Dod's $32M CDL Depot Repair Establishment Contract Awarded to L3 Technologies, Inc. for Instrument Manufacturing

Contract Overview

Contract Amount: $32,262,796 ($32.3M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-09-25

End Date: 2025-07-31

Contract Duration: 2,866 days

Daily Burn Rate: $11.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CDL DEPOT REPAIR ESTABLISHMENT

Place of Performance

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

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $32.3 million to L3 TECHNOLOGIES, INC. for work described as: CDL DEPOT REPAIR ESTABLISHMENT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of 2866 days suggests a long-term need for services. 3. Instrument manufacturing for measuring and testing electricity and electrical signals is a specialized area. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 5. Awarded by the Department of the Navy, indicating a specific military application. 6. The contract value of $32.26M over its term requires careful performance monitoring.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized scope. The Cost Plus Fixed Fee structure, while allowing for flexibility, carries inherent risks of cost escalation. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for the government. Further analysis would require comparing the specific services and deliverables to similar sole-source procurements within the Department of Defense for instrument manufacturing and repair.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition means that the government did not benefit from a range of proposals and pricing strategies that would typically emerge from a full and open competition, potentially impacting the final price.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government's ability to negotiate the best possible price is diminished in sole-source situations.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other branches of the Department of Defense requiring specialized electrical testing and measurement instruments. The contract delivers essential repair and manufacturing services for critical electronic testing equipment, ensuring operational readiness. The geographic impact is primarily centered around the contractor's facilities, with potential implications for military bases that rely on these instruments. Workforce implications include the employment of skilled technicians and engineers involved in the manufacturing and repair processes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type introduces risk of cost overruns if not closely monitored.
Long contract duration (2866 days) requires sustained oversight to ensure continued value and performance.
Lack of transparency in the sole-source justification process can obscure reasons for non-competition.

Positive Signals

Award to an established entity (L3 TECHNOLOGIES, INC.) suggests potential for reliable service delivery.
Specialized nature of instrument manufacturing indicates a focus on critical defense capabilities.
Contract duration implies a stable, long-term requirement, potentially leading to efficiencies over time.

Sector Analysis

The contract falls within the broader defense industrial base, specifically focusing on the manufacturing and maintenance of specialized electronic test and measurement equipment. This sector is characterized by high technical barriers to entry and often involves long-term relationships between government agencies and specialized contractors. The market size for such niche manufacturing within the defense sector is significant, driven by the constant need for advanced and reliable equipment to support military operations and technological development.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, L3 TECHNOLOGIES, INC., is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this award. This suggests that the primary focus is on the prime contractor's capabilities, and the direct impact on the small business ecosystem through this specific contract may be limited unless L3 TECHNOLOGIES, INC. voluntarily engages small business subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the performance metrics outlined in the Cost Plus Fixed Fee agreement and delivery schedules. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, but day-to-day oversight rests with the contracting agency.

Related Government Programs

Defense Logistics Agency (DLA) Repair and Maintenance Contracts
Naval Sea Systems Command (NAVSEA) Equipment Procurement
Department of Defense Instrument Calibration Services
Military Electronic Systems Manufacturing

Risk Flags

Sole-source award may limit price competition.
Cost Plus Fixed Fee contract type carries risk of cost escalation.
Lack of detailed performance metrics in provided data.
Limited transparency on justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to L3 TECHNOLOGIES, INC.. CDL DEPOT REPAIR ESTABLISHMENT

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 $32.3 million.

What is the period of performance?

Start: 2017-09-25. End: 2025-07-31.

What is the track record of L3 TECHNOLOGIES, INC. in fulfilling similar sole-source contracts for the Department of Defense?

L3 TECHNOLOGIES, INC. (now part of L3Harris Technologies) has a substantial history of contracting with the Department of Defense across various sectors, including aerospace, communications, and electronic systems. While specific data on their track record with sole-source contracts for instrument manufacturing is not detailed here, their overall experience suggests a capacity to handle complex defense requirements. A deeper dive would involve reviewing past performance evaluations, contract modifications, and any reported issues on previous sole-source awards to assess their reliability and adherence to terms. Their extensive portfolio indicates they are a significant player in the defense industrial base, often selected for specialized or sole-source requirements due to unique capabilities or existing system integration.

How does the estimated total value of $32.26 million compare to similar instrument manufacturing and repair contracts within the DoD?

Comparing the $32.26 million value requires context regarding the scope and duration. This contract spans approximately 8 years (2866 days), making the annual value around $4 million. This figure is moderate for specialized defense manufacturing and repair services. Contracts for large-scale system integration or production of complex platforms would be significantly higher. However, for niche instrument manufacturing and depot-level repair, this value could be substantial, especially if it involves proprietary technology or highly specialized labor. Benchmarking against other sole-source awards for similar technical services would be necessary for a precise value-for-money assessment, but it appears within a reasonable range for long-term, specialized support.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for instrument manufacturing?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a profit incentive. If costs escalate beyond initial projections due to unforeseen technical challenges, material price increases, or inefficient management, the government bears the brunt of these increased costs. The contractor's incentive is to control costs to maximize their fee, but the government ultimately pays for the actual costs incurred. Effective oversight, detailed cost tracking, and robust negotiation of the fee are crucial to mitigate these risks and ensure the government receives good value.

What is the strategic importance of the CDL DEPOT REPAIR ESTABLISHMENT to the Department of the Navy?

The CDL DEPOT REPAIR ESTABLISHMENT likely plays a critical role in maintaining the operational readiness and effectiveness of the Department of the Navy's electronic warfare and signal intelligence capabilities. CDL (Common Data Link) systems are vital for transmitting and receiving data between various platforms, including aircraft, ships, and ground stations. Ensuring these systems are repaired and maintained at a depot level by a specialized provider like L3 TECHNOLOGIES, INC. guarantees that critical communication and intelligence gathering functions remain operational. This capability is essential for mission success, situational awareness, and maintaining a technological advantage in complex operational environments.

What are the implications of this contract being awarded as 'NOT COMPETED' for future procurements in this area?

Awarding this contract as 'NOT COMPETED' (sole-source) implies that for this specific requirement, no other vendor was deemed capable or available, or there were specific circumstances (like urgent need or proprietary technology) that precluded competition. This can set a precedent, potentially making it easier to justify sole-source awards for similar future needs if the conditions persist. It also means that potential competitors were not given an opportunity to bid, which could stifle innovation and market competition in the long run. Agencies are generally required to justify sole-source awards, and repeated sole-source awards for similar services can draw scrutiny from oversight bodies.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

Product/Service Code: MAINT/REPAIR SHOP EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833517R0445

Offers Received: 1

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,262,796

Exercised Options: $32,262,796

Current Obligation: $32,262,796

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $2,384,875

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6833515G0002

IDV Type: BOA

Timeline