L3Harris Technologies awarded $301M for Missile Defense Agency engineering services, with contract performance rated 'OK'

Contract Overview

Contract Amount: $30,145,610 ($30.1M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2022-03-09

End Date: 2024-11-29

Contract Duration: 996 days

Daily Burn Rate: $30.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: MISSION EXECUTION

Place of Performance

Location: TULSA, TULSA County, OKLAHOMA, 74115

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $30.1 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: MISSION EXECUTION Key points: 1. Contract performance has been rated as 'OK', indicating satisfactory execution of mission objectives. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. The 'OK' status for system performance suggests no major issues but may not reflect optimal efficiency. 4. The duration of the contract (996 days) is substantial, requiring ongoing monitoring of service delivery. 5. The 'OK' rating for mission execution implies the contractor is meeting core requirements. 6. The absence of small business set-asides means direct opportunities for small businesses are limited.

Value Assessment

Rating: fair

The contract's value of $301 million for engineering services is significant. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The 'OK' rating for performance suggests that the services delivered are meeting expectations, but it does not necessarily indicate exceptional value or cost-effectiveness compared to what might have been achieved through competition. Further analysis would be needed to assess if the 'COST PLUS AWARD FEE' structure incentivized efficiency.

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 approach is typically used when only one source is capable of meeting the requirement. The lack of competition limits the government's ability to solicit multiple bids and potentially negotiate a lower price. It also means that the market dynamics that drive competitive pricing were not leveraged in this instance.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the benefits of competitive pressure on pricing are absent.

Public Impact

The primary beneficiary is the Missile Defense Agency, which receives critical engineering support for its programs. The services delivered are essential for the development, integration, and sustainment of missile defense systems. The geographic impact is primarily within the Department of Defense's operational and research facilities. The contract supports a workforce of engineers and technical specialists employed by L3Harris Technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source awards can reduce transparency in pricing.
Performance rated 'OK' suggests room for improvement in efficiency or effectiveness.

Positive Signals

Contract performance rated 'OK' indicates satisfactory delivery of services.
L3Harris Technologies is a known entity in defense contracting, suggesting a degree of reliability.
The contract duration allows for sustained support to the agency's mission.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's complex missile defense programs. The market for specialized defense engineering services is often characterized by high barriers to entry due to technical expertise and security clearances required. Spending in this area is driven by national security priorities and technological advancements in threat detection and response. Comparable spending benchmarks are difficult to establish without more specific details on the scope of engineering work.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award to a large prime contractor, there are no direct set-aside provisions for small businesses. Subcontracting opportunities for small businesses may exist, but these are determined by the prime contractor's procurement strategy and are not mandated by the contract structure itself. This limits direct opportunities for small businesses to participate in this specific contract.

Oversight & Accountability

Oversight for this contract is managed by the Department of Defense, likely through the Missile Defense Agency's contracting and program management offices. The 'OK' ratings for performance and mission execution suggest that existing oversight mechanisms are identifying and addressing performance levels. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Aerospace Engineering Services
Department of Defense Research and Development
Advanced Technology Development Contracts

Risk Flags

Sole-source award limits competition.
Performance rated 'OK' suggests potential for improvement.
Cost-plus contract types require diligent oversight to manage costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.1 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. MISSION EXECUTION

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $30.1 million.

What is the period of performance?

Start: 2022-03-09. End: 2024-11-29.

What is L3Harris Technologies' track record with the Missile Defense Agency and similar defense contracts?

L3Harris Technologies is a major defense contractor with a significant history of performing complex engineering and technology services for the Department of Defense, including the Missile Defense Agency (MDA). Their track record generally involves supporting large-scale, high-technology programs. While specific performance metrics for past MDA contracts are not detailed here, the 'OK' rating on this current contract suggests satisfactory performance. However, a deeper dive into historical contract awards, performance reviews, and any past issues or successes with the MDA would provide a more comprehensive understanding of their reliability and capability in this specific domain.

How does the 'OK' performance rating compare to industry benchmarks for similar engineering services contracts?

An 'OK' performance rating generally signifies that the contractor is meeting the basic requirements of the contract without significant deficiencies, but also without exceeding expectations or demonstrating exceptional performance. In the context of defense engineering services, 'OK' is often considered satisfactory but not outstanding. Industry benchmarks can vary widely depending on the complexity and criticality of the services. While 'OK' indicates the mission is being executed, it suggests there may be opportunities for improved efficiency, innovation, or cost savings that are not being realized. A rating of 'Exceptional' or 'Very Good' would typically indicate a stronger value proposition.

What are the primary risks associated with a sole-source award for engineering services of this magnitude?

The primary risks associated with a sole-source award of this magnitude ($301 million) include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or optimize costs, and a lack of transparency in the pricing structure. There's also a risk that the government may not be receiving the best possible value for its investment. Furthermore, reliance on a single source can create vulnerabilities if the contractor faces performance issues, financial instability, or other disruptions. Ensuring robust oversight and clear performance metrics becomes even more critical in sole-source situations.

What is the historical spending pattern for engineering services by the Missile Defense Agency, and how does this contract fit?

The Missile Defense Agency (MDA) historically spends billions of dollars annually on research, development, testing, and evaluation (RDT&E) to advance missile defense capabilities. Engineering services are a critical component of this spending, encompassing system design, integration, software development, and technical support. This $301 million contract for engineering services fits within the broader pattern of MDA's significant investment in acquiring and maintaining complex missile defense systems. Without specific historical data on similar sole-source engineering contracts, it's challenging to pinpoint its exact position relative to past spending, but it represents a substantial allocation for specialized technical support.

What are the implications of the 'COST PLUS AWARD FEE' (CPAF) contract type for cost control and contractor performance?

The 'COST PLUS AWARD FEE' (CPAF) contract type aims to balance cost reimbursement with performance incentives. The contractor is reimbursed for allowable costs incurred, plus a fee that consists of a base amount (often a percentage of costs) and an award amount. The award amount is determined by the government based on the contractor's performance against pre-defined criteria. This structure incentivizes the contractor to perform well to earn the maximum fee. However, it requires careful government oversight to establish objective performance metrics and to fairly assess the award fee, ensuring it drives desired outcomes without encouraging unnecessary cost growth.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ085521R0001

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 6501 E APACHE ST, TULSA, OK, 74115

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,109,861

Exercised Options: $32,109,861

Current Obligation: $30,145,610

Actual Outlays: $6,265,513

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ085521D0001

IDV Type: IDC

Timeline