DoD's $12.9M contract for AN/ALQ-214 field support awarded to L3Harris without competition

Contract Overview

Contract Amount: $12,901,427 ($12.9M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-03-16

End Date: 2026-08-31

Contract Duration: 1,264 days

Daily Burn Rate: $10.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DOMESTIC AND FMS FIELD SUPPORT AND REPAIRS OF THE AN/ALQ-214 PRODUCT LINE

Place of Performance

Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $12.9 million to L3HARRIS TECHNOLOGIES, INC. for work described as: DOMESTIC AND FMS FIELD SUPPORT AND REPAIRS OF THE AN/ALQ-214 PRODUCT LINE Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential cost efficiencies. 2. The contract covers field support and repairs, critical for maintaining the operational readiness of the AN/ALQ-214 system. 3. Performance period extends over three years, indicating a need for sustained support. 4. The specific product line suggests a specialized niche within defense electronics. 5. Lack of competition may limit opportunities for innovation and cost reduction through market forces.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without competitive bids. The pricing structure, Cost Plus Fixed Fee (CPFF), can lead to cost overruns if not closely managed. While the total value is $12.9 million, the absence of comparison data makes it difficult to assess if this represents a fair market price for the services rendered. The government will need robust oversight to ensure costs remain reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3Harris Technologies, Inc. was the only bidder. This approach is typically used when a unique capability is required or when only one source can provide the necessary goods or services. The lack of competition means the government did not benefit from a bidding process that could drive down prices or spur innovation from multiple vendors.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without alternative quotes, it's harder to ensure the most cost-effective solution was secured.

Public Impact

The primary beneficiaries are the Department of the Navy, ensuring the operational readiness of its aircraft equipped with the AN/ALQ-214 system. Services delivered include field support and repairs, crucial for maintaining the functionality of electronic warfare systems. The geographic impact is likely concentrated where Navy aviation units are stationed, both domestically and potentially overseas. Workforce implications include the need for specialized technical personnel to perform the support and repair functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
CPFF contract type requires diligent oversight to control costs and prevent overruns.
Dependence on a single contractor for critical system support poses a long-term risk.

Positive Signals

Contract ensures continued support for a critical defense electronic warfare system.
L3Harris likely possesses specialized knowledge and experience with the AN/ALQ-214 product line.
Defined performance period provides a clear scope for support activities.

Sector Analysis

The defense electronics sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for specialized systems like the AN/ALQ-214 are often awarded to incumbent manufacturers due to proprietary knowledge and existing infrastructure. The market for electronic warfare systems is substantial, driven by ongoing military modernization and evolving threat landscapes. This contract represents a small but vital component of the broader defense electronics spending.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the specialized nature of the AN/ALQ-214 system and the sole-source award, it is unlikely that subcontracting opportunities for small businesses will be significant unless L3Harris proactively seeks them. The focus is on a prime contractor with specific expertise.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will be critical. The Department of the Navy will need to implement stringent cost tracking and auditing procedures to ensure that expenditures are reasonable and allocable to the contract. Transparency will depend on the reporting requirements stipulated in the contract and the government's diligence in monitoring contractor performance and costs. Inspector General involvement would be triggered by any indications of fraud, waste, or abuse.

Related Government Programs

AN/ALQ-214 Electronic Warfare System
Defense Electronic Support Systems
Naval Aviation Maintenance and Repair
Aerospace and Defense Component Manufacturing

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.9 million to L3HARRIS TECHNOLOGIES, INC.. DOMESTIC AND FMS FIELD SUPPORT AND REPAIRS OF THE AN/ALQ-214 PRODUCT LINE

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 $12.9 million.

What is the period of performance?

Start: 2023-03-16. End: 2026-08-31.

What is the historical spending on the AN/ALQ-214 product line by the Department of Defense?

Historical spending data for the AN/ALQ-214 product line specifically is not readily available in the provided data. However, the current contract valued at $12.9 million over approximately three years suggests a sustained need for support. To understand broader historical spending, one would need to access historical contract databases and analyze all awards related to this specific system or its predecessors. This would involve searching for contracts awarded to L3Harris Technologies and potentially previous manufacturers or support providers. Analyzing trends in contract values, durations, and types (e.g., sole-source vs. competitive) over time would provide a comprehensive view of the DoD's investment in this capability.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar defense support services?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense contracting, particularly for services where the scope of work might be less defined or subject to change, such as field support and repairs. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if the scope evolves, but it carries higher cost risk as the government bears the brunt of cost overruns. Other types like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives that can align contractor and government interests more closely. For highly specialized or R&D-intensive work, CPFF can be appropriate, but it necessitates rigorous government oversight to manage costs effectively.

What are the potential risks associated with a sole-source award for critical defense system support?

Sole-source awards for critical defense system support present several risks. Primarily, the absence of competition can lead to higher prices than might be achieved through a competitive bidding process, as the contractor faces no direct market pressure to reduce costs. This can result in less value for taxpayer money. Secondly, it can foster complacency in the contractor, potentially leading to reduced innovation or a decline in service quality over time, as there is no immediate threat of losing the contract to a competitor. Thirdly, it creates a dependency on a single supplier, which can be problematic if the contractor experiences financial difficulties, undergoes mergers, or faces production issues. This dependency can also hinder the adoption of newer, potentially more effective technologies if the sole provider does not offer them.

What is L3Harris Technologies' track record in providing field support for complex defense electronic systems?

L3Harris Technologies, Inc. has a significant track record in providing a wide range of products and services to the defense sector, including complex electronic systems. The company is a result of the merger between L3 Technologies and Harris Corporation, both established defense contractors with extensive experience. Their portfolio includes electronic warfare systems, communication systems, and avionics. While specific details on their performance for the AN/ALQ-214 product line require deeper contract-level analysis, L3Harris's overall presence and capabilities suggest they are well-positioned to offer such specialized support. Government contract databases and performance reports (like Contractor Performance Assessment Reporting System - CPARS) would offer more granular insights into their past performance on similar contracts.

How does the geographic location of the contractor (New Jersey) impact the delivery of field support services?

The contractor's location in New Jersey (ST='NJ') is relevant for the logistical aspects of providing field support. While the AN/ALQ-214 system might be deployed globally with Navy assets, having a domestic base of operations in New Jersey could streamline certain support functions, such as depot-level repairs, parts warehousing, and administrative oversight. However, 'field support' implies that personnel and resources will be deployed to various locations where the aircraft are stationed, which could be domestic bases or overseas deployments. The effectiveness of support delivery will depend more on the contractor's established network of field service representatives and their ability to mobilize personnel and equipment rapidly, regardless of their primary headquarters' location.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 1395 TROUTMAN BLVD 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: $12,901,427

Exercised Options: $12,901,427

Current Obligation: $12,901,427

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $540,799

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001922G0005

IDV Type: BOA

Timeline