DoD awards $19.7M for countermeasure receivers, with limited competition and potential value concerns

Contract Overview

Contract Amount: $19,700,825 ($19.7M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-30

End Date: 2026-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $10.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ALT-161 BAND 4-8 COUNTERMEASURE RECEIVER PRODUCTION UNITS

Place of Performance

Location: AMITYVILLE, SUFFOLK County, NEW YORK, 11701

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $19.7 million to L3HARRIS TECHNOLOGIES, INC. for work described as: ALT-161 BAND 4-8 COUNTERMEASURE RECEIVER PRODUCTION UNITS Key points: 1. Contract awarded on a sole-source basis, raising questions about price competitiveness. 2. Long contract duration of 5 years may not reflect evolving technological needs. 3. No small business set-aside was utilized, potentially limiting broader industry participation. 4. The contract type is Firm Fixed Price, which shifts risk to the contractor. 5. The specific product is a countermeasure receiver, critical for aircraft survivability. 6. The award is a delivery order against an existing contract. 7. The contractor, L3Harris Technologies, Inc., is a major defense supplier.

Value Assessment

Rating: questionable

Benchmarking the value of this $19.7 million contract is challenging due to its sole-source nature and the specific nature of the 'ALT-161 BAND 4-8 COUNTERMEASURE RECEIVER PRODUCTION UNITS'. Without competitive bids, it's difficult to ascertain if the price reflects fair market value. The long duration of the contract (5 years) could also lead to overpayment if technology or market prices shift significantly. Further analysis would require access to historical pricing for similar systems or detailed cost breakdowns from the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the necessary technology, capability, or is the sole provider of a specific item. The lack of competition means taxpayers did not benefit from potential price reductions that could arise from a bidding process. It also limits the opportunity for new or smaller businesses to enter the market for this specific defense system.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the best possible value for its investment.

Public Impact

The primary beneficiaries are Department of Defense aviation units requiring advanced electronic warfare capabilities. The contract delivers critical countermeasure receiver production units essential for aircraft survivability. The geographic impact is primarily within the United States, supporting defense manufacturing and operations. Workforce implications include continued employment for specialized engineers and manufacturing personnel at L3Harris Technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Long contract duration may not align with rapid technological advancements in EW.
Lack of small business participation means missed opportunities for smaller innovative firms.
Limited transparency on pricing due to sole-source nature makes value assessment difficult.

Positive Signals

Contract awarded to an established defense contractor with a track record in EW systems.
Firm Fixed Price contract shifts performance and cost risks to the contractor.
Delivery order against an existing contract suggests some level of pre-negotiated terms and conditions.

Sector Analysis

The defense electronics sector is characterized by high R&D costs, long product cycles, and significant government procurement. Countermeasure systems are a vital component of electronic warfare (EW), a market segment focused on protecting military platforms from threats. The market is dominated by a few large prime contractors, including L3Harris Technologies, who possess specialized knowledge and security clearances. Spending in this area is driven by the need to maintain technological superiority and protect personnel in increasingly complex threat environments.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, it is unlikely to directly benefit the small business ecosystem unless L3Harris Technologies voluntarily includes them in its supply chain. This represents a missed opportunity to foster innovation and competition among smaller, specialized defense technology firms.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for monitoring performance, costs, and compliance. As a sole-source award, the initial justification and negotiation process would have undergone internal DoD review. Transparency is limited due to the lack of competitive bidding, making public scrutiny of value more challenging. Inspector General investigations could be initiated if performance or cost issues arise.

Related Government Programs

Electronic Warfare Systems
Aircraft Survivability Equipment
Defense Logistics Agency Procurement
L3Harris Technologies Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award limits price competition.
Long contract duration may lead to technology obsolescence.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.7 million to L3HARRIS TECHNOLOGIES, INC.. ALT-161 BAND 4-8 COUNTERMEASURE RECEIVER PRODUCTION UNITS

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $19.7 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-09-30.

What is the historical spending pattern for similar countermeasure receiver systems by the Department of Defense?

Analyzing historical spending for similar countermeasure receiver systems is crucial for assessing the value of the current $19.7 million award. Without specific data on past procurements of the ALT-161 system or comparable models, a direct comparison is difficult. However, the DoD consistently invests billions annually in electronic warfare (EW) and aircraft survivability equipment. Trends often show increasing costs due to technological sophistication and the need to counter evolving threats. If previous systems were acquired through competitive processes, their pricing could serve as a benchmark. The current sole-source award necessitates a deeper dive into the contractor's cost justification to ensure alignment with historical value propositions, considering inflation and technological advancements.

What is L3Harris Technologies' track record with similar sole-source defense contracts?

L3Harris Technologies, Inc. has a significant history of securing defense contracts, including those awarded on a sole-source basis, particularly for specialized systems where they possess unique capabilities or intellectual property. Their track record includes numerous awards across various defense platforms, encompassing electronic warfare, communications, and sensor systems. While sole-source awards are often justified by specific technological requirements or existing system integration, they inherently limit competitive scrutiny. Analyzing L3Harris's past performance on similar sole-source awards, including delivery timeliness, quality, and any cost overruns or disputes, would provide context for assessing the risk and potential value of this current contract. Their established position in the defense industrial base suggests a capacity to deliver, but the absence of competition remains a key factor in evaluating overall value for money.

How does the Firm Fixed Price (FFP) contract type mitigate risks for the government in this sole-source award?

The Firm Fixed Price (FFP) contract type is generally favorable for the government, especially in sole-source situations, as it shifts the majority of cost and performance risk to the contractor, L3Harris Technologies, Inc. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to manage their expenses efficiently and deliver the specified countermeasure receiver units within budget. For the government, this provides cost certainty, protecting against unexpected cost increases that could occur with cost-reimbursement contracts. However, the effectiveness of FFP in a sole-source context is contingent on the initial price negotiation being robust and based on realistic cost estimates, as the government lacks the leverage of competitive bidding to ensure the price is truly optimal.

What are the potential performance risks associated with a 5-year contract for advanced electronic warfare components?

A 5-year contract duration for advanced electronic warfare (EW) components like countermeasure receivers presents several potential performance risks. Firstly, the rapid pace of technological evolution in EW means that systems can become outdated or less effective relatively quickly. A 5-year commitment might lock the DoD into using technology that is surpassed by adversaries or newer innovations before the contract concludes. Secondly, maintaining contractor performance and quality over such an extended period can be challenging, especially if initial production runs encounter unforeseen issues or if key personnel at the contractor's facility change. Lastly, the long duration increases the possibility of supply chain disruptions or obsolescence of critical components needed for production, which could impact delivery schedules and overall system readiness. Robust oversight and clear performance metrics are essential to mitigate these risks.

What is the market size and competitive landscape for countermeasure receiver systems?

The market for countermeasure receiver systems, a subset of the broader electronic warfare (EW) market, is substantial and highly specialized. While precise figures for 'countermeasure receiver production units' are not publicly itemized, the global EW market is valued in the tens of billions of dollars annually and is projected to grow. This sector is characterized by high barriers to entry, including significant R&D investment, complex technological requirements, stringent security clearances, and long qualification processes. The competitive landscape is dominated by a few large, established defense contractors like L3Harris Technologies, BAE Systems, Northrop Grumman, and Raytheon. Smaller, innovative firms may exist but often struggle to break into the prime contracting space for major platforms due to these barriers. The sole-source nature of this specific award reflects this concentrated market structure.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 1500 NEW HORIZONS BLVD, AMITYVILLE, NY, 11701

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: $19,700,825

Exercised Options: $19,700,825

Current Obligation: $19,700,825

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPRWA120D0011

IDV Type: IDC

Timeline