DoD awards $25.7M for aircraft parts, but competition was limited, raising value concerns

Contract Overview

Contract Amount: $25,667,994 ($25.7M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-04-26

End Date: 2015-05-15

Contract Duration: 1,845 days

Daily Burn Rate: $13.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TAMMAC - LOT 10 DMC/DVMC PRODUCTION AWARD FOR AV-8B, UH-1Y/AH-1Z AND NAVICP

Place of Performance

Location: PALM BAY, BREVARD County, FLORIDA, 32905

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $25.7 million to L3HARRIS TECHNOLOGIES, INC. for work described as: TAMMAC - LOT 10 DMC/DVMC PRODUCTION AWARD FOR AV-8B, UH-1Y/AH-1Z AND NAVICP Key points: 1. Contract awarded without competition, potentially limiting price discovery and value for money. 2. The firm-fixed-price contract type offers some cost certainty but doesn't mitigate the lack of competition. 3. The contract duration of 1845 days (over 5 years) suggests a long-term need for these specialized parts. 4. The awardee, L3Harris Technologies, Inc., is a significant defense contractor, indicating established industry presence. 5. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector. 6. The contract was awarded to a single bidder, highlighting a potential lack of market alternatives or a strategic sourcing decision.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids. Without comparison to other offers, it's difficult to ascertain if the $25.7 million price reflects optimal market value. The firm-fixed-price structure provides cost predictability, but the absence of competition means taxpayers may not have benefited from the most cost-effective pricing achievable through a robust bidding process. Further analysis would require understanding the specific components and market rates for these specialized aircraft parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach is typically used when only one responsible source is available or when a compelling justification exists for excluding competition. The lack of multiple bidders means there was no opportunity for price negotiation or comparison among different suppliers, which can lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as the government did not benefit from competitive pressures that typically drive down costs.

Public Impact

The primary beneficiaries are the U.S. military branches operating AV-8B, UH-1Y/AH-1Z aircraft, ensuring continued operational readiness. The contract delivers essential production parts for critical military aircraft, supporting national defense capabilities. The geographic impact is primarily within Florida, where the contractor is located, potentially supporting local jobs and the regional economy. The contract supports the specialized manufacturing workforce within L3Harris Technologies, Inc., maintaining expertise in aerospace components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can reduce market responsiveness and innovation.
Dependence on a single supplier could create supply chain risks.
Limited transparency in pricing due to absence of bids.

Positive Signals

Ensures availability of critical parts for aging aircraft fleets.
Award to an established contractor suggests reliability and quality.
Firm-fixed-price contract provides budget certainty.

Sector Analysis

This contract falls within the aerospace manufacturing sector, specifically focusing on components for military aircraft. The market for such specialized parts is often characterized by high barriers to entry, stringent quality requirements, and a limited number of qualified suppliers. Spending in this area is driven by defense appropriations and the need to maintain readiness for existing aircraft fleets. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar aircraft components.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, there is no explicit mention of subcontracting plans for small businesses. This suggests that the primary awardee is expected to fulfill the contract requirements directly, potentially limiting opportunities for small businesses to participate in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm-fixed-price nature of the contract provides a degree of accountability regarding cost, but the lack of competition limits the government's leverage in price negotiations. Transparency is moderate, as contract awards are generally public, but the specifics of pricing and justification for sole-source awards may not always be fully disclosed.

Related Government Programs

AV-8B Harrier II Program
UH-1Y Venom Program
AH-1Z Viper Program
Naval Air Systems Command (NAVAIR) Procurement
Defense Logistics Agency (DLA) Aviation

Risk Flags

Sole-source award
Potential for overpricing
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.7 million to L3HARRIS TECHNOLOGIES, INC.. TAMMAC - LOT 10 DMC/DVMC PRODUCTION AWARD FOR AV-8B, UH-1Y/AH-1Z AND NAVICP

Who is the contractor on this award?

The obligated recipient is L3HARRIS 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 $25.7 million.

What is the period of performance?

Start: 2010-04-26. End: 2015-05-15.

What is the historical spending pattern for this specific contract or similar parts with L3Harris Technologies, Inc.?

Detailed historical spending data for this specific contract award (TAMMAC - LOT 10 DMC/DVMC PRODUCTION AWARD FOR AV-8B, UH-1Y/AH-1Z AND NAVICP) is not directly available in the provided data snippet. However, the award date of 2010-04-26 and end date of 2015-05-15 indicate a five-year period of performance for this $25.7 million contract. To understand historical spending patterns, one would need to access contract databases like FPDS-NG or SAM.gov to search for previous awards to L3Harris Technologies, Inc. for similar aircraft parts (AV-8B, UH-1Y/AH-1Z) or for the same Product Service Code (PSC) and NAICS code (334511). Analyzing these past awards would reveal the frequency, value, and competitive nature of previous procurements, helping to establish a baseline for current spending and identify any significant deviations or trends.

How does the $25.7 million award compare to other contracts for similar aircraft parts?

Direct comparison of the $25.7 million award for AV-8B, UH-1Y/AH-1Z and NAVICP parts is difficult without specific details on the exact components procured and their market value. However, given the sole-source nature of this award, it is plausible that the price may be higher than if it had been competitively bid. To benchmark effectively, one would need to identify comparable contracts for similar parts awarded through full and open competition. Researching contracts with the same NAICS code (334511) and PSC, or those for parts of similar complexity and criticality for other military aircraft, would provide a more accurate assessment. The duration of the contract (1845 days) also suggests a substantial quantity or scope, making a direct per-unit cost comparison crucial if available.

What are the key risks associated with a sole-source award for critical aircraft components?

The primary risk associated with a sole-source award for critical aircraft components is the potential for inflated pricing due to the absence of competitive pressure. Without competing bids, the government may pay more than necessary for the parts. Another significant risk is reduced supplier innovation and responsiveness, as the sole provider may have less incentive to improve products or services. Furthermore, sole-source awards can create a dependency on a single supplier, increasing vulnerability to supply chain disruptions, quality issues, or the contractor's business viability. This lack of alternative sources also limits the government's leverage in contract negotiations and performance management.

What is the track record of L3Harris Technologies, Inc. in delivering defense contracts?

L3Harris Technologies, Inc. is a major defense contractor with a substantial track record in delivering a wide range of aerospace and defense products and services. The company has a history of fulfilling complex government contracts, including those for aircraft components, avionics, and communication systems. While specific performance metrics for this particular $25.7 million contract are not detailed here, L3Harris generally operates within a highly regulated environment with significant oversight. Their extensive experience suggests a capacity to meet technical specifications and delivery schedules. However, as with any large contractor, past performance reviews and contract-specific data would be necessary for a comprehensive assessment of their reliability on this specific award.

What is the significance of the NAICS code 334511 for this contract?

The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' is highly significant for this contract. It precisely categorizes the industry segment involved: the manufacturing of sophisticated systems and instruments used for navigation, guidance, and detection, particularly within the aerospace and maritime domains. This classification indicates that the contract is for highly specialized and technologically advanced components, likely requiring significant engineering expertise, precision manufacturing, and adherence to stringent quality and safety standards. Companies operating under this NAICS code are typically involved in high-value, complex production for defense and aerospace applications.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: HARDWARE AND ABRASIVES

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, 32905

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: $25,667,996

Exercised Options: $25,667,994

Current Obligation: $25,667,994

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline