L3Harris Technologies awarded $56.2M for Distributed Targeting Processors, a sole-source contract

Contract Overview

Contract Amount: $56,190,082 ($56.2M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2015-07-01

End Date: 2020-05-29

Contract Duration: 1,794 days

Daily Burn Rate: $31.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DISTRIBUTED TARGETING PROCESSOR (RAAF)

Place of Performance

Location: PALM BAY, BREVARD County, FLORIDA, 32905

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $56.2 million to L3HARRIS TECHNOLOGIES, INC. for work described as: DISTRIBUTED TARGETING PROCESSOR (RAAF) Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of nearly five years suggests a long-term need for the specified equipment. 3. The firm-fixed-price structure shifts cost risk to the contractor. 4. The aircraft manufacturing sector is characterized by high barriers to entry and specialized production. 5. The absence of small business set-asides indicates a focus on large prime contractors. 6. The contract's value is substantial within its specific niche of aircraft components.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The total award of $56.2 million over approximately five years averages to about $11.2 million annually. Without comparable contracts or market data for similar distributed targeting processors, it's difficult to definitively assess if the pricing represents excellent value. However, the firm-fixed-price nature of the contract implies that L3Harris Technologies assumed the cost risks, which can sometimes lead to higher initial prices but provides budget certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one bidder, L3Harris Technologies, Inc., was considered. This approach is typically used when there is a unique capability or proprietary technology involved, or in cases of urgent need where competition is not feasible. The lack of competition means that taxpayers did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than might have been achieved in an open market.

Taxpayer Impact: Sole-source awards limit the government's ability to negotiate the best possible price, as there is no direct comparison with other potential suppliers. This can result in taxpayers paying a premium for the goods or services.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other Department of Defense branches requiring advanced targeting systems for aircraft. The contract delivers critical components for aircraft targeting systems, enhancing operational capabilities. The geographic impact is primarily within Florida, where L3Harris Technologies is located, suggesting potential local economic benefits. The contract supports specialized roles within the aerospace and defense manufacturing workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential cost savings.
Lack of competition may lead to higher per-unit costs.
Long contract duration could mask inefficiencies if not closely monitored.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Contract supports critical defense capabilities.
Awardee is an established defense contractor with relevant expertise.

Sector Analysis

The contract falls within the Aircraft Manufacturing (NAICS 336411) sector, a highly specialized industry dominated by a few large, established players due to significant R&D, capital investment, and regulatory hurdles. Spending in this sector is often driven by defense procurement needs. Comparable spending benchmarks are difficult to establish without specific details on the processor's capabilities, but large defense contracts for avionics and targeting systems can range from tens to hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have included small business set-asides, as indicated by the 'sb' field being false. The prime contractor, L3Harris Technologies, is a large corporation. While there might be subcontracting opportunities for small businesses within the supply chain, the primary award does not directly benefit small businesses through a set-aside mechanism. This is common for highly specialized defense components where only a few large firms possess the necessary technology and manufacturing capacity.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified goods within the agreed price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Avionics Systems
Defense Targeting Systems
Aerospace Manufacturing Contracts
Department of the Navy Procurement

Risk Flags

Sole-source award limits competitive pricing.
Lack of transparency in procurement process.
Potential for higher costs due to absence of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.2 million to L3HARRIS TECHNOLOGIES, INC.. DISTRIBUTED TARGETING PROCESSOR (RAAF)

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 $56.2 million.

What is the period of performance?

Start: 2015-07-01. End: 2020-05-29.

What is the specific function and technological significance of the 'Distributed Targeting Processor (RAAF)'?

The 'Distributed Targeting Processor (RAAF)' likely refers to a component within an aircraft's mission system responsible for processing sensor data and enabling the targeting of specific objectives. The 'RAAF' designation might indicate a specific program or variant. In modern military aircraft, such processors are crucial for integrating data from various sensors (radar, infrared, electro-optical) to provide pilots or automated systems with accurate targeting solutions. Their technological significance lies in their ability to perform complex calculations in real-time, often under demanding environmental conditions, and to interface with other critical aircraft systems. The 'distributed' aspect suggests that processing capabilities might be spread across multiple units or nodes for redundancy, performance, or modularity. The exact specifications and capabilities are typically classified due to their military application.

How does the firm-fixed-price contract type impact the government's financial risk compared to other contract types?

A firm-fixed-price (FFP) contract shifts the majority of the financial risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to complete the work and deliver the goods or services for a predetermined, fixed price, regardless of the actual costs incurred. This provides the government with cost certainty and predictability, making budgeting easier. If the contractor's costs exceed the fixed price, they absorb the loss. Conversely, if the contractor's costs are lower than anticipated, they realize a higher profit margin. This contrasts with cost-plus contracts, where the government reimburses the contractor's allowable costs plus a fee, placing more cost risk on the government but potentially encouraging innovation or work on projects with uncertain outcomes.

What are the typical justifications for awarding a sole-source contract in the defense sector?

Sole-source contracts in the defense sector are typically justified under specific circumstances outlined in federal acquisition regulations. Common reasons include: 1) Unique Capability: The item or service is available only from a single source due to proprietary technology, specialized manufacturing processes, or unique expertise. 2) Urgent and Compelling Need: An emergency situation exists where delays associated with competitive bidding would be detrimental to national security. 3) Industrial Mobilization: To maintain essential industrial capabilities or facilities. 4) Follow-on Contracts: When a follow-on contract is necessary for standardization or interoperability with previously acquired items, and only the original contractor can meet the requirements. 5) Small Business Sole Source: For small businesses under specific socioeconomic programs. In this case, the 'NOT COMPETED' status suggests one of these justifications, likely related to unique capabilities or proprietary technology, was invoked.

What is the historical spending trend for Distributed Targeting Processors or similar aircraft components by the Department of the Navy?

Analyzing historical spending trends for highly specific components like 'Distributed Targeting Processors' is challenging without access to detailed procurement databases that track sub-component spending over time. However, the Department of the Navy consistently invests significant funds in advanced avionics, targeting systems, and aircraft modernization programs. Spending in these areas is driven by the need to maintain technological superiority and operational effectiveness of its air fleet. Contracts for such systems often span multiple years and can be substantial, reflecting the complexity and critical nature of the technology. Given the $56.2 million award over nearly five years, this suggests a consistent, albeit niche, level of investment in this particular capability. Broader trends show increasing investment in networked warfare capabilities and advanced sensor processing across the DoD.

What are the potential risks associated with a sole-source contract for advanced defense technology?

Sole-source contracts for advanced defense technology carry several potential risks. Primarily, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, as the government does not benefit from market forces driving down costs. This can result in less value for taxpayer money. Secondly, there's a risk of contractor complacency; without the pressure of competition, the sole-source provider may have less incentive to innovate, improve efficiency, or maintain the highest quality standards over the long term. Thirdly, dependence on a single supplier can create supply chain vulnerabilities. If the sole-source contractor experiences production issues, financial difficulties, or goes out of business, the government may face significant disruptions in acquiring critical technology. Finally, sole-source awards can sometimes be perceived as lacking transparency, potentially leading to public or congressional scrutiny.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001913R0077

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: $56,190,082

Exercised Options: $56,190,082

Current Obligation: $56,190,082

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $8,563,370

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline