DoD's $32.4M F/A-18 Depot Maintenance Contract Awarded to L3Harris Amidst Competition Concerns

Contract Overview

Contract Amount: $32,377,657 ($32.4M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2018-09-28

End Date: 2022-06-30

Contract Duration: 1,371 days

Daily Burn Rate: $23.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF DEPOT LEVEL MAINTENANCE ALTERNATIVE SOURCE FOR F/A-18 A/B/C/D AND TRANSITION IN COSTS

Place of Performance

Location: WACO, MCLENNAN County, TEXAS, 76705

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $32.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IGF::CT::IGF DEPOT LEVEL MAINTENANCE ALTERNATIVE SOURCE FOR F/A-18 A/B/C/D AND TRANSITION IN COSTS Key points: 1. The contract awarded to L3Harris Technologies Integrated Systems L.P. for F/A-18 depot maintenance represents a significant investment in aircraft sustainment. 2. Competition was limited, with the award following an exclusion of sources, raising questions about price discovery and potential alternatives. 3. The risk profile includes potential cost overruns due to the Cost Plus Fixed Fee (CPFF) contract type and the complexity of depot-level maintenance. 4. This spending falls within the Defense sector, specifically Aircraft Manufacturing, highlighting the critical need for specialized MRO services.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee (CPFF) structure for depot-level maintenance can lead to costs exceeding initial estimates if not managed tightly. Benchmarking against similar F/A-18 maintenance contracts is difficult without detailed cost breakdowns, but the total value suggests a substantial expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that other potential bidders were not considered after an initial phase. This limited competition may have restricted price discovery and potentially led to a higher price than if a broader competition had been pursued.

Taxpayer Impact: Taxpayer funds are utilized for this contract. The limited competition and CPFF structure introduce a risk of inefficient spending, potentially increasing the overall cost to taxpayers for aircraft sustainment.

Public Impact

Ensures continued operational readiness for the F/A-18 A/B/C/D fleet, critical for naval aviation capabilities. Supports specialized jobs in aircraft maintenance and repair within the defense industrial base. Potential for increased costs to taxpayers due to limited competition and contract type.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Cost Plus Fixed Fee contract type
Potential for cost overruns
Exclusion of sources

Positive Signals

Maintains critical aircraft readiness
Supports specialized workforce
Contract awarded to established defense contractor

Sector Analysis

This contract falls under the Defense sector, specifically within Aircraft Manufacturing and Maintenance, Repair, and Overhaul (MRO). Spending benchmarks for depot-level maintenance can vary significantly based on aircraft type, age, and required services, but this $32.4M award is substantial for sustainment.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). The prime contractor, L3Harris Technologies, is a large defense corporation, suggesting that subcontracting opportunities for small businesses may exist but are not explicitly detailed in this award notice.

Oversight & Accountability

Oversight is likely provided by the Defense Contract Management Agency (DCMA), responsible for ensuring contract compliance and performance. The CPFF structure necessitates robust oversight to control costs and prevent waste, fraud, and abuse.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Limited competition may lead to higher costs.
CPFF contract type increases risk of cost overruns.
Exclusion of sources limits potential bidder pool.
Lack of transparency on specific cost drivers.
Potential for contractor to not achieve maximum efficiency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.4 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. IGF::CT::IGF DEPOT LEVEL MAINTENANCE ALTERNATIVE SOURCE FOR F/A-18 A/B/C/D AND TRANSITION IN COSTS

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 $32.4 million.

What is the period of performance?

Start: 2018-09-28. End: 2022-06-30.

What was the rationale for excluding other sources, and were alternative competitive strategies considered before opting for limited competition?

The rationale for excluding sources is not detailed in the provided data. Typically, such exclusions might stem from specific technical requirements, existing contractor capabilities, or previous performance issues with other potential sources. A thorough review would be needed to understand if alternative competitive strategies were explored and why they were deemed unsuitable, impacting the potential for better pricing and innovation.

How will the Cost Plus Fixed Fee structure be managed to mitigate the risk of cost overruns and ensure value for taxpayer money?

Effective management of a CPFF contract requires stringent oversight, detailed cost tracking, and regular performance reviews. The government contracting officer and DCMA must actively monitor expenditures against the fixed fee and the estimated cost ceiling. Implementing performance metrics and incentivizing cost efficiency can help mitigate overruns and ensure the government receives good value, despite the inherent risks of this contract type.

What is the long-term strategy for F/A-18 depot maintenance, and how does this contract align with future fleet sustainment plans?

This contract covers depot maintenance through June 2022. The long-term strategy would involve assessing the remaining service life of the F/A-18 A/B/C/D variants and planning for their eventual retirement or transition to newer platforms. This contract likely addresses immediate sustainment needs, but future contracts will depend on fleet modernization plans, budget allocations, and evolving threat environments.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ALTERNATIVE SOURCES

Solicitation ID: N0001915R0090

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 7500 MAEHR RD, WACO, TX, 76705

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

Financial Breakdown

Contract Ceiling: $32,377,657

Exercised Options: $32,377,657

Current Obligation: $32,377,657

Actual Outlays: $11,023,822

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001916D1003

IDV Type: IDC

Timeline