DoD's $346M MIDS JTRS Terminal contract awarded to L3 Technologies, Inc. with no competition

Contract Overview

Contract Amount: $34,627,384 ($34.6M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-30

End Date: 2025-03-31

Contract Duration: 2,009 days

Daily Burn Rate: $17.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MIDS JTRS TERMINAL

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $34.6 million to L3 TECHNOLOGIES, INC. for work described as: MIDS JTRS TERMINAL Key points: 1. The contract's significant value raises questions about potential cost efficiencies achievable through competitive bidding. 2. The sole-source award limits opportunities for market-driven price discovery and innovation from other vendors. 3. A lack of competition may indicate potential risks related to vendor lock-in and reduced accountability. 4. The contract spans over five years, suggesting a long-term need for these specialized communication terminals. 5. This award falls within the defense sector, specifically for wireless communications equipment manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this $346 million contract is challenging without detailed cost breakdowns or comparisons to similar sole-source awards. The absence of competition means there's no direct market price to compare against. However, the substantial duration and value suggest a critical need, but the lack of competitive pressure could lead to less favorable pricing than if multiple vendors had vied for the contract. Further analysis of the specific components and their market prices would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, L3 Technologies, Inc., was considered. This approach bypasses the standard competitive bidding process, which typically involves soliciting proposals from multiple interested parties. The lack of competition means that taxpayers did not benefit from the potential for lower prices or improved terms that could arise from a bidding war among qualified suppliers.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the best possible value for public funds.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, receiving advanced communication terminals. The contract delivers essential wireless communication equipment critical for military operations and command and control. The geographic impact is primarily within defense installations, though the equipment supports global military operations. This contract supports specialized manufacturing jobs within the defense industrial base, particularly in wireless communications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Long contract duration (2019-2025) may not reflect current market pricing.
Lack of competition could reduce incentives for vendor innovation and efficiency.
Specific performance metrics and delivery schedules are not detailed in the provided data.

Positive Signals

Award to an established contractor (L3 Technologies) suggests potential for reliable delivery.
Contract addresses a critical defense need for advanced communication systems.
Firm Fixed Price contract type provides cost certainty for the government.

Sector Analysis

This contract falls within the broader Information Technology and Defense sectors, specifically focusing on Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. The market for military communication systems is highly specialized, often dominated by a few key defense contractors capable of meeting stringent performance and security requirements. The size of this specific contract, over $346 million, indicates a significant investment in advanced communication technology, likely for a critical operational capability. Comparable spending benchmarks would typically involve other large sole-source or competitively awarded contracts for similar defense communication hardware.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large prime contractor, L3 Technologies, Inc., there are no explicit subcontracting requirements for small businesses detailed here. This means that opportunities for small businesses to participate in this specific contract are likely limited to those they might secure directly from L3 Technologies, rather than through mandated set-asides or competitive subcontracting opportunities that arise from a fully competed contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the lack of public competition details. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution and performance.

Related Government Programs

MIDS (Multifunctional Information Distribution System)
JTRS (Joint Tactical Radio System)
Defense Communications Systems
Wireless Communication Equipment Procurement
Department of the Navy Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award limits competition.
Potential for higher costs due to lack of competitive bidding.
Risk of vendor lock-in with a single supplier.
Long-term contract duration may not reflect current market efficiencies.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.6 million to L3 TECHNOLOGIES, INC.. MIDS JTRS TERMINAL

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 $34.6 million.

What is the period of performance?

Start: 2019-09-30. End: 2025-03-31.

What is the specific justification for awarding this $346 million contract on a sole-source basis to L3 Technologies, Inc.?

The provided data indicates the contract was awarded as 'NOT COMPETED' (ct: NOT COMPETED). Typically, sole-source awards are justified when only one responsible source is available or capable of meeting the government's needs, or in cases of urgent need where competition is not feasible. For a contract of this magnitude and duration (2019-2025), the justification likely stems from the specialized nature of the MIDS JTRS terminals, potentially involving proprietary technology, unique integration requirements with existing military systems, or a lack of alternative qualified vendors in the market. A detailed review of the contract's justification documentation, often found in contract award notices or agency justifications for other than full and open competition, would be necessary to ascertain the precise reasons.

How does the $346 million total value compare to historical spending on similar MIDS JTRS terminals or related communication systems?

Comparing the $346 million total value requires context on the scope and duration of previous procurements. The contract's end date is March 31, 2025, with a start date implied by the award date (likely around September 30, 2019, given the delivery order context). This suggests an average annual spending of approximately $57.7 million ($346M / 6 years). Historical spending on MIDS JTRS terminals can vary significantly based on production phases, technological upgrades, and the number of units procured. Without specific historical data points for comparable MIDS JTRS terminal procurements, it's difficult to definitively state if $346 million represents an increase, decrease, or is in line with past investments. However, the substantial amount indicates a continued, significant investment in this communication capability.

What are the key performance indicators (KPIs) or metrics used to assess the performance of L3 Technologies, Inc. under this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or metrics used to assess L3 Technologies, Inc.'s performance under this contract. Typically, government contracts, especially those for complex defense systems, include detailed performance standards related to factors such as delivery timeliness, equipment reliability, technical performance (e.g., signal clarity, range, security), and adherence to specifications. These metrics are usually outlined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). The government would monitor these KPIs to ensure the contractor is meeting its obligations. Without access to the full contract details, a precise assessment of performance metrics is not possible.

What is the risk profile associated with a sole-source contract of this magnitude for critical defense communication equipment?

Sole-source contracts of this magnitude for critical defense equipment carry several inherent risks. Firstly, the lack of competition can lead to higher costs for taxpayers, as there is no market pressure to drive down prices. Secondly, it creates a dependency on a single supplier (vendor lock-in), which can be problematic if the contractor faces financial difficulties, production issues, or decides to discontinue the product line. Thirdly, reduced competition may lessen the contractor's incentive to innovate or maintain high levels of service and quality over the contract's lifespan. Finally, oversight becomes even more critical to ensure fair pricing and adequate performance, as there are no competing bids to benchmark against. The government must rely heavily on its own technical expertise and negotiation skills.

Are there any provisions within the contract for technology refresh or upgrades to ensure the MIDS JTRS terminals remain current?

The provided summary data does not explicitly detail provisions for technology refresh or upgrades within this contract. However, given the contract duration extending to March 2025 and the rapid evolution of communication technology, it is highly probable that such provisions exist, either as formal contract modifications, options, or within the scope of ongoing sustainment and support agreements. Defense communication systems often require periodic upgrades to maintain operational effectiveness against evolving threats and technological advancements. L3 Technologies, as the incumbent provider, would likely be involved in discussions regarding future upgrades or replacements, potentially through follow-on contracts or contract modifications.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003914R0021

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

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: $34,627,384

Exercised Options: $34,627,384

Current Obligation: $34,627,384

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $14,071,993

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003915D0008

IDV Type: IDC

Timeline