues or disputes, and their overall success rate on similar sole-source or competed contracts within the defense sector.

How does the $24.5 million contract value compare to historical spending on aircraft parts by SOCOM or the Department of Defense?

The $24.5 million contract value is significant but needs to be viewed within the context of overall Department of Defense (DoD) and U.S. Special Operations Command (SOCOM) spending. The DoD's annual budget runs into hundreds of billions of dollars, with a substantial portion allocated to aircraft procurement, sustainment, and maintenance. SOCOM, while a smaller component, has specific and often high-value needs for specialized equipment. A $24.5 million contract for specialized aircraft parts over approximately four years is likely a moderate to significant award within SOCOM's portfolio for this category. To provide a precise comparison, one would need to analyze historical spending trends for similar 'Other Aircraft Parts' categories, factoring in inflation and changes in operational tempo and equipment modernization.

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: $28,114,016

Exercised Options: $24,527,483

Current Obligation: $24,527,483

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