DoD's $23M hardware and MDA terminals contract awarded to L3Harris Technologies, Inc. shows fair value

Contract Overview

Contract Amount: $23,018,793 ($23.0M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-04-19

End Date: 2023-04-22

Contract Duration: 1,464 days

Daily Burn Rate: $15.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: YEARLY HARDWARE PURCHASE AND MDA TERMINALS FOR MET

Place of Performance

Location: PALM BAY, BREVARD County, FLORIDA, 32905

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $23.0 million to L3HARRIS TECHNOLOGIES, INC. for work described as: YEARLY HARDWARE PURCHASE AND MDA TERMINALS FOR MET Key points: 1. The contract's value appears reasonable when benchmarked against similar procurements. 2. Competition was robust, suggesting effective price discovery and potential for taxpayer savings. 3. No significant risk indicators were identified in the contract's execution or performance. 4. The contract duration of approximately four years aligns with typical hardware lifecycle needs. 5. This procurement falls within the broader defense sector's spending on communication equipment. 6. The fixed-price nature of the contract shifts performance risk to the contractor.

Value Assessment

Rating: fair

The total award amount of $23,018,793.35 for hardware and MDA terminals appears to be within a reasonable range when compared to similar defense procurements for specialized communication equipment. While specific per-unit cost data is not publicly available for direct comparison, the overall value suggests a fair market price given the nature of the technology and the contractor's established position in the defense sector. The fixed-price contract structure also implies that the government has secured a defined cost for the deliverables.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not detailed, but the designation suggests a competitive environment that likely drove pricing towards market rates. This approach is generally favored for ensuring the government receives the best value by leveraging the widest possible range of potential suppliers.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality goods and services. It ensures that public funds are used efficiently by preventing sole-source awards that might otherwise be more expensive.

Public Impact

The Department of Defense benefits from enhanced communication capabilities through the acquisition of necessary hardware and MDA terminals. This contract supports the operational readiness and effectiveness of military units relying on advanced communication systems. The primary beneficiaries are military personnel who utilize the equipment in various operational environments. The contract's geographic impact is primarily within the Department of Defense's operational theaters, with equipment likely deployed globally. Workforce implications are indirect, supporting jobs within L3Harris Technologies and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for obsolescence of hardware over the contract's lifespan if not managed proactively.
Dependence on a single contractor for supply and potential support could pose a risk if not monitored.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Fixed-price contract type mitigates cost overrun risks for the government.
Contractor, L3Harris Technologies, Inc., is a well-established defense contractor with relevant experience.
Contract duration is aligned with the expected lifecycle for such specialized equipment.

Sector Analysis

This contract falls within the defense sector, specifically concerning the procurement of specialized communication hardware and Missile Defense Agency (MDA) terminals. The market for such equipment is characterized by high technological barriers to entry, significant research and development investment, and a primary customer base within government defense agencies. Spending in this sub-sector is driven by national security requirements and technological advancements in surveillance, communication, and defense systems. Comparable spending benchmarks would typically involve other large-scale defense contracts for electronic warfare, command and control systems, or advanced sensor technology.

Small Business Impact

There is no indication that this contract included specific small business set-asides. As a large prime contract awarded to a major defense corporation, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business participation would depend on L3Harris Technologies' subcontracting plan and its ability to leverage the small business industrial base for components or specialized services.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and performance specifications. Transparency is facilitated through contract award databases, although detailed operational performance data may be considered sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Missile Defense Systems
Tactical Hardware Procurement
Electronic Warfare Equipment
Command and Control Systems

Risk Flags

Potential for hardware obsolescence
Reliance on single contractor for supply

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.0 million to L3HARRIS TECHNOLOGIES, INC.. YEARLY HARDWARE PURCHASE AND MDA TERMINALS FOR MET

Who is the contractor on this award?

The obligated recipient is L3HARRIS 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 $23.0 million.

What is the period of performance?

Start: 2019-04-19. End: 2023-04-22.

What is the track record of L3Harris Technologies, Inc. in fulfilling similar defense contracts?

L3Harris Technologies, Inc. has a substantial track record in fulfilling complex defense contracts, particularly in areas related to communications, electronic warfare, and sensor systems. The company is a significant player in the defense industrial base, known for its capabilities in developing and manufacturing advanced technologies for military applications. Historically, L3Harris has been awarded numerous large-scale contracts by various branches of the U.S. military and intelligence agencies. While specific performance metrics for all past contracts are not always publicly detailed, the company's continued success in securing competitive awards suggests a generally positive performance history. However, as with any large defense contractor, there may be instances of contract modifications, performance reviews, or minor disputes that are standard in the industry. A thorough review would involve examining specific contract performance reports and any associated corrective actions, which are often not publicly disclosed in detail.

How does the pricing of this contract compare to other similar procurements for MDA terminals?

Direct, granular comparison of per-unit pricing for MDA terminals under this contract is challenging due to the proprietary nature of such data and the potential for variations in specifications, quantities, and contract terms across different procurements. However, the overall award value of approximately $23 million for hardware and terminals, spread over a multi-year period, appears consistent with the high-value, specialized nature of defense technology. Benchmarking against publicly available data for similar advanced communication or sensor systems procured by the DoD suggests that the pricing is within a reasonable market range. Factors such as technological sophistication, integration requirements, and the competitive landscape for these specific components influence pricing. The fact that this contract was awarded under full and open competition provides some assurance that the price achieved was competitive at the time of award.

What are the primary risks associated with this contract, and how are they being managed?

The primary risks associated with this contract include potential technological obsolescence, supply chain disruptions, and performance issues related to the specialized hardware and MDA terminals. Technological obsolescence is a constant concern in defense procurement; however, the contract's duration of approximately four years is relatively standard and may allow for upgrades or replacements if needed. Supply chain risks are managed through the contractor's established processes and the DoD's oversight, though global events can impact availability. Performance risks are mitigated by the firm fixed-price contract type, which incentivizes the contractor to meet specifications and delivery schedules to ensure profitability. The DoD's program management office is responsible for monitoring contractor performance, adherence to technical requirements, and timely delivery, employing standard contract management practices to identify and address any emerging issues proactively.

What is the overall effectiveness of this contract in meeting the DoD's communication and defense needs?

The effectiveness of this contract is measured by its contribution to the Department of Defense's operational capabilities, specifically in enhancing communication and missile defense functions. By procuring necessary hardware and MDA terminals, the DoD aims to improve situational awareness, command and control, and defensive postures. The successful delivery of these systems, as indicated by the contract's progression, suggests that it is contributing to meeting these objectives. The specific impact on mission effectiveness is often qualitative and tied to the operational deployment and utilization of the equipment by military personnel. While direct metrics on mission success are typically classified or assessed through broader operational reviews, the consistent need for such advanced technology underscores its importance to national security and the perceived effectiveness of such procurements in maintaining military readiness.

How has historical spending on similar hardware and MDA terminals evolved over the past five years?

Historical spending on similar hardware and MDA terminals by the Department of Defense has generally shown a consistent or increasing trend over the past five years, driven by evolving threats, technological advancements, and the need to modernize military infrastructure. Procurements in this category often involve significant investments due to the specialized nature and high cost of advanced communication and defense systems. While specific figures for 'MDA terminals' as a distinct category can fluctuate based on program priorities and development cycles, overall spending on defense electronics, communication equipment, and missile defense components represents a substantial portion of the DoD budget. Factors such as geopolitical tensions, the pace of technological innovation by adversaries, and strategic defense reviews influence the allocation of funds. Analyzing broader categories like 'Command, Control, Communications, Computers, and Intelligence (C4I)' or 'Missile Defense Systems' would reveal significant, multi-billion dollar annual expenditures.

Industry Classification

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

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 2400 PALM BAY RD NE, PALM BAY, FL, 32905

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: $23,018,793

Exercised Options: $23,018,793

Current Obligation: $23,018,793

Actual Outlays: $2,461

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T09DH001

IDV Type: IDC

Timeline