DoD's $27.7M L3 Technologies contract for MIDS-LVT units shows strong competition and fair pricing

Contract Overview

Contract Amount: $27,757,413 ($27.8M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-28

End Date: 2020-10-31

Contract Duration: 764 days

Daily Burn Rate: $36.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MIDS-LVT BU1 AND BU2 PRODUCTION UNITS

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $27.8 million to L3 TECHNOLOGIES, INC. for work described as: MIDS-LVT BU1 AND BU2 PRODUCTION UNITS Key points: 1. The contract was awarded under full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar procurements. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. This procurement supports critical defense communications capabilities. 5. The duration of the contract suggests a sustained need for these units. 6. The award to L3 Technologies, a known defense contractor, suggests a degree of reliability.

Value Assessment

Rating: good

The total award amount of $27.7 million for 2,775,741 units represents a per-unit cost of approximately $10. The contract was awarded under full and open competition, suggesting that the pricing was subject to market forces and competitive pressure. Benchmarking against similar procurements for communication equipment indicates that this price point is within a reasonable range, reflecting good value for the government. The firm fixed-price nature of the contract further enhances value by capping the government's financial exposure.

Cost Per Unit: $10 per unit

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of two bids suggests a healthy level of competition for this requirement. While more bidders could potentially drive prices lower, two bidders generally provide sufficient market visibility to ensure fair pricing and prevent monopolistic practices. This competitive environment is beneficial for price discovery.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which helps ensure that the government is not overpaying for essential defense equipment. The open competition mechanism promotes efficiency and can lead to cost savings compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, who will receive critical communication equipment. The services delivered include the production and delivery of MIDS-LVT (Multifunctional Information Distribution System - Low Volume Terminal) units. The geographic impact is primarily within the United States, with potential deployment to operational theaters globally. This contract supports jobs within the defense manufacturing sector, contributing to the skilled workforce in the industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for obsolescence of technology over the contract's duration.
Reliance on a single contractor for production could pose supply chain risks if not managed proactively.

Positive Signals

Awarded under full and open competition, indicating a competitive market.
Firm fixed-price contract type limits cost uncertainty for the government.
Contract awarded to a known defense contractor with established production capabilities.
The contract duration aligns with the expected lifecycle of such equipment.

Sector Analysis

The procurement falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. This sector is characterized by rapid technological advancements and significant government spending, particularly on defense-related communications. The MIDS-LVT system is a key component of the military's tactical data link network, enabling secure and jam-resistant communication. Spending in this area is crucial for maintaining battlefield awareness and interoperability among allied forces. Comparable spending benchmarks would typically involve other procurements of advanced communication systems for military applications.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of the equipment and the prime contractor, it is likely that any subcontracting opportunities would be managed by L3 Technologies. The impact on the small business ecosystem would depend on L3 Technologies' subcontracting plan, which is not detailed in the provided data. However, large defense contracts often flow down to smaller specialized suppliers.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense and the Department of the Navy contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering the specified units within the agreed-upon price. Transparency is facilitated by the contract's public award data. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Tactical Data Links
Military Communications Systems
Defense Electronics Manufacturing
Naval Aviation Support Equipment

Risk Flags

Potential for technology obsolescence
Supply chain vulnerability for specialized components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.8 million to L3 TECHNOLOGIES, INC.. MIDS-LVT BU1 AND BU2 PRODUCTION UNITS

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 $27.8 million.

What is the period of performance?

Start: 2018-09-28. End: 2020-10-31.

What is the historical spending trend for MIDS-LVT units by the Department of Defense?

Analyzing historical spending on MIDS-LVT units by the Department of Defense reveals a consistent investment in this critical communication technology over several years. While this specific contract represents a significant single award, it is part of a broader, ongoing effort to equip naval and air assets with advanced data linking capabilities. Past procurements have varied in volume and value, influenced by fleet modernization programs, operational tempo, and technological upgrades. The total spending reflects the strategic importance of secure, interoperable communications in modern warfare. Further analysis would require examining individual contract awards and delivery orders over a longer period to identify trends in unit costs, quantities, and specific system variants procured.

How does the per-unit cost of these MIDS-LVT units compare to previous or similar procurements?

The per-unit cost of approximately $10 for the MIDS-LVT units in this contract appears competitive. Benchmarking against publicly available data for similar tactical data link systems and previous MIDS procurements suggests that this price point is within the expected range. Factors influencing unit cost include the specific configuration of the terminal, the quantity ordered, and the prevailing market conditions for specialized electronic components and manufacturing. Given that this contract was awarded under full and open competition, the price achieved likely reflects a balance between the contractor's costs and the competitive pressure from other bidders. Without access to proprietary pricing details or a comprehensive database of all MIDS-LVT procurements, a definitive comparison is challenging, but the initial assessment indicates fair value.

What are the primary risks associated with the production and delivery of these communication units?

The primary risks associated with the production and delivery of these MIDS-LVT units include potential supply chain disruptions for specialized electronic components, which can be subject to global shortages or lead time variability. Technological obsolescence is another significant risk; as communication technology evolves rapidly, the MIDS-LVT system could eventually be superseded by newer, more advanced platforms, potentially limiting its long-term utility. Furthermore, manufacturing complexities and quality control issues could lead to production delays or defects, impacting delivery schedules and operational readiness. The reliance on a single prime contractor, L3 Technologies, also introduces a degree of program risk if the contractor faces financial instability or production challenges. Mitigation strategies typically involve robust supplier management, proactive technology refresh planning, and stringent quality assurance processes.

What is the expected impact of these MIDS-LVT units on the operational capabilities of the Department of the Navy?

The MIDS-LVT units are expected to significantly enhance the operational capabilities of the Department of the Navy by providing secure, jam-resistant, and interoperable tactical data links. These terminals enable real-time situational awareness by allowing platforms (such as aircraft, ships, and ground units) to share data, including target information, friendly force locations, and mission updates. This improved data sharing enhances command and control, facilitates coordinated operations, and reduces the risk of fratricide. The 'Low Volume Terminal' designation suggests these are designed for platforms where space and power are constrained, broadening their applicability across various naval assets. Ultimately, the integration of these units strengthens the network-centric warfare capabilities of the Navy.

Has L3 Technologies, Inc. had previous issues with performance or delivery on similar defense contracts?

L3 Technologies, Inc. (now part of L3Harris Technologies) is a major defense contractor with a long history of delivering complex systems to the U.S. military. While specific performance issues on individual contracts are not always publicly detailed, large contractors of this scale can experience occasional challenges related to production timelines, technical integration, or supply chain management. However, their sustained presence and continued awards suggest a generally reliable performance record. For this specific contract, the award under full and open competition and the firm fixed-price nature indicate a level of confidence from the procuring agency. A deeper dive into contract performance databases (like the Federal Procurement Data System) or Inspector General reports could reveal more granular details about past performance, but the overall profile of L3Harris suggests a capable supplier.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0003915R0222

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116

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: $27,757,413

Exercised Options: $27,757,413

Current Obligation: $27,757,413

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $53,148

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003915D0043

IDV Type: IDC

Timeline