L3 Technologies awarded $20.5M for mobile hotspots program development and testing

Contract Overview

Contract Amount: $20,466,371 ($20.5M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-03-13

End Date: 2017-04-30

Contract Duration: 1,144 days

Daily Burn Rate: $17.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 27

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THE CONTRACTOR WILL PERFORM PHASES 2 AND 3 (IF OPTION IS EXERCISED) OF THE MOBILE HOTSPOTS PROGRAM. THE CONTRACTOR WILL DEVELOP, INTEGRATE, DOCUMENT, AND REVIEW THE DESIGN FOR THE MOBILE HOTSPOTS AIR, GROUND, AND COMPACT GROUND SYSTEMS, AND TO CONDUCT GROUND RING AND FLIGHT TESTING TO VERIFY SYSTEM PERFORMANCE IN A FIELD ENVIRONMENT.

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to L3 TECHNOLOGIES, INC. for work described as: THE CONTRACTOR WILL PERFORM PHASES 2 AND 3 (IF OPTION IS EXERCISED) OF THE MOBILE HOTSPOTS PROGRAM. THE CONTRACTOR WILL DEVELOP, INTEGRATE, DOCUMENT, AND REVIEW THE DESIGN FOR THE MOBILE HOTSPOTS AIR, GROUND, AND COMPACT GROUND SYSTEMS, AND TO CONDUCT GROUND RING AND FLIGHT TESTI… Key points: 1. Contract focuses on advanced system development and field verification. 2. Significant investment in R&D for physical and engineering sciences. 3. Competition level indicates potential for fair market pricing. 4. Contract duration suggests a complex, multi-phase project. 5. Performance testing is a key component, indicating a focus on reliability. 6. Geographic focus on Utah for testing activities.

Value Assessment

Rating: good

The contract value of $20.5 million for a multi-year R&D effort appears reasonable given the scope of developing and testing complex mobile hotspot systems. Benchmarking against similar defense R&D contracts for system integration and testing would provide a more precise value-for-money assessment. The cost-plus-fixed-fee structure incentivizes the contractor to manage costs while ensuring completion of defined objectives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing. The presence of 27 proposals indicates a robust bidding process.

Taxpayer Impact: Full and open competition typically leads to better value for taxpayers by driving down costs through market forces.

Public Impact

The Department of Defense is the primary beneficiary, receiving advanced mobile hotspot technology. Services delivered include system development, integration, documentation, and rigorous testing. Geographic impact is concentrated in Utah for flight and ground testing. Workforce implications include specialized engineering and technical roles for system development and testing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts.
Complexity of integrating and testing advanced systems could lead to schedule delays.
Reliance on specific technical expertise may limit future contractor flexibility.

Positive Signals

Clear objectives for system development and performance verification.
Awarded through full and open competition, suggesting competitive pricing.
Inclusion of flight and ground testing ensures practical validation of the technology.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical and engineering sciences. The market for advanced communication systems and mobile hotspot technology is competitive, with significant government investment driven by defense and security needs. Comparable spending benchmarks would involve other DoD contracts for similar system development and testing efforts, often in the tens to hundreds of millions of dollars depending on scale and complexity.

Small Business Impact

The contract data does not indicate any specific small business set-asides or subcontracting requirements. Given the nature of advanced R&D and system integration, prime contractors like L3 Technologies often manage complex supply chains, but the direct impact on small businesses is not detailed here. Further analysis would be needed to determine if small business participation was mandated or occurred organically.

Oversight & Accountability

Oversight is likely managed by the Defense Contract Management Agency (DCMA), responsible for contract administration and ensuring contractor compliance. Accountability measures would be tied to the cost-plus-fixed-fee structure and performance milestones. Transparency is facilitated through contract award databases, though detailed technical progress reports may be considered sensitive.

Related Government Programs

Department of Defense Research and Development Programs
Mobile Communication Systems Development
Aerospace and Defense Technology Integration
Advanced Sensor and Network Technology

Risk Flags

Cost-plus contract structure carries inherent cost escalation risks.
Complexity of system integration and testing may lead to schedule slippage.
Dependence on specific technical expertise could limit future adaptability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to L3 TECHNOLOGIES, INC.. THE CONTRACTOR WILL PERFORM PHASES 2 AND 3 (IF OPTION IS EXERCISED) OF THE MOBILE HOTSPOTS PROGRAM. THE CONTRACTOR WILL DEVELOP, INTEGRATE, DOCUMENT, AND REVIEW THE DESIGN FOR THE MOBILE HOTSPOTS AIR, GROUND, AND COMPACT GROUND SYSTEMS, AND TO CONDUCT GROUND RING AND FLIGHT TESTING TO VERIFY SYSTEM PERFORMANCE IN A FIELD ENVIRONMENT.

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $20.5 million.

What is the period of performance?

Start: 2014-03-13. End: 2017-04-30.

What is the track record of L3 Technologies, Inc. in performing similar complex R&D and system integration contracts for the Department of Defense?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a substantial history of performing complex research, development, and integration contracts for the Department of Defense and other government agencies. Their expertise spans various domains, including aerospace, communications, electronic systems, and information technology. Prior to its merger, L3 Technologies was known for its work on intelligence, surveillance, and reconnaissance (ISR) systems, avionics, and secure communication solutions. Analyzing their past performance on cost-plus contracts, adherence to schedules, and successful delivery of technologically advanced systems would be crucial. Specific contract performance metrics, such as past performance ratings and any documented issues or successes on similar programs, would provide a clearer picture of their capability to execute this mobile hotspots program effectively.

How does the awarded amount of $20.5 million compare to the typical cost of developing and testing advanced mobile hotspot systems for military applications?

The $20.5 million awarded to L3 Technologies for Phases 2 and 3 of the mobile hotspots program appears to be a moderate investment for the development, integration, documentation, and testing of air, ground, and compact ground systems. The cost of such R&D efforts can vary significantly based on the complexity of the technology, the required performance specifications, the number of system variants, and the rigor of the testing protocols. For advanced, ruggedized, and secure communication systems intended for military use, development costs can easily run into the tens of millions. If this contract covers the full lifecycle from detailed design through extensive field and flight testing, the amount seems within a reasonable range, especially considering the need for specialized hardware, software, and testing infrastructure. A more precise comparison would require benchmarking against other DoD contracts for similar communication system development and validation efforts.

What are the primary risks associated with this cost-plus-fixed-fee contract structure for the government?

The primary risk for the government with a Cost-Plus-Fixed-Fee (CPFF) contract structure is the potential for the contractor to incur costs exceeding initial estimates, although the fixed fee provides a ceiling on the profit. While the CPFF structure incentivizes the contractor to complete the work, it offers less incentive for cost efficiency compared to fixed-price contracts. If the contractor's cost accounting is not rigorous or if unforeseen technical challenges arise, the total cost to the government could escalate. Effective oversight, detailed cost tracking, and robust auditing by the contracting agency are essential to mitigate these risks and ensure that the government pays only for allowable, reasonable, and allocable costs, plus the agreed-upon fixed fee.

What does the duration of the contract (1144 days) imply about the complexity and scope of the mobile hotspots program?

A contract duration of 1144 days, approximately 3.1 years, for Phases 2 and 3 of the mobile hotspots program suggests a significant level of complexity and a phased approach to development and testing. This timeframe indicates that the program involves more than just basic system assembly; it likely encompasses intricate design iterations, integration of multiple subsystems (air, ground, compact ground), extensive documentation, and comprehensive field and flight testing. Such durations are typical for R&D projects where technological challenges, iterative design processes, and rigorous validation are necessary to ensure the final system meets demanding performance requirements. It implies a substantial commitment of resources and a methodical progression through development stages.

Given the 'full and open competition' award, what does the number of proposals (27) suggest about the market for this type of technology?

The submission of 27 proposals for this mobile hotspots program under full and open competition strongly suggests a robust and competitive market for advanced mobile communication and hotspot technologies within the defense sector. A high number of bidders indicates that multiple companies possess the requisite technical capabilities, resources, and interest to pursue such contracts. This level of competition is generally beneficial for the government, as it increases the likelihood of receiving innovative solutions and competitive pricing. It also suggests that the barriers to entry for qualified contractors are not excessively high, fostering a dynamic environment where companies are motivated to invest in developing relevant technologies to secure government contracts.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 27

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116

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

Financial Breakdown

Contract Ceiling: $20,466,371

Exercised Options: $20,466,371

Current Obligation: $20,466,371

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $4,645,273

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline