DoD's $28.9M contract for LCAC modernization awarded to L3Harris Unmanned Systems, Inc

Contract Overview

Contract Amount: $28,900,948 ($28.9M)

Contractor: L3harris Unmanned Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2012-01-19

End Date: 2014-03-24

Contract Duration: 795 days

Daily Burn Rate: $36.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY11 SLEP AVAILABILITY OF LCAC 75 AND 80, WITH PRICED OPTIONS FOR FY12 SLEP OF LCAC 82 AND 73. ASSOCIATED PIO LINE ITEMS FOR PSA AND EMERGENT WORK.

Place of Performance

Location: CAMP PENDLETON, SAN DIEGO County, CALIFORNIA, 92055

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to L3HARRIS UNMANNED SYSTEMS, INC for work described as: FY11 SLEP AVAILABILITY OF LCAC 75 AND 80, WITH PRICED OPTIONS FOR FY12 SLEP OF LCAC 82 AND 73. ASSOCIATED PIO LINE ITEMS FOR PSA AND EMERGENT WORK. Key points: 1. The contract value of $28.9 million for Ship Building and Repairing services represents a significant investment in naval readiness. 2. Awarded under full and open competition, this contract suggests a competitive bidding process that could lead to favorable pricing. 3. The definitive contract type with a firm fixed price indicates a clear scope and cost control for the government. 4. The duration of 795 days suggests a substantial project requiring extensive work and oversight. 5. The North American Industry Classification System (NAICS) code 336611 points to specialized shipbuilding and repair capabilities. 6. The absence of small business set-aside flags indicates the primary contractor is likely a large business, with potential subcontracting opportunities.

Value Assessment

Rating: good

The contract value of $28.9 million for the Ship Building and Repairing sector appears reasonable given the scope of modernizing Landing Craft Air Cushion (LCAC) vessels. Benchmarking against similar defense modernization contracts would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract helps in managing costs, but the final expenditure will depend on the utilization of priced options.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, potentially leading to better pricing and innovative solutions for the Department of Defense. The number of bidders is not specified, but the open competition suggests a healthy market for these specialized services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through competitive bidding and encourages a wider range of contractors to offer their services, driving efficiency.

Public Impact

The primary beneficiaries are the U.S. Navy, which will receive modernized LCACs essential for amphibious operations. The services delivered include the Service Life Extension Program (SLEP) for LCAC 75 and 80, with options for LCAC 82 and 73. The geographic impact is primarily within naval bases and operational areas where LCACs are deployed, likely impacting coastal regions and naval fleet readiness. Workforce implications include skilled labor in shipbuilding, repair, and specialized systems integration, potentially supporting jobs in the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if priced options are extensively utilized without strict oversight.
Dependence on a single contractor for critical modernization services could pose a risk if performance issues arise.
The long duration of the contract necessitates sustained government oversight to ensure timely and quality delivery.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Firm fixed-price contract type provides cost certainty for the government.
The contract addresses the critical need for extending the service life of essential naval assets.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically the shipbuilding and repair sector, which is a critical component of national security. The market for specialized naval vessel modernization is concentrated among a few key defense contractors. Spending in this area is driven by the need to maintain and upgrade aging fleets to meet operational requirements and technological advancements. Comparable spending benchmarks would involve other major naval modernization programs.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions (ss: false, sb: false). This suggests that the primary contract was awarded to a large business. However, L3Harris Unmanned Systems, Inc. may engage small businesses as subcontractors to fulfill specific components or services, contributing to the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded in the firm fixed-price contract terms and delivery schedules. Transparency is facilitated through contract award databases and reporting requirements, though specific details of ongoing oversight activities may not be publicly disclosed.

Related Government Programs

Naval Ship Modernization Programs
Amphibious Assault Vehicle Support
Defense Logistics and Readiness Contracts
Ship Building and Repair Services

Risk Flags

Potential for cost growth if priced options are extensively utilized.
Contract duration requires sustained oversight to ensure timely completion.
Dependence on a single contractor for critical modernization services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to L3HARRIS UNMANNED SYSTEMS, INC. FY11 SLEP AVAILABILITY OF LCAC 75 AND 80, WITH PRICED OPTIONS FOR FY12 SLEP OF LCAC 82 AND 73. ASSOCIATED PIO LINE ITEMS FOR PSA AND EMERGENT WORK.

Who is the contractor on this award?

The obligated recipient is L3HARRIS UNMANNED SYSTEMS, 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 $28.9 million.

What is the period of performance?

Start: 2012-01-19. End: 2014-03-24.

What is the historical spending pattern for LCAC modernization or similar naval vessel life extension programs by the Department of Defense?

Historical spending on LCAC modernization and similar naval vessel life extension programs by the Department of Defense has been substantial, reflecting the continuous need to maintain and upgrade aging fleets. While specific figures for LCAC SLEP are not readily available in the public domain without deep dives into specific program budgets, the overall budget for naval ship maintenance, repair, and modernization runs into billions of dollars annually. These programs are critical for ensuring the operational readiness of the U.S. Navy's fleet, which includes a wide array of vessels requiring regular upgrades to incorporate new technologies, enhance performance, and extend their service lives. The trend generally shows consistent investment, with peaks and troughs influenced by fleet age, strategic priorities, and available funding. Contracts like the one awarded to L3Harris Unmanned Systems, Inc. are part of this ongoing effort to sustain naval power projection capabilities.

How does the awarded price of $28.9 million compare to the estimated value or previous contracts for similar LCAC modernization efforts?

Direct comparison of the $28.9 million award to previous LCAC modernization contracts is challenging without access to historical contract data for identical services. However, the value appears to be within a reasonable range for a Service Life Extension Program (SLEP) involving multiple vessels, especially considering the specialized nature of naval shipbuilding and repair. Factors influencing this price include the scope of work (e.g., structural repairs, system upgrades, avionics modernization), the specific LCAC models (75, 80, 82, 73), and the prevailing market rates for skilled labor and materials in the defense industrial base. The firm fixed-price nature suggests that the government has negotiated a definitive cost, but the utilization of priced options could lead to adjustments. Benchmarking against other major naval platform modernization efforts would provide a broader context for assessing value.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of this LCAC modernization contract?

Key performance indicators (KPIs) for this LCAC modernization contract would likely focus on several critical areas to ensure successful delivery and value for the Department of Defense. These would include adherence to the schedule, ensuring the project is completed within the 795-day duration and by the specified end date of March 24, 2014. Cost control is paramount, particularly with a firm fixed-price contract, so tracking expenditures against the $28.9 million award and managing the utilization of priced options effectively would be crucial. Quality of work is another vital KPI, assessed through inspections, testing, and verification that the modernized LCACs meet all technical specifications and performance requirements. Furthermore, operational readiness and reliability of the upgraded vessels post-modernization would be a key indicator of the program's long-term success. Contractor performance ratings and compliance with contractual terms would also be continuously monitored.

What is the track record of L3Harris Unmanned Systems, Inc. in performing similar defense contracts, particularly in shipbuilding and repair?

L3Harris Technologies, the parent company of L3Harris Unmanned Systems, Inc., has a significant and established track record in the defense sector, providing a wide range of products and services to military and government customers. While L3Harris Unmanned Systems specifically focuses on unmanned platforms, the broader L3Harris entity has extensive experience in areas relevant to this contract, including aerospace systems, electronic warfare, communications, and maritime systems. Their involvement in shipbuilding and repair, though perhaps not their primary specialization, is often integrated within larger platform development and sustainment contracts. Assessing their specific performance on past naval modernization or complex platform integration projects would require a detailed review of their contract history, past performance evaluations, and any reported issues or successes. Generally, large defense contractors like L3Harris are expected to meet stringent performance standards.

What are the potential risks associated with the 'priced options' mentioned in the contract, and how are they managed?

The 'priced options' in this contract allow the Department of Defense to procure additional work or services beyond the base contract scope, such as extending the SLEP to LCAC 82 and 73. The primary risk associated with these options is the potential for cost escalation if they are exercised without careful consideration of necessity and budget availability. Uncontrolled exercise of options can lead to the contract exceeding its initially anticipated total value. Management of these risks typically involves strict government approval processes for exercising any option, ensuring that the additional work aligns with current operational needs and funding. Furthermore, the pricing for these options is pre-negotiated, providing some level of cost certainty, but the government must still evaluate whether that pre-negotiated price represents good value at the time of exercise. Clear contract language defining the conditions under which options can be exercised is crucial for mitigating these risks.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002412R2402

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 44601 GUILFORD DR, ASHBURN, VA, 20147

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: $28,900,948

Exercised Options: $28,900,948

Current Obligation: $28,900,948

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline