DoD awards $25.7M contract to L3 Technologies for satellite communication terminal support, lacking competition
Contract Overview
Contract Amount: $25,689,587 ($25.7M)
Contractor: L3 Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2014-09-09
End Date: 2017-03-31
Contract Duration: 934 days
Daily Burn Rate: $27.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: AWARD AN UNDEFINITIZED CONTRACT TO L3 FOR COMBAT SERVICES SUPPORT VERY SMALL APERTURE TERMINALS TRANSMISSION SYSTEMS SATELLITE COMMUNICATIONS TERMINALS REFURBISH AND NON-WARRANTY PARTS.
Place of Performance
Location: VICTOR, ONTARIO County, NEW YORK, 14564
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $25.7 million to L3 TECHNOLOGIES, INC. for work described as: AWARD AN UNDEFINITIZED CONTRACT TO L3 FOR COMBAT SERVICES SUPPORT VERY SMALL APERTURE TERMINALS TRANSMISSION SYSTEMS SATELLITE COMMUNICATIONS TERMINALS REFURBISH AND NON-WARRANTY PARTS. Key points: 1. Contract awarded to L3 Technologies for combat services support and terminal refurbishment. 2. Significant spending on non-warranty parts and refurbishment for satellite communication systems. 3. Lack of competition raises concerns about price discovery and potential overspending. 4. The contract spans nearly three years, indicating a substantial operational need.
Value Assessment
Rating: questionable
The contract value of $25.7 million for refurbishment and parts is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar services and parts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these services and parts, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. Essential combat services support relies on potentially non-competitive procurement. The long duration of the contract suggests ongoing reliance on these specific services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Non-warranty parts procurement
- High contract value without competitive benchmark
Positive Signals
- Awarded to a known entity (L3 Technologies)
- Supports critical combat services
Sector Analysis
The telecommunications sector, particularly satellite communications, involves complex and often specialized equipment. Spending benchmarks can vary widely based on technology and service level agreements.
Small Business Impact
This contract was awarded to L3 Technologies, Inc., a large business. There is no indication that small businesses were involved in the subcontracting or prime contracting opportunities for this award.
Oversight & Accountability
The non-competed nature of this award warrants further oversight to ensure fair pricing and efficient use of funds. Accountability for the justification of sole-source procurement is crucial.
Related Government Programs
- All Other Telecommunications
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competition
- Potential for inflated pricing
- Reliance on non-warranty parts
- High contract value without clear justification
Tags
all-other-telecommunications, department-of-defense, ny, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.7 million to L3 TECHNOLOGIES, INC.. AWARD AN UNDEFINITIZED CONTRACT TO L3 FOR COMBAT SERVICES SUPPORT VERY SMALL APERTURE TERMINALS TRANSMISSION SYSTEMS SATELLITE COMMUNICATIONS TERMINALS REFURBISH AND NON-WARRANTY PARTS.
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 $25.7 million.
What is the period of performance?
Start: 2014-09-09. End: 2017-03-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without this justification, it's impossible to assess the fairness of the pricing. The government should have conducted a price analysis based on historical data, commercial pricing, or other available benchmarks to ensure the $25.7 million was reasonable.
What is the long-term strategy for maintaining and refurbishing these satellite communication terminals, and will future procurements be competed?
The long-term strategy is unclear from this award alone. Future procurements should ideally be competed to leverage market competition and achieve better value. If specific sustainment capabilities are required, a competitive process should still be used to identify the most cost-effective provider.
How does the cost of non-warranty parts impact the overall cost-effectiveness of this contract compared to alternatives?
Procuring non-warranty parts can be significantly more expensive than using parts covered under warranty or sourced competitively. This practice inflates the contract's total cost. The government should explore options for obtaining parts under warranty or through competitive bidding to reduce overall expenditure.
Industry Classification
NAICS: Information › Other Telecommunications › All Other Telecommunications
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 7640 OMNITECH PL, VICTOR, NY, 14564
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: $25,689,587
Exercised Options: $25,689,587
Current Obligation: $25,689,587
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-09-09
Current End Date: 2017-03-31
Potential End Date: 2017-03-31 12:03:00
Last Modified: 2023-06-30
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