DoD's $88.9M upgrade kit contract awarded to L3Harris Technologies, Inc. with no competition

Contract Overview

Contract Amount: $88,901,432 ($88.9M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-03-11

End Date: 2021-03-10

Contract Duration: 364 days

Daily Burn Rate: $244.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UPGRADE KIT FOR 150 WATT VEHICLE

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14610

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $88.9 million to L3HARRIS TECHNOLOGIES, INC. for work described as: UPGRADE KIT FOR 150 WATT VEHICLE Key points: 1. The contract value of $88.9 million for vehicle upgrade kits represents a significant investment in maintaining and enhancing military vehicle capabilities. 2. Awarded to a single, large defense contractor, this suggests a potential lack of broad market engagement or a highly specialized requirement. 3. The firm-fixed-price contract type aims to transfer risk to the contractor, but the absence of competition raises questions about optimal pricing. 4. The contract duration of 364 days indicates a focused, short-term effort for a specific upgrade, rather than a long-term sustainment program. 5. The North American Industry Classification System (NAICS) code 334220 points to the manufacturing of radio and television broadcasting and wireless communications equipment, suggesting the upgrade kits may involve advanced communication or electronic systems. 6. The contract was awarded as a delivery order, implying it is part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a pre-existing agreement.

Value Assessment

Rating: questionable

Benchmarking the value of this $88.9 million contract is challenging without knowing the specific technical requirements of the 'UPGRADE KIT FOR 150 WATT VEHICLE'. However, the lack of competition suggests that the Department of the Navy may not have achieved the best possible pricing. Without comparative bids, it's difficult to assess if the price paid is in line with market rates for similar specialized upgrade kits. The firm-fixed-price nature provides cost certainty but doesn't inherently guarantee value for money when competition is absent.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, L3Harris Technologies, Inc., was solicited and awarded the contract. This approach is typically used when only one source possesses the necessary capabilities, technology, or when urgency dictates a rapid award. The absence of a competitive bidding process means that the Navy did not benefit from the price discovery that typically occurs when multiple companies vie for a contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without multiple bids, there is a reduced likelihood of securing the lowest possible price for the required upgrade kits.

Public Impact

Military personnel operating 150-watt vehicles will benefit from enhanced capabilities provided by the upgrade kits. The services delivered involve the manufacturing and integration of specialized upgrade kits, likely enhancing communication or electronic systems within vehicles. The geographic impact is primarily within Department of the Navy operations, with potential deployment to various military bases or operational theaters. The contract supports jobs within L3Harris Technologies, Inc. and its supply chain, particularly in the wireless communications equipment manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source award raises concerns about whether alternative solutions or more cost-effective options were overlooked.
The specific nature of the 'upgrade kit' is not detailed, making it difficult to assess the necessity and scope of the expenditure.
Reliance on a single contractor for critical vehicle upgrades could pose supply chain risks if the contractor faces production issues.

Positive Signals

Award to a known defense contractor like L3Harris Technologies, Inc. suggests a potentially reliable source for specialized equipment.
Firm-fixed-price contract provides budget certainty for the Department of the Navy.
The upgrade kits are intended to enhance vehicle capabilities, which can improve operational effectiveness and safety for military personnel.

Sector Analysis

The contract falls within the broader defense electronics and manufacturing sector. The NAICS code 334220 specifically relates to radio and television broadcasting and wireless communications equipment manufacturing. This sector is characterized by high technological innovation, significant R&D investment, and often involves specialized components and systems. Spending in this area by the Department of Defense is crucial for maintaining a technological edge. Comparable spending benchmarks would involve other contracts for vehicle electronics, communication systems, or specialized military equipment upgrades, which are often substantial.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like L3Harris Technologies, Inc. suggests that the primary focus was on the prime contractor's capabilities. This may limit opportunities for small businesses to participate directly in this specific contract, although they might be involved further down the supply chain if L3Harris utilizes them for components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver the specified upgrade kits. Transparency is limited due to the sole-source nature and the lack of publicly available detailed specifications or performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Vehicle Modernization Programs
Military Communications Equipment Procurement
Naval Systems Upgrades
Defense Contractor Sustainment Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency on technical details

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $88.9 million to L3HARRIS TECHNOLOGIES, INC.. UPGRADE KIT FOR 150 WATT VEHICLE

Who is the contractor on this award?

The obligated recipient is L3HARRIS 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 $88.9 million.

What is the period of performance?

Start: 2020-03-11. End: 2021-03-10.

What specific technical capabilities or technologies does L3Harris Technologies, Inc. possess that made them the sole source for this upgrade kit?

Without detailed documentation, it's difficult to ascertain the exact proprietary technologies or unique capabilities that led to L3Harris Technologies, Inc. being the sole source. However, L3Harris is a well-established defense contractor with extensive experience in areas such as electronic warfare, communications systems, avionics, and information systems. For this specific contract, it's plausible that the 'UPGRADE KIT FOR 150 WATT VEHICLE' involved highly specialized communication modules, integrated electronic systems, or proprietary software that only L3Harris could provide or integrate seamlessly with existing platforms. The Department of the Navy would typically justify a sole-source award by demonstrating that only one responsible source is capable of meeting the government's requirements, often due to unique technical expertise, patented technology, or compatibility issues with existing systems.

How does the $88.9 million cost compare to similar vehicle upgrade kits or systems procured by the DoD?

Direct comparison of the $88.9 million cost for these 'UPGRADE KIT FOR 150 WATT VEHICLE' is challenging without specific details on the kit's components, functionality, and the number of units procured. However, considering the firm-fixed-price nature and the sole-source award, this figure represents a significant investment. Large-scale vehicle modernization or integration of advanced electronic/communication systems for military vehicles can easily run into tens or hundreds of millions of dollars, depending on the complexity and quantity. For context, other DoD contracts for advanced communication suites, electronic warfare upgrades, or integrated sensor packages for vehicles often fall within this range or higher. The absence of competition, however, prevents a definitive assessment of whether this price is optimal or represents good value for money compared to what could have been achieved through a competitive process.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a contract of this magnitude ($88.9 million) on a sole-source basis include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or offer cost efficiencies, and a missed opportunity to foster broader market engagement and potentially discover more capable or cost-effective solutions from other vendors. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier for critical components or upgrades, potentially leading to future supply chain vulnerabilities or higher costs in subsequent procurements. Furthermore, without competitive benchmarking, it's harder to objectively assess the contractor's performance and the true value delivered.

What is the historical spending pattern for similar vehicle upgrade kits by the Department of the Navy?

Historical spending patterns for similar vehicle upgrade kits by the Department of the Navy are not detailed in the provided data. However, the Department of Defense, including the Navy, consistently invests substantial amounts in maintaining and upgrading its vehicle fleets to ensure operational readiness and technological superiority. This includes upgrades to communication systems, armor, power plants, and electronic warfare capabilities. Spending can fluctuate based on strategic priorities, technological advancements, and the lifecycle of existing vehicle platforms. Contracts for such upgrades can range from smaller, targeted enhancements to multi-year, multi-million dollar programs involving hundreds or thousands of vehicles. The $88.9 million for this specific upgrade kit suggests a significant, albeit potentially singular, modernization effort.

What performance metrics or oversight mechanisms are typically in place for a contract like this?

For a firm-fixed-price contract like this, performance is typically measured against the defined scope of work, specifications, and delivery schedule outlined in the contract. Oversight mechanisms would include regular progress reviews, technical inspections of delivered kits, and acceptance testing by the Navy to ensure the upgrades meet all contractual requirements. The contracting officer and program managers are responsible for monitoring contractor performance, managing contract modifications, and ensuring compliance. While the firm-fixed-price structure places the cost risk on the contractor, the government still has a vested interest in ensuring the quality and timely delivery of the upgrade kits to maintain operational readiness. Reporting requirements might include status updates, production metrics, and quality control data.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785419R2001

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 1680 UNIVERSITY AVE, ROCHESTER, NY, 14610

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

Financial Breakdown

Contract Ceiling: $88,901,432

Exercised Options: $88,901,432

Current Obligation: $88,901,432

Actual Outlays: $65,711,552

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6785420D2029

IDV Type: IDC

Timeline