DoD's $42.1M contract for communication equipment awarded to L3 Technologies, Inc

Contract Overview

Contract Amount: $42,123,914 ($42.1M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-29

End Date: 2027-08-31

Contract Duration: 701 days

Daily Burn Rate: $60.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FACILITIZATION

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $42.1 million to L3 TECHNOLOGIES, INC. for work described as: FACILITIZATION Key points: 1. Contract value represents a significant investment in specialized communication equipment. 2. Awarded under full and open competition, suggesting a potentially competitive bidding process. 3. The contract duration of 701 days indicates a medium-term need for these services. 4. The 'Other Communications Equipment Manufacturing' NAICS code points to a specific, non-standardized product category. 5. The contract type 'COST PLUS FIXED FEE' can sometimes lead to cost overruns if not managed carefully. 6. The absence of small business set-aside flags suggests larger prime contractors are expected to perform the work.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the 'Other Communications Equipment Manufacturing' category. The cost-plus-fixed-fee structure introduces inherent risk for cost control. Comparing this to similar contracts for specialized communication equipment would require access to a broader dataset of comparable procurements. The fixed fee component provides some predictability, but the cost-plus element means the final expenditure could exceed initial estimates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderate level of competition for this specialized requirement. While two bidders are better than one, a higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of potential providers.

Public Impact

The Department of the Navy benefits from the acquisition of critical communication equipment. This contract supports the operational readiness and technological capabilities of naval forces. The geographic impact is primarily within Utah, where the contractor is located. Workforce implications may include specialized manufacturing and engineering roles at L3 Technologies, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize higher spending if not closely monitored.
Limited competition (2 bidders) may not have driven the lowest possible price.
The specific nature of 'Other Communications Equipment' makes it difficult to benchmark value effectively.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Contractor L3 Technologies, Inc. is a known entity in defense contracting.
Clear delivery and performance periods are defined.

Sector Analysis

The defense sector relies heavily on specialized communication equipment for command, control, and intelligence. This contract falls under the 'Other Communications Equipment Manufacturing' category, which can encompass a wide array of niche products. The total addressable market for such specialized equipment is difficult to quantify but is a critical component of national defense spending. Comparable spending benchmarks would depend on the specific type of communication equipment procured.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the prime contractor, L3 Technologies, Inc., is expected to perform the majority of the work, and subcontracting opportunities for small businesses would depend on their internal policies and the specific requirements of the contract. Without explicit small business subcontracting goals, the direct impact on the small business ecosystem is likely limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and performance specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Naval Communication Equipment
Specialized Electronic Manufacturing
Tactical Communication Systems

Risk Flags

Cost-plus contract type introduces potential for cost overruns.
Limited competition (2 bidders) may not have yielded the best price.
NAICS code is broad, making specific value benchmarking difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.1 million to L3 TECHNOLOGIES, INC.. FACILITIZATION

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 $42.1 million.

What is the period of performance?

Start: 2025-09-29. End: 2027-08-31.

What is L3 Technologies, Inc.'s track record with the Department of Defense, particularly for similar communication equipment contracts?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a substantial history of contracting with the Department of Defense across various platforms and services. They are a significant defense contractor known for producing a wide range of electronic systems, including communications, intelligence, surveillance, and reconnaissance (ISR) equipment. Analyzing their past performance on similar cost-plus-fixed-fee contracts for communication equipment would involve reviewing contract histories for on-time delivery, cost performance against initial estimates, and any documented performance issues or awards. A deeper dive would require accessing detailed contract performance reports and award data specific to their work in 'Other Communications Equipment Manufacturing' to assess their reliability and efficiency in delivering complex systems within budget and schedule.

How does the awarded amount of $42.1 million compare to the typical cost of similar communication equipment procured by the Navy?

Directly comparing the $42.1 million award to 'typical' costs for similar communication equipment is challenging without precise specifications of the procured items. The 'Other Communications Equipment Manufacturing' NAICS code is broad. However, for specialized, high-technology communication systems required by the military, costs can range from hundreds of thousands to tens or even hundreds of millions of dollars, depending on complexity, quantity, and technological sophistication. The fact that this contract is for a fixed fee plus costs suggests it involves development or customization, which inherently carries higher price variability than off-the-shelf items. A more accurate benchmark would require identifying contracts with identical or highly similar product descriptions and performance requirements.

What are the primary risks associated with a 'Cost Plus Fixed Fee' (CPFF) contract for communication equipment?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns, as the government agrees to reimburse the contractor for all allowable costs incurred, plus a predetermined fixed fee. While the fixed fee provides the contractor with an incentive to control costs (as it doesn't increase with higher expenses), there's less direct financial incentive compared to fixed-price contracts to minimize costs. The government bears the risk of cost escalation. For complex communication equipment, unforeseen technical challenges, material price fluctuations, or scope creep can significantly increase the 'cost' portion, even if the 'fee' remains constant. Effective oversight, rigorous cost tracking, and clear definition of allowable costs are crucial to mitigate these risks.

What does the 'Other Communications Equipment Manufacturing' NAICS code imply about the nature of the services or products being procured?

The North American Industry Classification System (NAICS) code 334290, 'Other Communications Equipment Manufacturing,' indicates that the contract is for the production of communication equipment not specifically classified under other more specific NAICS codes. This could include a wide range of items such as radio and television broadcasting and wireless communications equipment, telephone apparatus manufacturing, or other specialized electronic communication devices. It suggests the procurement is for tangible manufactured goods rather than services, and that these items are likely custom-designed, highly specialized, or fall into a niche market within the broader communications sector. This specificity (or lack thereof) impacts the ability to benchmark costs and assess competition effectively.

Given the contract duration of 701 days, what are the implications for the Navy's operational planning and equipment lifecycle management?

A contract duration of 701 days (approximately 23 months) for manufacturing communication equipment implies a medium-term procurement cycle. For the Navy's operational planning, this means the equipment is not intended for immediate deployment but rather for integration into future capabilities or replacement of aging systems over the next couple of years. It suggests a need for strategic planning regarding technology insertion and obsolescence management. From an equipment lifecycle perspective, this duration allows for development, testing, and initial production phases. However, it also means that by the time the equipment is delivered and fielded, newer technologies may already be emerging, necessitating careful consideration of upgrade paths and long-term supportability within the contract's scope or subsequent agreements.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other 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: N0003924R4100

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

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: $42,123,914

Exercised Options: $42,123,914

Current Obligation: $42,123,914

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $4,231,093

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003925D4007

IDV Type: IDC

Timeline