DoD's $48M C4ISTAR FMS contract to L3Harris Technologies awarded without competition

Contract Overview

Contract Amount: $48,030,069 ($48.0M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-01-19

End Date: 2022-12-31

Contract Duration: 1,807 days

Daily Burn Rate: $26.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: C4ISTAR- FMS PHILIPPINES

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14610

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $48.0 million to L3HARRIS TECHNOLOGIES, INC. for work described as: C4ISTAR- FMS PHILIPPINES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 1807 days suggests a long-term need for these services. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns. 4. The specific services provided under C4ISTAR are critical for defense operations. 5. The contract was awarded to L3Harris Technologies, Inc., a major defense contractor. 6. The contract's value of approximately $48 million warrants scrutiny for value for money.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific C4ISTAR FMS application. Without competitive bids, it's difficult to ascertain if the $48 million represents a fair market price. The CPFF structure, while allowing for flexibility, also carries inherent risks of cost escalation compared to fixed-price contracts. Further analysis would require detailed cost breakdowns and comparisons to similar sole-source C4ISTAR procurements, which are not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source procurement. This means that only one bidder, L3Harris Technologies, Inc., was solicited. The lack of competition means that the Department of Defense did not explore alternative solutions or pricing from other potential vendors, which can lead to higher prices and reduced innovation.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government lacked leverage to negotiate the best possible price, potentially resulting in funds being spent that could have been saved through a competitive process.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, receiving critical C4ISTAR capabilities. The services delivered are essential for command, control, communications, computers, intelligence, surveillance, reconnaissance, and targeting (C4ISTAR) systems. The contract supports U.S. military operations and potentially allied forces through Foreign Military Sales (FMS). The contract likely impacts a specialized workforce within L3Harris Technologies, Inc., requiring expertise in advanced defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending and lacks strong cost control.
Lack of transparency in the justification for sole-source award.
Long contract duration (1807 days) may indicate a lack of market research or urgency in finding competitive solutions.
The specific nature of C4ISTAR systems can create vendor lock-in, making future competition difficult.

Positive Signals

Contract awarded to a known entity, L3Harris Technologies, Inc., suggesting a potentially reliable provider.
The contract addresses critical C4ISTAR capabilities essential for national security.
The FMS component indicates support for allied defense capabilities, fostering international partnerships.

Sector Analysis

This contract falls within the Information Technology and Defense sectors, specifically focusing on complex C4ISTAR systems. The market for such specialized defense technology is often dominated by a few large contractors due to high barriers to entry, including intellectual property, security clearances, and R&D investment. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the C4ISTAR systems involved, but large-scale defense IT procurements can run into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor, L3Harris Technologies, Inc., is a large corporation. There is no explicit information provided regarding subcontracting plans for small businesses. This suggests that the primary focus of this contract is not on engaging the small business ecosystem, and opportunities for small businesses may be limited unless they are lower-tier suppliers to the prime.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Inspector General of the Department of Defense would have jurisdiction to investigate potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award and the proprietary details of C4ISTAR systems. Accountability would be managed through contract performance reviews and adherence to the terms of the Cost Plus Fixed Fee agreement.

Related Government Programs

Defense Information Systems Agency (DISA) contracts
Intelligence, Surveillance, and Reconnaissance (ISR) systems procurement
Command and Control (C2) systems development
Foreign Military Sales (FMS) program support
Tactical Data Link (TDL) systems

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.0 million to L3HARRIS TECHNOLOGIES, INC.. C4ISTAR- FMS PHILIPPINES

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 $48.0 million.

What is the period of performance?

Start: 2018-01-19. End: 2022-12-31.

What is the specific justification provided by the Department of Defense for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is a designation for sole-source procurements. However, the specific justification document (e.g., Justification and Approval - J&A) is not included in the data. Typically, sole-source awards require a detailed justification outlining why full and open competition is not feasible or not in the government's best interest. Common reasons include unique capabilities possessed by only one source, urgent and compelling needs where only one source can meet the requirement, or specific circumstances related to national security or international agreements. Without the J&A, it is impossible to verify the validity of the sole-source determination.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types in terms of cost efficiency for the government?

Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs incurred, plus a fixed fee representing profit. This structure is often used when the scope of work is not well-defined or involves significant uncertainty, such as research and development or complex system integration. While it allows for flexibility and ensures the contractor is compensated for unforeseen costs, it generally offers less cost control for the government compared to fixed-price contracts (like Firm-Fixed-Price or Fixed-Price Incentive). With CPFF, the contractor has less incentive to control costs because their profit (the fixed fee) is predetermined. This can lead to higher overall costs for the government if not managed diligently through robust oversight and cost monitoring.

What are the potential risks associated with a long contract duration (1807 days) for C4ISTAR systems?

A long contract duration of 1807 days (nearly five years) for C4ISTAR systems presents several risks. Firstly, technology in the C4ISTAR domain evolves rapidly; a system designed or procured at the beginning of such a long period may become outdated or less effective by its end. Secondly, it can lead to vendor lock-in, making it difficult and costly to switch providers or adopt newer technologies later. Thirdly, long-term contracts can reduce flexibility for the government to adapt to changing mission requirements or threat landscapes. Finally, without regular competitive re-evaluation, there's a risk of complacency from the contractor and potentially suboptimal performance or pricing over the extended period.

What is the significance of 'C4ISTAR - FMS PHILIPPINES' in the context of this contract?

The designation 'C4ISTAR - FMS PHILIPPINES' indicates that the contract is for Command, Control, Communications, Computers, Intelligence, Surveillance, Reconnaissance, and Targeting (C4ISTAR) systems and that these systems are being provided to the Philippines through the U.S. Department of Defense's Foreign Military Sales (FMS) program. The FMS program enables U.S. allies and partners to purchase U.S. defense articles and services. This implies that the contract's ultimate end-user or beneficiary is the Armed Forces of the Philippines, and the U.S. Department of Defense is acting as an intermediary to procure and deliver these capabilities. This also suggests potential interoperability requirements with U.S. systems.

How does the contractor, L3Harris Technologies, Inc., typically perform on similar government contracts?

L3Harris Technologies, Inc. is a major defense contractor with a significant portfolio of government contracts, particularly in areas related to aerospace, defense, and communications. While specific performance metrics for this particular contract are not detailed in the provided data, L3Harris generally has a track record of delivering complex systems and services to the DoD. However, like many large defense contractors, they may face scrutiny regarding contract costs, schedule adherence, and technical performance on specific programs. A comprehensive assessment of their track record would require reviewing past performance evaluations, contract award histories, and any reported issues or disputes on similar C4ISTAR or FMS-related contracts.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003916R0084

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 1680 UNIVERSITY AVE, ROCHESTER, NY, 14610

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: $52,235,630

Exercised Options: $48,776,842

Current Obligation: $48,030,069

Subaward Activity

Number of Subawards: 53

Total Subaward Amount: $48,150,196

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline