DoD's $21.9M contract for optical instruments awarded to L3 Technologies, Inc. shows fair value

Contract Overview

Contract Amount: $21,948,131 ($21.9M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-11-21

End Date: 2010-11-25

Contract Duration: 1,100 days

Daily Burn Rate: $20.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IWNS-T

Place of Performance

Location: LONDONDERRY, ROCKINGHAM County, NEW HAMPSHIRE, 03053

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $21.9 million to L3 TECHNOLOGIES, INC. for work described as: IWNS-T Key points: 1. Contract value of $21.9M over three years suggests a moderate annual spend. 2. Awarded under full and open competition, indicating a competitive bidding process. 3. Fixed-price contract type helps mitigate cost overrun risks for the government. 4. The contractor, L3 Technologies, Inc., is a significant player in the defense sector. 5. Performance period of approximately three years allows for sustained delivery. 6. The contract falls within the optical instrument and lens manufacturing sector.

Value Assessment

Rating: good

The contract value of $21.9 million over three years averages to approximately $7.3 million annually. Benchmarking against similar contracts for optical instruments is challenging without more specific details on the exact nature of the instruments. However, the fixed-price nature of the award suggests that the government secured a defined cost for the deliverables, which is generally favorable. The absence of significant cost growth indicators in the provided data points towards a reasonable initial pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 3 bids indicates a degree of competition, though the exact number of bidders can vary widely depending on the complexity and market size for specialized optical instruments. A moderate number of bidders generally allows for price discovery and encourages competitive pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of potential solutions, maximizing the value for government spending.

Public Impact

The Department of the Navy benefits from the acquisition of specialized optical instruments, likely for defense or surveillance purposes. This contract supports the delivery of advanced optical technologies crucial for national security operations. The geographic impact is primarily within New Hampshire, where the contractor is located, potentially supporting local jobs and the regional economy. The contract likely involves a skilled workforce in manufacturing, engineering, and quality assurance within the optical industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the specific optical instruments are highly proprietary.
Reliance on a single contractor for critical optical components could pose supply chain risks.
Ensuring ongoing technological relevance and upgrade paths for the optical instruments.

Positive Signals

Awarded through full and open competition, suggesting a competitive market for these instruments.
Fixed-price contract type provides cost certainty for the government.
Contractor L3 Technologies, Inc. has a significant presence in the defense industry, implying experience and capability.
The contract duration allows for sustained delivery and potential for relationship building.

Sector Analysis

The optical instrument and lens manufacturing sector is a specialized niche within the broader manufacturing industry, often serving defense, scientific, and medical applications. This contract, valued at $21.9 million, represents a moderate investment within this sector. Companies like L3 Technologies, Inc. are key players, often involved in high-technology components. Comparable spending benchmarks would depend heavily on the specific type and quantity of optical instruments procured, but this award appears to be within a typical range for specialized defense procurements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside. The primary focus would be on the prime contractor's own capabilities and potential use of large or specialized subcontractors, rather than a mandated small business participation goal.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are inherent in the fixed-price contract type, requiring the contractor to deliver specified goods within the agreed-upon cost. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Procurement
Optical Manufacturing
Naval Systems
Advanced Technology Acquisition

Risk Flags

Contract awarded to a single entity.
Potential for specialized technology requiring ongoing support.
Limited number of bidders may warrant further review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.9 million to L3 TECHNOLOGIES, INC.. IWNS-T

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $21.9 million.

What is the period of performance?

Start: 2007-11-21. End: 2010-11-25.

What specific types of optical instruments were procured under this contract?

The provided data indicates the contract falls under the NAICS code 333314 for Optical Instrument and Lens Manufacturing. However, it does not specify the exact types of optical instruments. These could range from sophisticated targeting systems, surveillance optics, scientific measurement devices, or components for larger defense platforms. Further investigation into the contract details or associated documentation would be required to identify the precise nature of the optical instruments and their intended use within the Department of Defense.

How does the $21.9 million contract value compare to typical spending for similar optical instrument procurements by the DoD?

The $21.9 million contract value, awarded over approximately three years, represents an average annual spend of about $7.3 million. This is a moderate-sized contract within the defense sector. The DoD procures a wide array of optical systems, from relatively low-cost components to highly complex, multi-million dollar integrated systems. Without knowing the specific technical requirements, quantity, and complexity of the optical instruments in this contract, a direct comparison is difficult. However, for specialized, high-technology optical systems, this value appears reasonable, especially considering it was awarded under full and open competition.

What is the track record of L3 Technologies, Inc. in fulfilling similar defense contracts?

L3 Technologies, Inc. (now part of L3Harris Technologies) is a well-established defense contractor with a substantial history of delivering complex systems, including those involving optics and electro-optical technologies. They have a broad portfolio of contracts across various branches of the U.S. military. While specific performance details for this particular $21.9 million contract are not detailed here, the company's general track record suggests a high level of technical capability and experience in meeting demanding defense requirements. Reviewing past performance evaluations and contract histories for L3 Technologies would provide a more granular understanding of their reliability.

What are the potential risks associated with this contract, and how were they mitigated?

Potential risks for this contract could include technological obsolescence, supply chain disruptions for specialized components, or performance issues with the optical instruments. The mitigation strategies employed are primarily embedded in the contract structure and the competitive process. The fixed-price nature of the award helps mitigate cost overrun risks for the government. Awarding under full and open competition suggests that multiple capable vendors were evaluated, reducing the risk of selecting a contractor unable to meet requirements. The three-year duration allows for sustained delivery but also necessitates planning for future needs and potential upgrades.

How does the competition level (3 bidders) impact the value for taxpayers?

Having three bidders for this $21.9 million contract indicates a moderate level of competition. While more bidders could potentially drive prices lower, three offers generally provide sufficient market intelligence for the government to assess pricing and select a technically acceptable and reasonably priced solution. This level of competition suggests that the government likely received competitive proposals, leading to a fair market price for the optical instruments. It avoids the higher risks associated with sole-source or very limited competition, where price discovery is significantly hampered, potentially leading to higher costs for taxpayers.

What is the historical spending trend for optical instrument and lens manufacturing by the Department of the Navy?

Historical spending data for the Department of the Navy (DoN) in the optical instrument and lens manufacturing sector (NAICS 333314) would reveal trends in investment in this area. This specific $21.9 million contract contributes to that overall spending. Analyzing past years' spending would show whether the DoN's investment in optical technologies is increasing, decreasing, or remaining stable. It would also highlight major contractors and the types of optical systems most frequently procured, providing context for the significance and typical scale of such contracts within the DoN's budget.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6785407R1083

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 9 AKIRA WAY, LONDONDERRY, NH, 01

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

Financial Breakdown

Contract Ceiling: $21,948,131

Exercised Options: $21,948,131

Current Obligation: $21,948,131

Contract Characteristics

Cost or Pricing Data: NO

Timeline