DoD awards $4.8M R&D contract for engineering services to L3 Technologies, Inc

Contract Overview

Contract Amount: $4,813,994 ($4.8M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-05-05

End Date: 2030-05-05

Contract Duration: 1,826 days

Daily Burn Rate: $2.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: ENGINEERING SERVICES

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $4.8 million to L3 TECHNOLOGIES, INC. for work described as: ENGINEERING SERVICES Key points: 1. Contract awarded for specialized engineering services, indicating a need for advanced technical expertise. 2. The contract duration of 1826 days suggests a long-term requirement for these services. 3. Awarded as a definitive contract, implying a clear scope of work and deliverables. 4. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code points to innovation-focused activities. 5. The contract is not competitively procured, raising questions about potential cost efficiencies. 6. Virginia is the stated location, potentially impacting local economic and workforce development.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the engineering services provided and comparable market rates. The Cost Plus Fixed Fee (CPFF) pricing structure can sometimes lead to higher costs if not carefully managed, as it allows the contractor to recover allowable costs plus a predetermined fee. Without a competitive bidding process, it is difficult to ascertain if the fixed fee represents a fair market value for the services rendered. Further analysis would require understanding the specific deliverables and the complexity of the R&D involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' designation, indicating a sole-source procurement. This means only one contractor, L3 Technologies, Inc., was solicited for this requirement. The lack of competition means the government did not explore alternative sources, which can limit price discovery and potentially lead to higher costs for taxpayers. The rationale for sole-source awards typically involves unique capabilities, urgent needs, or lack of market availability, but these justifications are not detailed here.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing. Taxpayers may bear a higher cost due to the absence of competitive pressure on the contractor to offer the most economical solution.

Public Impact

The primary beneficiary is the Department of the Navy, which will receive specialized engineering services to support its research and development objectives. The services delivered are expected to advance physical, engineering, and life sciences research, potentially leading to new technologies or improved existing ones. The contract's geographic impact is centered in Virginia, where the services will be performed, potentially creating or sustaining high-skilled jobs in the region. The contract supports a workforce of engineers and researchers, contributing to the specialized technical talent pool within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for the government.
The Cost Plus Fixed Fee structure requires robust oversight to manage costs effectively.
Specific details on the R&D scope are limited, making it hard to assess the true value proposition.
The contract's long duration could present risks if project requirements change significantly.

Positive Signals

Award to an established entity (L3 Technologies, Inc.) suggests potential for reliable service delivery.
The contract focuses on R&D, indicating investment in future technological capabilities.
The definitive contract type provides a clear framework for the engagement.
The specific NAICS code suggests a focus on advanced scientific and engineering disciplines.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This sector is critical for national security and technological advancement, often characterized by long development cycles and specialized expertise. Comparable spending in this area by the Department of Defense is substantial, as R&D is a key component of maintaining a technological edge. The market for such specialized engineering services is often concentrated among a few large, technically capable firms.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'ss': false. Furthermore, the contractor, L3 Technologies, Inc., is a large business, suggesting that subcontracting opportunities for small businesses may be limited or dependent on the specific needs of the project. Analysis of subcontracting plans would be necessary to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant program office within the Department of the Navy. Given the Cost Plus Fixed Fee structure, rigorous financial oversight and performance monitoring will be crucial to ensure that costs are reasonable and allocable, and that the fixed fee is earned through satisfactory performance. Transparency regarding the specific R&D objectives and progress would be beneficial for public accountability.

Related Government Programs

Department of Defense Research and Development Programs
Navy Science and Technology Initiatives
Advanced Engineering Services Contracts
Federal Research and Development Spending

Risk Flags

Sole-source award
Cost-plus contract type
Limited scope definition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.8 million to L3 TECHNOLOGIES, INC.. ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is L3 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 $4.8 million.

What is the period of performance?

Start: 2025-05-05. End: 2030-05-05.

What is the specific nature of the engineering services being procured under this contract?

The provided data indicates the contract is for 'ENGINEERING SERVICES' under NAICS code 541715, which covers 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)'. However, the specific nature of these services is not detailed. This could range from advanced materials research, system design and integration, simulation and modeling, to testing and evaluation of complex systems. Without further documentation, such as a Statement of Work (SOW) or Performance Work Statement (PWS), the precise technical objectives and deliverables remain unspecified. Understanding the exact scope is critical for assessing the contract's value and risks.

How does the $4.8 million contract value compare to similar R&D engineering service contracts awarded by the Department of the Navy?

Comparing the $4.8 million contract value requires access to a broader dataset of similar contracts. However, for a definitive contract with a duration of 1826 days (approximately 5 years), $4.8 million represents an average annual value of roughly $1 million. This figure is moderate for specialized R&D engineering services within the Department of Defense, which often procures large-scale, multi-year R&D efforts costing tens or hundreds of millions of dollars. Smaller, focused R&D projects can fall within this range. Without specific benchmarks for the exact type of engineering services, it's difficult to definitively state if this represents high or low value, but it appears to be a mid-sized investment for a long-term R&D effort.

What are the primary risks associated with a sole-source award for R&D engineering services?

The primary risk associated with a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. The government may not achieve the best possible value for its investment. Another risk is that the contractor may have less incentive to innovate or perform efficiently if they are the only option. Furthermore, without competition, there's a reduced opportunity to discover new or more capable vendors. For R&D, there's also the risk that the chosen contractor's specific expertise, while unique, might not be the absolute best fit for evolving project needs over the contract's five-year duration, and switching sources would be difficult.

What is the track record of L3 Technologies, Inc. in performing government R&D contracts?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a significant history of performing government contracts, including those in research and development. They are a major defense contractor known for providing a wide range of technologies and services to military branches. While specific performance metrics for this particular contract are not yet available due to its recent award, the company's extensive experience suggests a capacity to handle complex R&D projects. However, as with any large contractor, past performance can vary across different contracts and agencies. A detailed review of their contract history, including any past performance issues or successes with similar R&D efforts, would provide a more comprehensive understanding.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract type aims to balance risk between the government and the contractor. The government agrees to pay the contractor's allowable costs incurred in performing the contract, plus a fixed fee representing the contractor's profit. This structure is often used when the scope of work is not precisely defined, as is common in R&D. For cost control, the government must diligently audit and approve all incurred costs to ensure they are reasonable and allocable. The fixed fee provides a ceiling on the contractor's profit, incentivizing them to complete the work efficiently to maximize their return on investment within that fee. However, it can also create an incentive for the contractor to incur costs to justify the fee, rather than necessarily minimizing them, necessitating strong government oversight.

What are the potential implications of awarding this contract in Virginia?

Awarding this engineering services contract in Virginia has several potential implications. Virginia has a significant presence of defense contractors and a highly skilled workforce in engineering and technology sectors, partly due to its proximity to federal agencies and military installations. This contract could therefore leverage existing talent pools and infrastructure. It may also contribute to the local economy through job creation, particularly for high-skilled engineers and researchers, and through indirect spending by the contractor and its employees. The concentration of defense-related work in Virginia means that such contracts are common, but they also contribute to the region's economic reliance on the defense sector.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002425R5212

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2235 MONROE ST FL 3, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,677,661

Exercised Options: $8,906,422

Current Obligation: $4,813,994

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline