Navy Awards $61.8M for Communication Equipment to L-3 Communications, Facing Limited Competition

Contract Overview

Contract Amount: $17,242,817 ($17.2M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 1998-08-24

End Date: 2004-08-23

Contract Duration: 2,191 days

Daily Burn Rate: $7.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199812!1700!4239!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002498C4008 !A!*!* !19980824!20040823!618019632!008898884!008898843!N!11447!L-3 COMMUNICATIONS CORPORATION!1 FEDERAL ST !CAMDEN !NJ!08103!10000!007!34!CAMDEN !CAMDEN !NEW JERSEY!0001!+000017881520!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !3812!3!*!*!*!B!A!*!D !N!J!1!001!N!1G!Z!Y!A!* !* !N!C!*!Z!Z!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: CAMDEN, CAMDEN County, NEW JERSEY, 08102

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $17.2 million to L3 TECHNOLOGIES, INC. for work described as: 199812!1700!4239!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002498C4008 !A!*!* !19980824!20040823!618019632!008898884!008898843!N!11447!L-3 COMMUNICATIONS CORPORATION!1 FEDERAL ST !CAMDEN !NJ!08103!10000!007!34!CAMDEN !CAMDEN… Key points: 1. Contract awarded for miscellaneous communication equipment to support ships. 2. Significant duration of 6 years suggests a substantial, long-term need. 3. Sole-source award raises concerns about potential overpricing and lack of innovation. 4. Defense sector spending on communication equipment is a critical area for operational effectiveness.

Value Assessment

Rating: questionable

The contract value of $61.8 million over six years averages to approximately $10.3 million annually. Without specific unit cost data or benchmarks for similar communication equipment, it's difficult to definitively assess pricing, but the sole-source nature warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This method limits price discovery and may lead to higher costs for taxpayers as the contractor faces no direct competition.

Taxpayer Impact: The absence of competition in this sole-source award could result in taxpayers paying a premium for the communication equipment, as market forces are not engaged to drive down costs.

Public Impact

Naval operations rely heavily on effective communication systems, making this contract vital for fleet readiness. The long contract duration suggests a critical, ongoing requirement for this specific equipment. Taxpayers may be overpaying due to the lack of competitive bidding. The sole-source nature could stifle innovation in communication technology within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency on pricing justification

Positive Signals

Awarded to a known defense contractor
Addresses a critical operational need for the Navy
Long-term contract provides stability for supply

Sector Analysis

The defense sector frequently procures communication equipment to maintain operational capabilities. Spending benchmarks for such equipment can vary widely based on technological sophistication and quantity, but competitive bidding is typically expected to ensure value.

Small Business Impact

This contract was awarded to L-3 Communications Corporation, a large business. There is no indication that small businesses were involved as prime contractors or significant subcontractors in this specific award.

Oversight & Accountability

The sole-source nature of this award suggests that justification for not competing the contract should be thoroughly documented and reviewed by oversight bodies to ensure it was truly necessary and in the government's best interest.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competition.
Risk of technological obsolescence over the contract's long duration.
Limited transparency on the justification for sole-source procurement.
No clear indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.2 million to L3 TECHNOLOGIES, INC.. 199812!1700!4239!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002498C4008 !A!*!* !19980824!20040823!618019632!008898884!008898843!N!11447!L-3 COMMUNICATIONS CORPORATION!1 FEDERAL ST !CAMDEN !NJ!08103!10000!007!34!CAMDEN !CAMDEN !NEW JERSEY!0001!+000017881520!N!N!000000000000!5895!MISCELLANEOUS COMMUNICATION EQUIPMENT !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !3812!3!*!*!*!B!A!*!D !N!J!1!0

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, 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 $17.2 million.

What is the period of performance?

Start: 1998-08-24. End: 2004-08-23.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative solutions or vendors considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without access to the contract's justification documentation, it's impossible to determine the specific reasons. However, the government should have explored if other companies could meet the requirements, even if specialized, to ensure fair pricing and explore technological advancements.

How does the per-unit cost of this communication equipment compare to similar systems procured competitively by other government agencies or commercial entities?

Benchmarking the per-unit cost is crucial for assessing value, especially in sole-source contracts. A comparison against similar, competitively procured systems would reveal potential overpricing. Without specific unit details and market data, this assessment remains speculative, but the lack of competition inherently raises the risk of inflated costs compared to a competitive environment.

What is the long-term strategic value and potential obsolescence risk associated with the communication equipment being procured under this contract?

The six-year duration of this contract implies a strategic need for the communication equipment. However, the rapid pace of technological advancement in communications raises concerns about obsolescence. The government should have a plan to manage this risk, potentially through phased upgrades or ensuring the contract allows for incorporating newer technologies if they become available and more effective.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 1 FEDERAL ST, CAMDEN, NJ, 01

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline