Naval Air Systems Command awarded $35M contract for communication equipment, with L3Harris Technologies as the sole provider

Contract Overview

Contract Amount: $34,974,607 ($35.0M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-05-15

End Date: 2012-06-26

Contract Duration: 2,234 days

Daily Burn Rate: $15.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200608!408415!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0087 !A!N! !N! ! !20060515!20080228!021715206!021715206!004203337!N!HARRIS CORPORATION !2400 PALM BAY RD NE !PALM BAY !FL!32905!43975!009!12!MELBOURNE !BREVARD !FLORIDA !+000004097000!N!N!000013136600!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !549 !F/A-18 E/F !336413!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y!1719!N00019!0001! !

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32902

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $35.0 million to L3HARRIS TECHNOLOGIES, INC. for work described as: 200608!408415!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0087 !A!N! !N! ! !20060515!20080228!021715206!021715206!004203337!N!HARRIS CORPORATION !2400 PALM BAY RD NE !PALM BAY !FL!32905!43975!009!12!MELBOURNE !BREV… Key points: 1. Contract awarded to a single, established supplier suggests potential for higher pricing due to lack of competition. 2. The contract's duration of over 6 years indicates a long-term need for these communication systems. 3. Awarded under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category, highlighting its specific defense application. 4. The firm fixed-price structure aims to control costs, but the sole-source nature may limit savings. 5. Performance context is limited without details on specific deliverables or success metrics. 6. Sector positioning within defense electronics and communication equipment is clear, supporting naval aviation needs.

Value Assessment

Rating: fair

The contract value of approximately $35 million over its life is substantial for specialized communication equipment. Without comparable sole-source awards or detailed cost breakdowns, it's difficult to definitively benchmark the value for money. The firm fixed-price (FFP) contract type is generally favorable for cost control, but the lack of competition raises concerns about whether the government secured the best possible price. Further analysis would require understanding the unique nature of the communication equipment and the market for such specialized items.

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, was solicited. This approach is typically used when a unique product or service is required, or when only one vendor possesses the necessary capabilities. The absence of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium for goods and services, as there is no competitive pressure to drive down prices. This necessitates strong justification for the sole-source determination to ensure fiscal responsibility.

Public Impact

The primary beneficiaries are the U.S. Navy's aviation programs, specifically the F/A-18 E/F Super Hornet, which will receive critical communication equipment. The services delivered involve the provision of miscellaneous communication equipment, essential for maintaining operational readiness and command and control. The geographic impact is primarily within the defense sector, supporting naval operations globally. Workforce implications are likely concentrated within L3Harris Technologies, supporting specialized manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification process can obscure potential inefficiencies.
Long contract duration without clear performance metrics raises questions about ongoing value.
Reliance on a single supplier could create future dependency and limit technological advancement options.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Award to an established contractor like L3Harris suggests a known entity with relevant expertise.
The specific nature of the communication equipment may necessitate a specialized supplier.

Sector Analysis

This contract falls within the defense electronics and communication equipment sector, a critical component of military readiness. The market for specialized military communication systems is often characterized by high barriers to entry due to technological complexity, stringent security requirements, and long development cycles. Spending in this area is driven by the need for advanced, reliable, and secure communication capabilities for various platforms, including naval aircraft. Benchmarking requires comparison with similar sole-source or limited-competition awards for specialized defense communication hardware.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to L3Harris Technologies, a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this award. The absence of a set-aside suggests that opportunities for small businesses to participate directly in this specific contract may be limited, though they could potentially be involved as suppliers to the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy and the Naval Air Systems Command. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver specified equipment within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, with justifications for this approach being key to assessing public accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Aviation Communication Systems
Defense Electronics Procurement
F/A-18 Super Hornet Support Contracts
Sole-Source Defense Contracts
Communication Equipment Manufacturing

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency in award justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.0 million to L3HARRIS TECHNOLOGIES, INC.. 200608!408415!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0087 !A!N! !N! ! !20060515!20080228!021715206!021715206!004203337!N!HARRIS CORPORATION !2400 PALM BAY RD NE !PALM BAY !FL!32905!43975!009!12!MELBOURNE !BREVARD !FLORIDA !+000004097000!N!N!000013136600!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !549 !F/A-18 E/F !336413!E! !3! ! ! ! ! !999

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 $35.0 million.

What is the period of performance?

Start: 2006-05-15. End: 2012-06-26.

What is the specific type of 'Miscellaneous Communication Equipment' being procured, and why is it considered unique enough for a sole-source award?

The data indicates the Product Service Code (PSC) is 5895, which covers 'Miscellaneous Communication Equipment'. While the exact specifications are not detailed, such equipment often includes highly specialized radios, encryption devices, data links, or integrated communication suites tailored for specific military platforms like the F/A-18 E/F. Sole-source awards for such items are typically justified by unique technical requirements, proprietary technology, existing system integration, or a lack of alternative qualified sources capable of meeting stringent performance and security standards within the required timeframe. Without access to the sole-source justification documentation, the precise reasons remain speculative but likely relate to the critical and specialized nature of the communication needs for advanced naval aircraft.

How does the awarded price of approximately $35 million compare to similar communication equipment contracts, especially those awarded competitively?

Directly comparing this $35 million sole-source award to competitive contracts is challenging without detailed specifications of the equipment and market analysis. However, sole-source awards generally tend to be higher than competitively procured ones due to the absence of price pressure. To assess value, one would need to identify comparable contracts for similar quantities and technical capabilities of communication systems, ideally those awarded through full and open competition. If competitive contracts for similar items are significantly lower, it would indicate that this sole-source award may not represent optimal value for the taxpayer. The duration of the contract (over 6 years) also needs to be factored into any per-year cost comparison.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis to L3Harris Technologies?

The primary risk is financial: the government may have paid a higher price than necessary due to the lack of competition. There's also a risk of vendor lock-in, where the Navy becomes dependent on L3Harris for this specific equipment, potentially limiting future options for upgrades or replacements. Operational risk could arise if L3Harris faces production issues or financial instability, impacting the supply chain for critical naval assets. Furthermore, sole-source awards can sometimes face public scrutiny regarding fairness and the justification process, potentially leading to reputational risk if not managed transparently.

What is L3Harris Technologies' track record with the Department of Defense, particularly in providing communication equipment?

L3Harris Technologies (and its predecessor companies) has a long and established history of providing advanced communication systems, electronics, and integrated solutions to the Department of Defense. They are a significant defense contractor known for their expertise in areas such as airborne and ground-based communication, electronic warfare, and intelligence, surveillance, and reconnaissance (ISR) systems. Their involvement with programs like the F/A-18 suggests a proven capability to meet the demanding requirements of naval aviation. A review of their contract history would likely show numerous awards across various defense agencies for similar types of complex electronic and communication equipment.

How has historical spending on 'Miscellaneous Communication Equipment' (PSC 5895) by the Department of the Navy trended over the past decade?

Historical spending data for PSC 5895 by the Department of the Navy would reveal trends in the procurement of miscellaneous communication equipment. Analyzing this data could show whether spending has increased, decreased, or remained stable, potentially indicating shifts in technological needs, platform upgrades, or budget priorities. It could also highlight the prevalence of sole-source versus competitive awards within this category, offering context for the current contract's award strategy. Understanding these historical patterns is crucial for assessing the significance of the $35 million award in the broader context of Navy communication system investments.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 2400 PALM BAY RD NE, PALM BAY, FL, 08

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline