DoD awards $36.3M for satellite modems, with L3 Technologies securing the contract

Contract Overview

Contract Amount: $36,330,500 ($36.3M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-09-20

End Date: 2013-11-15

Contract Duration: 421 days

Daily Burn Rate: $86.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SATELLITE MODEMS.

Place of Performance

Location: VICTOR, ONTARIO County, NEW YORK, 14564

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $36.3 million to L3 TECHNOLOGIES, INC. for work described as: SATELLITE MODEMS. Key points: 1. Contract value represents a significant investment in critical communication hardware. 2. Competition dynamics suggest a potentially competitive bidding environment for this type of equipment. 3. Delivery order structure indicates a need for immediate or phased deployment of modems. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. The award falls within the broader category of defense communications and electronics manufacturing. 6. Geographic location of the contractor (New York) may influence supply chain considerations.

Value Assessment

Rating: good

The contract value of $36.3 million for satellite modems appears reasonable given the nature of defense procurement. Benchmarking against similar contracts for specialized communication equipment is challenging without more specific technical details. However, the firm fixed-price structure suggests an effort to ensure value for money by capping potential cost overruns. The number of bids received (6) also provides some indication of market interest and potential for competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Six bids were received, suggesting a healthy level of interest and competition for this requirement. A competitive process like this generally leads to better price discovery and can result in more favorable terms for the government.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of obtaining the best possible price and quality for the satellite modems, preventing potential overpayment.

Public Impact

The Department of Defense is the primary beneficiary, receiving essential communication equipment. Satellite modems are critical for enabling secure and reliable data transmission in various operational environments. The contract supports the military's ability to maintain command and control, intelligence gathering, and logistical operations. Workforce implications may include specialized manufacturing and technical support roles within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for obsolescence of technology in a rapidly evolving field.
Dependence on a single contractor for a critical component could pose supply chain risks.
Ensuring interoperability with existing and future military communication systems requires careful management.

Positive Signals

Award to a known entity (L3 Technologies) suggests a degree of confidence in their capabilities.
Firm fixed-price contract provides cost certainty for the government.
Competition indicates multiple viable suppliers exist for this technology.

Sector Analysis

The market for satellite communication equipment is a specialized segment within the broader aerospace and defense industry. This contract for satellite modems fits within the wireless communications equipment manufacturing sector. The defense sector is a significant consumer of such technologies, requiring robust and secure solutions for global operations. Comparable spending benchmarks would depend on the specific technical specifications and quantities of modems procured.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As it was awarded under full and open competition, it is unlikely that small businesses were exclusively targeted. However, L3 Technologies, as a large prime contractor, may engage small businesses as subcontractors, contributing to the small business ecosystem indirectly. Further analysis of subcontracting plans would be needed to assess the direct impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering within the agreed-upon cost. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may remain classified.

Related Government Programs

Defense Communications Systems
Satellite Communications
Wireless Communications Equipment
Department of Defense Procurement
Tactical Communications

Risk Flags

Potential for technological obsolescence
Cybersecurity vulnerabilities
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.3 million to L3 TECHNOLOGIES, INC.. SATELLITE MODEMS.

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 Army).

What is the total obligated amount?

The obligated amount is $36.3 million.

What is the period of performance?

Start: 2012-09-20. End: 2013-11-15.

What is the specific technical capability and intended use of these satellite modems within the Department of the Army?

The provided data identifies the item as 'SATELLITE MODEMS' but lacks specific technical details regarding their capabilities, such as data rates, frequency bands, encryption standards, or form factors. The intended use within the Department of the Army could range from tactical battlefield communications to strategic long-haul data transmission, supporting various operational needs like intelligence, surveillance, reconnaissance (ISR), command and control (C2), and logistics. Without further technical specifications, it is difficult to ascertain the precise role these modems play in the Army's communication architecture. Understanding the specific application would allow for a more accurate assessment of the technology's criticality and potential risks associated with its performance and reliability.

How does the awarded price of $36.3 million compare to market rates for similar satellite modems, considering the quantity and specifications?

Benchmarking the $36.3 million award against market rates for similar satellite modems is challenging without knowing the exact quantity and technical specifications of the modems procured. The data indicates a delivery order structure, suggesting a specific quantity was ordered. L3 Technologies is a known defense contractor, implying the modems likely meet stringent military-grade requirements, which typically command a premium over commercial-off-the-shelf (COTS) equipment. The fact that six bids were received suggests some level of market competition, which should have helped in achieving a competitive price. However, without access to the bid details or specific technical data sheets, a precise comparison to market rates is not feasible. The firm fixed-price nature of the contract suggests the government aimed for cost certainty.

What is L3 Technologies' track record with the Department of Defense for similar communication equipment contracts?

L3 Technologies (now part of L3Harris Technologies) has a substantial track record of supplying various communication and electronic systems to the Department of Defense. While this specific award is for satellite modems, the company has historically secured contracts for a wide array of defense-related hardware, including encrypted communication devices, electronic warfare systems, and other specialized electronic equipment. Their experience in delivering complex systems to military clients suggests a familiarity with DoD requirements, quality standards, and procurement processes. A review of historical contract awards would likely reveal numerous instances of successful delivery and performance. However, specific performance metrics for past contracts, such as on-time delivery rates or defect rates for similar equipment, would require deeper data analysis.

What are the potential risks associated with relying on these satellite modems, considering the duration and nature of the contract?

Potential risks associated with this contract include technological obsolescence, as satellite modem technology evolves rapidly. If the modems have a long service life requirement, they could become outdated before their end-of-life. Supply chain disruptions are another risk; reliance on a single source or limited number of suppliers for critical components could impact availability. Furthermore, cybersecurity vulnerabilities are a significant concern for any communication equipment, especially in defense applications. Ensuring robust security protocols and timely patching of any discovered vulnerabilities is crucial. The contract duration (delivery order ending Nov 2013) suggests a relatively short operational window for this specific procurement, but the underlying technology's lifespan is a broader consideration.

How does this spending on satellite modems fit into the broader context of the Department of the Army's overall communication and technology modernization efforts?

This $36.3 million award for satellite modems represents a component of the Department of the Army's larger investment in maintaining and upgrading its communication infrastructure. Satellite communications are vital for ensuring connectivity in remote or contested environments where terrestrial networks may be unavailable or unreliable. This procurement likely supports ongoing operational needs and potentially contributes to the Army's broader goals of enhancing network-centric warfare capabilities, improving situational awareness, and ensuring resilient communication channels. It fits within the context of technology modernization by providing essential hardware that enables data transfer for various command, control, and intelligence systems. The specific timing and quantity would reflect current operational demands and strategic priorities.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc.

Address: 7640 OMNITECH PL, VICTOR, NY, 14564

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $36,330,500

Exercised Options: $36,330,500

Current Obligation: $36,330,500

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0718M

IDV Type: FSS

Timeline