DoD's $45.1M L3Harris contract for ground communications systems saw no competition, raising value concerns
Contract Overview
Contract Amount: $45,115,653 ($45.1M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2015-09-23
End Date: 2018-06-30
Contract Duration: 1,011 days
Daily Burn Rate: $44.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF 81-4088-15 BLOCK 10.2 GROUND COMMUNICATIONS SYSTEMS (GCS), GCS SYSTEM UPGRADES, AND COMMERCIAL END ITEM ANTENNAS
Place of Performance
Location: PALM BAY, BREVARD County, FLORIDA, 32905
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $45.1 million to L3HARRIS TECHNOLOGIES, INC. for work described as: IGF::OT::IGF 81-4088-15 BLOCK 10.2 GROUND COMMUNICATIONS SYSTEMS (GCS), GCS SYSTEM UPGRADES, AND COMMERCIAL END ITEM ANTENNAS Key points: 1. The contract's value, while substantial, lacks competitive benchmarking due to its sole-source nature. 2. Limited competition suggests potential for above-market pricing and reduced innovation incentives. 3. Performance risks are moderate, given the firm-fixed-price structure, but require diligent oversight. 4. This contract supports critical ground communications infrastructure for the Navy. 5. The sector for navigation and guidance systems is characterized by high technical barriers to entry.
Value Assessment
Rating: questionable
The $45.1 million contract awarded to L3Harris Technologies, Inc. for Ground Communications Systems (GCS) upgrades and antennas was not competed. Without a competitive process, it is difficult to benchmark the pricing against market rates or similar contracts. The lack of competition raises questions about whether the government achieved the best possible value for the funds expended. While firm-fixed-price contracts generally offer cost certainty, the absence of competitive bids means there's no direct evidence of cost efficiency in this instance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential vendors. The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. In this case, the specific nature of GCS upgrades and commercial end-item antennas may have led the Department of the Navy to identify L3Harris as the only capable provider. The lack of bidders means there was no price discovery through a competitive bidding process.
Taxpayer Impact: Taxpayers may have paid a premium for these systems due to the absence of competitive pressure to drive down costs. Without competition, there is less assurance that the government secured the most cost-effective solution available.
Public Impact
The primary beneficiaries are the Department of the Navy and its operational forces, who receive upgraded ground communication capabilities. The contract delivers essential system upgrades and commercial end-item antennas for critical communication infrastructure. The geographic impact is primarily within the operational theaters where the Navy deploys these communication systems. Workforce implications are likely concentrated within L3Harris Technologies and its supply chain, supporting specialized manufacturing and technical roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher costs for taxpayers.
- Sole-source awards can reduce incentives for innovation and efficiency.
- Dependence on a single contractor for critical systems poses a potential supply chain risk.
- Contract duration and value could indicate a significant reliance on this specific vendor.
Positive Signals
- Firm-fixed-price contract provides cost certainty for the government.
- L3Harris Technologies is a known entity in defense contracting, suggesting some level of established capability.
- Contract addresses essential communication system upgrades, supporting military readiness.
Sector Analysis
The contract falls within the broader Information Technology and Defense Electronics sectors, specifically focusing on communication systems and navigation instruments. The market for specialized defense communication hardware is often characterized by high research and development costs, stringent performance requirements, and a limited number of qualified suppliers. This can lead to a higher concentration of market share among a few large defense contractors. Comparable spending benchmarks are difficult to establish without competitive data, but investments in communication infrastructure are a consistent priority for defense agencies.
Small Business Impact
This contract does not appear to have involved small business set-asides, as indicated by the 'sb': false flag. The prime contractor, L3Harris Technologies, is a large corporation. There is no explicit information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific prime contract is likely minimal, unless L3Harris actively engages small businesses in its supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The Inspector General's office for the Department of Defense may conduct audits or investigations if specific concerns regarding waste, fraud, or abuse arise. Transparency is limited by the sole-source nature, but contract award details are generally available through federal procurement databases.
Related Government Programs
- Tactical Data Links
- Command and Control Systems
- Satellite Communications
- Electronic Warfare Systems
- Naval Communication Systems
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on value for money
Tags
defense, department-of-defense, department-of-the-navy, l3harris-technologies, ground-communications-systems, definitive-contract, firm-fixed-price, sole-source, communications-systems, navigation-instruments, florida, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.1 million to L3HARRIS TECHNOLOGIES, INC.. IGF::OT::IGF 81-4088-15 BLOCK 10.2 GROUND COMMUNICATIONS SYSTEMS (GCS), GCS SYSTEM UPGRADES, AND COMMERCIAL END ITEM ANTENNAS
Who is the contractor on this award?
The obligated recipient is L3HARRIS 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 $45.1 million.
What is the period of performance?
Start: 2015-09-23. End: 2018-06-30.
What is L3Harris Technologies' track record with the Department of Defense, particularly in ground communications systems?
L3Harris Technologies, Inc. has a significant and long-standing track record as a major defense contractor for the Department of Defense (DoD). The company has been involved in numerous contracts across various domains, including communications, electronic warfare, intelligence, surveillance, and reconnaissance (ISR), and space systems. Specifically concerning ground communications systems (GCS), L3Harris has a history of providing advanced solutions, including radios, networking equipment, and integrated command and control platforms. Their experience often involves developing and upgrading systems that are critical for maintaining situational awareness and operational effectiveness in diverse environments. The DoD frequently awards contracts to L3Harris due to its perceived technical expertise, established manufacturing capabilities, and ability to deliver complex, integrated solutions that meet stringent military specifications. However, like any large contractor, their performance can vary across individual contracts, and scrutiny often focuses on cost-effectiveness and delivery timelines.
How does the $45.1 million value compare to similar GCS upgrade contracts awarded competitively?
Directly comparing the $45.1 million value of this sole-source contract to competitively awarded contracts for similar Ground Communications Systems (GCS) upgrades is challenging without access to detailed, apples-to-apples competitive data. Sole-source awards inherently lack the price discovery mechanism that competition provides, meaning the awarded price may not reflect the lowest achievable cost. Competitively bid contracts often result in lower prices due to vendor rivalry. To perform a robust comparison, one would need to identify contracts with similar scope, technical requirements, system complexity, and duration that were awarded through full and open competition. Analyzing the number of bidders, the range of bids received, and the final negotiated price in those competitive scenarios would provide a benchmark. Given the non-competitive nature of this award, it is plausible that the price could be higher than what might have been achieved in a competitive environment, though specific data is needed for confirmation.
What are the primary risks associated with a sole-source award for critical communication systems?
Sole-source awards for critical communication systems like GCS present several key risks. Firstly, there is the risk of paying a premium price, as the absence of competition removes the downward pressure on costs that multiple bidders would typically exert. This can lead to inefficient use of taxpayer funds. Secondly, there's a potential for reduced innovation; without the need to compete, the contractor may have less incentive to invest in developing more advanced or cost-effective solutions. Thirdly, reliance on a single supplier can create strategic vulnerabilities. If the sole-source contractor experiences production issues, financial instability, or decides to exit a particular market segment, the government could face significant disruptions in its ability to maintain, upgrade, or replace these critical systems. This dependence can also limit the government's flexibility in adopting new technologies or integrating systems from different vendors.
What is the expected performance period and potential for contract modifications or extensions?
The contract had an initial period of performance from September 23, 2015, to June 30, 2018, spanning approximately 1011 days (around 2.7 years). While the provided data indicates these end dates, definitive contracts, especially for complex systems, often include provisions for modifications, change orders, or extensions. These can be issued to address evolving requirements, unforeseen technical challenges, or scope adjustments. The total value of the contract was $45,115,653. Without specific details on modifications issued during its term, it's difficult to ascertain the final expenditure or any extensions beyond the stated end date. However, the nature of GCS upgrades suggests that requirements might change, making modifications a possibility during the contract's lifecycle.
How does this contract fit into the broader context of naval communication modernization efforts?
This contract for Ground Communications Systems (GCS) upgrades and antennas fits into the broader context of naval communication modernization efforts by addressing the need for reliable and advanced communication infrastructure. Modern navies rely heavily on robust, secure, and high-bandwidth communication systems to maintain command and control, share intelligence, and coordinate operations across distributed platforms and geographic locations. Upgrading GCS is essential for ensuring that naval forces can communicate effectively with shore-based commands, other naval assets, joint forces, and coalition partners. This includes enhancing capabilities for data transmission, voice communication, and network connectivity. Such investments are critical for supporting the Navy's transition towards more networked warfare concepts and for maintaining operational superiority in an increasingly complex and contested information environment.
What are the implications of the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code for this contract?
The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' indicates that this contract is for the production or development of specialized equipment within these high-technology fields. This classification suggests that the GCS systems and antennas procured under this contract are likely sophisticated components integral to navigation, situational awareness, and operational guidance for naval assets. Companies operating under this NAICS code typically possess advanced engineering capabilities, adhere to stringent quality control standards, and often work with classified or sensitive technologies. The manufacturing processes involved can be complex, requiring specialized facilities and a highly skilled workforce. This classification also implies a market with significant barriers to entry due to technical expertise and regulatory requirements.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0017315RRS03
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc (UEI: 004203337)
Address: 2400 PALM BAY RD NE, PALM BAY, FL, 32905
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: $45,115,653
Exercised Options: $45,115,653
Current Obligation: $45,115,653
Subaward Activity
Number of Subawards: 24
Total Subaward Amount: $7,330,138
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-09-23
Current End Date: 2018-06-30
Potential End Date: 2018-06-30 00:00:00
Last Modified: 2018-02-01
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