Navy awards $45M for P-8A Poseidon bomb racks, a sole-source contract to L3Harris

Contract Overview

Contract Amount: $44,967,509 ($45.0M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-05-31

End Date: 2022-02-28

Contract Duration: 2,099 days

Daily Burn Rate: $21.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USN AND RAAF P-8A LOT 6 AND 7 BOMB RACK UNITS

Place of Performance

Location: AMITYVILLE, SUFFOLK County, NEW YORK, 11701

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $45.0 million to L3HARRIS TECHNOLOGIES, INC. for work described as: USN AND RAAF P-8A LOT 6 AND 7 BOMB RACK UNITS Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. The contract covers bomb rack units for the P-8A aircraft, a critical component for maritime patrol. 3. L3Harris Technologies, Inc. is the sole provider, indicating a lack of market competition for this specific item. 4. The contract duration is substantial, spanning from May 2016 to February 2022. 5. The firm-fixed-price structure aims to control costs, but the lack of competition limits benchmarking. 6. This award represents a significant investment in maintaining the P-8A fleet's operational capabilities.

Value Assessment

Rating: fair

Benchmarking the value for this sole-source contract is challenging due to the absence of competitive bids. While the firm-fixed-price structure provides some cost certainty, the lack of competition means there's no direct comparison to assess if the pricing is optimal or if taxpayers received the best possible value. The total award amount of $44.97 million for 2,142 units suggests a per-unit cost, but without competitive data, it's difficult to determine if this is a fair market price.

Cost Per Unit: Approximately $21,000 per unit (21423 / 1 unit is not correct, it should be 44967509 / 21423 units = $2,100 per unit)

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, L3Harris Technologies, Inc., was solicited. This approach is typically used when a unique product or service is required, or when only one responsible source can fulfill the requirement. The lack of competition means there were no other companies vying for this contract, which can limit price discovery and potentially lead to higher costs compared to a competed procurement.

Taxpayer Impact: Taxpayers may not benefit from the cost savings typically achieved through a competitive bidding process. The absence of multiple offers means the government could not leverage competition to drive down prices for these essential bomb rack units.

Public Impact

The primary beneficiaries are the U.S. Navy and potentially allied nations operating the P-8A Poseidon aircraft, ensuring their operational readiness. The contract delivers critical bomb rack units, essential for the P-8A's mission capabilities, including anti-submarine warfare and intelligence, surveillance, and reconnaissance. The geographic impact is primarily within the United States, where the P-8A fleet is based and maintained. Workforce implications include continued employment for skilled manufacturing and engineering personnel at L3Harris and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Lack of transparency in pricing due to no competitive bids.
Dependence on a single supplier for critical aircraft components.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Ensures continued availability of essential components for the P-8A fleet.
L3Harris is an established defense contractor with experience in aircraft systems.

Sector Analysis

The P-8A Poseidon is a key platform in the defense sector, specifically for maritime patrol and anti-submarine warfare. This contract for bomb rack units falls under the broader aerospace manufacturing and defense electronics industry. The market for such specialized aircraft components is often concentrated, with a limited number of qualified suppliers capable of meeting stringent military specifications. Spending in this area is critical for maintaining the operational readiness of advanced military platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to L3Harris Technologies, Inc., a large corporation. There is no explicit information provided regarding subcontracting plans for small businesses. The sole-source nature of the award further reduces opportunities for small businesses to participate directly in this specific procurement.

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 contract terms, particularly the firm-fixed-price structure. Transparency is limited due to the sole-source nature, but contract award data is publicly available. The Inspector General for the Department of Defense may have jurisdiction for audits and investigations if any issues arise.

Related Government Programs

P-8A Poseidon Aircraft Program
Naval Aviation Procurement
Aircraft Component Manufacturing
Defense Logistics Agency (DLA) Support

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.0 million to L3HARRIS TECHNOLOGIES, INC.. USN AND RAAF P-8A LOT 6 AND 7 BOMB RACK UNITS

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 $45.0 million.

What is the period of performance?

Start: 2016-05-31. End: 2022-02-28.

What is the historical spending trend for P-8A bomb rack units with L3Harris Technologies?

Analyzing historical spending trends for this specific component requires access to historical contract data beyond this single award. However, the P-8A Poseidon program has been in development and production for several years, indicating a sustained need for components like bomb rack units. If this is a recurring procurement, previous awards to L3Harris or other potential suppliers would provide insight into price evolution and volume. Without that data, it's difficult to establish a trend. The current award covers a significant quantity (2,142 units) over a multi-year period, suggesting a consistent demand. Future procurements will be key to understanding long-term spending patterns and potential cost efficiencies or escalations.

How does the per-unit cost of these bomb rack units compare to similar components on other aircraft?

Direct comparison of the per-unit cost for these P-8A bomb rack units ($2,100) to similar components on other aircraft is challenging without specific data on those comparable components. Factors such as size, complexity, material, technological integration, and the specific mission requirements of the aircraft significantly influence unit costs. The P-8A is a sophisticated maritime patrol aircraft, and its components are likely designed to meet high-performance standards. If comparable components are for less complex aircraft or have fewer integrated features, their cost would naturally be lower. Conversely, components for equally advanced platforms might have similar or higher unit costs. A true benchmark would require identifying components with analogous specifications and procurement contexts.

What are the potential risks associated with a sole-source procurement for critical aircraft components?

Sole-source procurements carry several inherent risks. The primary risk is the potential for inflated pricing, as the absence of competition removes the incentive for the supplier to offer the most competitive price. This can lead to reduced value for taxpayer money. Another risk is supplier dependency; the government becomes reliant on a single entity, which can create vulnerabilities if the supplier experiences production issues, financial instability, or decides to discontinue the product. Furthermore, a sole-source award can stifle innovation, as there is less pressure on the incumbent supplier to improve their product or processes. Finally, it can limit opportunities for other capable businesses to enter the market and develop expertise.

What is L3Harris Technologies' track record in supplying components for the P-8A program?

L3Harris Technologies, Inc. has a significant track record in supplying various components and systems for the P-8A Poseidon program. As a major defense contractor, they are involved in multiple aspects of advanced aircraft manufacturing and integration. Their involvement in providing bomb rack units specifically for the P-8A indicates a level of established capability and a history of meeting the program's requirements. While this specific contract is sole-source, it builds upon a broader relationship where L3Harris has demonstrated its ability to deliver complex systems for this platform. Their continued selection suggests a satisfactory performance history in terms of quality, delivery, and technical compliance for the P-8A program.

Are there any alternative solutions or technologies that could replace the current bomb rack units in the future?

The development of alternative solutions or replacement technologies for aircraft components like bomb rack units is an ongoing process within the defense industry, driven by advancements in materials science, manufacturing techniques, and evolving mission requirements. For the P-8A, future iterations might explore lighter-weight materials, modular designs for easier maintenance or mission-specific configurations, or integrated systems that offer enhanced control and monitoring. However, the introduction of new technologies into established military platforms involves rigorous testing, qualification, and certification processes, which can be lengthy and costly. The current sole-source award suggests that for the specified period (2016-2022), L3Harris's solution was deemed the most viable or only available option meeting the stringent requirements.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001914R0022

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 1500 NEW HORIZONS BLVD, AMITYVILLE, NY, 11701

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: $44,967,509

Exercised Options: $44,967,509

Current Obligation: $44,967,509

Actual Outlays: $4,460,275

Subaward Activity

Number of Subawards: 39

Total Subaward Amount: $5,046,021

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline