DoD Awards L3Harris $23M for ABS O&S Services, Extending Contract for Year Three

Contract Overview

Contract Amount: $23,074,950 ($23.1M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2023-09-15

End Date: 2024-09-14

Contract Duration: 365 days

Daily Burn Rate: $63.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: OPERATION AND SUSTAINMENT SERVICES FOR ABS (YEAR THREE).

Place of Performance

Location: TULSA, TULSA County, OKLAHOMA, 74115

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $23.1 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: OPERATION AND SUSTAINMENT SERVICES FOR ABS (YEAR THREE). Key points: 1. Contract value of $23.07M for one year of operation and sustainment services. 2. L3Harris Technologies Integrated Systems L.P. is the sole incumbent contractor. 3. The contract is a Cost Plus Award Fee type, indicating performance-based incentives. 4. Engineering Services (NAICS 541330) is the sector for this procurement.

Value Assessment

Rating: fair

The Cost Plus Award Fee structure can lead to higher costs if not managed effectively. Benchmarking against similar sustainment contracts is difficult without detailed performance metrics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, suggesting a sole-source award. Lack of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The absence of competition for this $23M contract raises concerns about potential overspending and the efficient use of taxpayer funds.

Public Impact

Missile defense system sustainment is critical for national security. Taxpayers may be paying a premium due to the lack of competitive bidding. The performance-based nature of the contract could drive efficiency if managed well.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
Cost Plus Award Fee can inflate costs
Lack of detailed performance data for benchmarking

Positive Signals

Critical sustainment services for missile defense
Potential for performance incentives

Sector Analysis

This contract falls under Engineering Services, a broad category often involving specialized technical support. Spending in this sector can vary widely based on project complexity and duration.

Small Business Impact

There is no indication of small business participation in this sole-source contract award. Opportunities for small businesses are likely limited in this specific procurement.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and effective performance. The Missile Defense Agency should provide detailed justifications for the lack of competition.

Related Government Programs

Engineering Services
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited transparency on performance metrics
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.1 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. OPERATION AND SUSTAINMENT SERVICES FOR ABS (YEAR THREE).

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 $23.1 million.

What is the period of performance?

Start: 2023-09-15. End: 2024-09-14.

What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities or the incumbent's established role. To ensure fair pricing, the agency should conduct thorough market research and potentially use independent cost estimates. Robust contract surveillance and performance monitoring are crucial to validate that the awarded price reflects value and that the contractor is meeting all performance requirements effectively.

How does the Cost Plus Award Fee structure incentivize L3Harris to control costs and maximize performance for the ABS O&S services?

The Cost Plus Award Fee (CPAF) structure aims to incentivize performance by allowing the contractor to earn a base fee plus an award fee based on meeting or exceeding defined performance objectives. For cost control, the 'cost' portion is subject to audit and negotiation, while the 'award' fee is tied to specific metrics. Effective implementation requires clear, measurable performance standards and objective evaluation criteria to ensure the award fee truly reflects superior performance and not just cost incurrence.

What is the long-term strategy for competition regarding ABS Operation and Sustainment services to ensure future cost-effectiveness?

The long-term strategy should involve planning for future competition, potentially by breaking down the services into smaller, more manageable components or by developing alternative solutions. The agency should explore opportunities to foster new market entrants or encourage existing competitors to develop capabilities. A phased approach, perhaps starting with a limited competition or a follow-on contract with clearer competition requirements, could pave the way for a fully competitive procurement in the future.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: $24,230,195

Exercised Options: $24,230,195

Current Obligation: $23,074,950

Actual Outlays: $4,445,903

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