DoD's $37M Integrated Plane Phase 1 contract awarded to L3Harris Technologies for aircraft manufacturing

Contract Overview

Contract Amount: $36,972,987 ($37.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2010-11-22

End Date: 2013-09-25

Contract Duration: 1,038 days

Daily Burn Rate: $35.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: INTERGRATED PLANE- PHASE 1

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $37.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: INTERGRATED PLANE- PHASE 1 Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Significant duration of over 1000 days suggests a complex and lengthy project. 3. Cost-plus-fixed-fee structure may incentivize cost overruns. 4. The contract falls under the Aircraft Manufacturing sector, indicating specialized defense production. 5. Awarded by the Defense Contract Management Agency, suggesting a focus on program oversight. 6. Texas-based contractor indicates potential regional economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific, likely proprietary, nature of 'Integrated Plane - Phase 1'. Without comparable contracts or detailed cost breakdowns, assessing true value-for-money is difficult. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D or uncertain scope projects, carries inherent risks of cost escalation if not rigorously managed. The reported value of approximately $37 million over three years suggests a substantial investment, but its efficiency relative to potential alternatives remains unclear.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' (sole-source) justification. This means that only one source, L3Harris Technologies Integrated Systems L.P., was solicited or considered for this award. The lack of competition means that the government did not benefit from the potential for lower prices or improved terms that could arise from multiple bidders vying for the contract. The rationale for sole-sourcing is not provided but typically involves unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, there is less assurance that the price reflects the lowest possible cost for the required goods or services.

Public Impact

The primary beneficiary is the Department of Defense, which receives advanced aircraft manufacturing capabilities. The contract supports the development and production of specialized aircraft components or systems. The geographic impact is concentrated in Texas, where L3Harris Technologies Integrated Systems L.P. is located. The contract likely supports a skilled workforce in aerospace engineering and manufacturing within the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely monitored.
Lack of competition raises questions about the government's ability to secure the best possible value.
The specific nature of 'INTERGRATED PLANE- PHASE 1' is not detailed, making independent assessment of necessity and scope difficult.

Positive Signals

Award to a known entity, L3Harris Technologies, suggests a potentially established relationship and understanding of requirements.
The contract duration (over 1000 days) indicates a significant, long-term project likely aligned with strategic defense needs.
The contract falls under NAICS code 336411 (Aircraft Manufacturing), indicating a focus on a critical defense industrial base sector.

Sector Analysis

The Aircraft Manufacturing sector (NAICS 336411) is a critical component of the defense industrial base, involving the design, development, and production of aircraft, missiles, and related parts. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality and performance requirements. Federal spending in this area is substantial, driven by national security needs for advanced aerial platforms. Contracts often involve complex systems integration and long production cycles. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the 'Integrated Plane - Phase 1' project, but large-scale aircraft development programs can run into billions of dollars.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no indication of subcontracting requirements specifically for small businesses in the provided data. The prime contractor, L3Harris Technologies, is a large aerospace and defense company. Therefore, this specific award does not appear to directly benefit the small business ecosystem through set-asides. However, large prime contractors often engage small businesses as subcontractors for specialized components or services, which could indirectly impact small businesses, though this is not explicitly detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet performance, quality, and delivery requirements. The specific oversight mechanisms for a cost-plus-fixed-fee contract would involve detailed financial reviews, progress reporting, and potentially site inspections. Transparency is limited by the sole-source nature and the proprietary details of the project. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Manufacturing
Defense Procurement
Aerospace Technology Development
Cost-Plus Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of detailed project scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. INTERGRATED PLANE- PHASE 1

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $37.0 million.

What is the period of performance?

Start: 2010-11-22. End: 2013-09-25.

What is the specific nature and objective of 'INTERGRATED PLANE- PHASE 1'?

The provided data does not specify the exact nature or objective of 'INTERGRATED PLANE- PHASE 1'. The description 'Aircraft Manufacturing' and the NAICS code 336411 suggest it relates to the production or development of aircraft or aircraft components. 'Phase 1' implies it is an initial stage of a larger project, possibly involving research, design, prototyping, or early-stage manufacturing. Without further details from the contracting agency (Department of Defense) or the contractor (L3Harris Technologies), the precise goals, deliverables, and technological advancements intended by this phase remain unclear. This lack of specificity makes it difficult to fully assess the contract's strategic importance or its alignment with broader defense objectives.

How does the cost-plus-fixed-fee (CPFF) structure impact the potential cost to taxpayers for this contract?

The Cost-Plus-Fixed-Fee (CPFF) contract structure means the contractor, L3Harris Technologies, is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost to the government can vary significantly depending on the actual costs incurred by the contractor. This structure is often used when the scope of work is not well-defined or involves significant uncertainty, such as in research and development. For taxpayers, the risk with CPFF contracts is that if the contractor's costs are higher than anticipated (due to inefficiencies, unforeseen challenges, or scope creep), the total expenditure will increase, even though the contractor's profit margin (the fixed fee) remains constant. Robust government oversight and stringent cost controls are crucial to mitigate potential cost overruns and ensure value for money under a CPFF arrangement.

What are the implications of awarding this contract on a sole-source basis?

Awarding the 'INTERGRATED PLANE- PHASE 1' contract on a sole-source basis ('NOT COMPETED') means that the Department of Defense did not solicit bids from multiple potential suppliers. This significantly limits the government's ability to leverage competition to achieve the best possible price and terms. Sole-source awards are typically justified when only one contractor possesses the necessary unique capabilities, technology, or when there are urgent and compelling reasons that preclude full and open competition. For taxpayers, this generally means a higher likelihood of paying a premium, as the absence of competing offers removes the downward pressure on price that competition provides. It also raises questions about whether alternative solutions or contractors might have offered better value if they had been considered.

What is L3Harris Technologies' track record in aircraft manufacturing and with similar DoD contracts?

L3Harris Technologies is a major aerospace and defense contractor with a substantial track record in various aspects of aircraft manufacturing, systems integration, and technology development. The company has a history of performing complex defense contracts for the Department of Defense and other government agencies. While specific details on their performance for 'INTERGRATED PLANE- PHASE 1' are not available, their general profile suggests they possess the technical expertise and manufacturing capacity required for such projects. However, the performance on any given contract can vary, and a comprehensive assessment would require reviewing past performance evaluations, contract modifications, and any disputes or claims associated with their previous DoD work.

How does this $37 million contract compare to overall DoD spending in aircraft manufacturing?

The $37 million awarded for 'INTERGRATED PLANE- PHASE 1' represents a relatively modest portion of the Department of Defense's overall budget for aircraft manufacturing and related activities. DoD's annual spending on aircraft procurement, research, development, and sustainment typically runs into the tens of billions of dollars. For example, major aircraft programs like the F-35, B-21 bomber, or various helicopter fleets involve investments far exceeding this single contract. Therefore, while significant for the specific project and the contractor, this $37 million award is a small component within the vast landscape of DoD's aviation-related expenditures. Its importance lies more in its specific technological or strategic contribution rather than its sheer dollar amount relative to the total defense budget.

What are the potential risks associated with the long duration (1038 days) of this contract?

A contract duration of 1038 days (approximately 2.8 years) for 'INTERGRATED PLANE- PHASE 1' introduces several potential risks. Firstly, the longer the contract period, the greater the chance of scope changes, evolving technological requirements, or shifts in strategic priorities, which could necessitate costly modifications or lead to inefficiencies if the project scope becomes misaligned with current needs. Secondly, extended durations increase the exposure to economic fluctuations, such as inflation or changes in material costs, which can impact the final cost, especially under certain pricing structures. Thirdly, maintaining consistent oversight and ensuring contractor performance remain high over such an extended period requires sustained effort and resources from the contracting agency. Finally, for a sole-source contract, a long duration without clear interim milestones or performance reviews could allow potential issues to persist unnoticed for longer.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0016411RJQ93

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 10001 JACK FINNEY BLVD, GREENVILLE, TX, 75402

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $37,207,511

Exercised Options: $37,207,511

Current Obligation: $36,972,987

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $1,248,156

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline