DoD's $17.5M Optical Telescope Assembly Contract Awarded to L3 Technologies Without Competition
Contract Overview
Contract Amount: $17,490,889 ($17.5M)
Contractor: L3 Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2009-11-16
End Date: 2013-05-17
Contract Duration: 1,278 days
Daily Burn Rate: $13.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PR 81-2060-09 OPTICAL TELESCOPE ASSEMBLY
Place of Performance
Location: WILMINGTON, MIDDLESEX County, MASSACHUSETTS, 01887
Plain-Language Summary
Department of Defense obligated $17.5 million to L3 TECHNOLOGIES, INC. for work described as: PR 81-2060-09 OPTICAL TELESCOPE ASSEMBLY Key points: 1. Significant investment in specialized defense optics. 2. Lack of competition raises concerns about price discovery. 3. Contract awarded to a single, established provider. 4. Potential for higher costs due to sole-source nature.
Value Assessment
Rating: questionable
The contract value of $17.5M for an Optical Telescope Assembly is difficult to benchmark without specific technical details. However, the sole-source award and cost-plus-fixed-fee structure suggest potential for cost overruns and limited value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to less favorable pricing for the government compared to a competitive process.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, potentially funding higher profit margins or less efficient cost management by the contractor.
Public Impact
Advanced optical technology development for defense applications. Potential impact on military surveillance and reconnaissance capabilities. Investment in a critical, specialized manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Lack of transparency in pricing
Positive Signals
- Awarded to a known entity
- Addresses a specific defense need
Sector Analysis
This contract falls within the Defense sector, specifically focusing on advanced optical instrument manufacturing. Spending in this niche area is typically driven by national security requirements and technological superiority, often involving high R&D costs and specialized expertise.
Small Business Impact
The contract was awarded to L3 Technologies, Inc., a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, limiting opportunities for small business participation.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Oversight would focus on ensuring the contractor meets technical specifications and manages costs within the agreed-upon fee structure, though the sole-source nature limits leverage.
Related Government Programs
- Optical Instrument and Lens Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus-fixed-fee structure shifts cost risk to the government.
- Potential for inflated costs due to lack of competitive pressure.
- Limited transparency on the specific technical requirements and justification for sole-sourcing.
- No indication of small business participation.
Tags
optical-instrument-and-lens-manufacturin, department-of-defense, ma, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.5 million to L3 TECHNOLOGIES, INC.. PR 81-2060-09 OPTICAL TELESCOPE ASSEMBLY
Who is the contractor on this award?
The obligated recipient is L3 TECHNOLOGIES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $17.5 million.
What is the period of performance?
Start: 2009-11-16. End: 2013-05-17.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The provided data indicates a sole-source award, suggesting that competitive bidding was deemed impractical or not feasible. Justification typically involves unique capabilities, urgent needs, or lack of market availability. Without further documentation, it's unclear if alternatives were explored or if the justification was robust enough to warrant bypassing competition.
How does the cost-plus-fixed-fee structure impact the government's ability to control costs and ensure contractor efficiency for this optical telescope assembly?
Cost-plus-fixed-fee (CPFF) contracts reimburse the contractor for allowable costs plus a fixed fee representing profit. While the fee is fixed, the government bears the risk of cost overruns. This structure can incentivize contractors to incur costs to increase the base for future contracts, potentially reducing efficiency and increasing overall expenditure compared to fixed-price contracts.
What are the long-term implications of awarding critical defense technology contracts like this on a sole-source basis for overall market competition and innovation?
Sole-source awards can stifle competition by preventing new entrants or smaller firms from accessing lucrative contracts, potentially leading to market concentration. Over time, this can reduce innovation as established contractors face less pressure to develop cutting-edge technologies or improve cost-effectiveness. It may also lead to higher prices for taxpayers in the long run.
Industry Classification
NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing
Product/Service Code: INSTRUMENTS AND LABORATORY EQPT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0017309RRS06
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 65 JONSPIN RD, WILMINGTON, MA, 01887
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $17,490,889
Exercised Options: $17,490,889
Current Obligation: $17,490,889
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-11-16
Current End Date: 2013-05-17
Potential End Date: 2013-05-17 00:00:00
Last Modified: 2018-04-26
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