DoD's $14.2M contract for radio and television broadcasting equipment manufacturing awarded to L3 Technologies, Inc. with no competition

Contract Overview

Contract Amount: $14,202,636 ($14.2M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-08-17

End Date: 2025-10-05

Contract Duration: 1,510 days

Daily Burn Rate: $9.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: REPAIRS

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $14.2 million to L3 TECHNOLOGIES, INC. for work described as: REPAIRS Key points: 1. The contract value of $14.2 million for radio and television broadcasting equipment manufacturing appears to be a significant investment in specialized communication technology. 2. The sole-source award suggests a lack of readily available alternatives or a specific need that only L3 Technologies could fulfill. 3. The contract duration of 1510 days (over 4 years) indicates a long-term requirement for these specialized goods or services. 4. The 'UT' (Utah) state designation for the contract's performance location might point to specific military installations or operational needs within that region. 5. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to cost overruns if not carefully managed, posing a potential risk to value for money. 6. The absence of small business participation noted (sb: false) warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: questionable

Benchmarking the value of this $14.2 million contract is challenging without specific details on the equipment or services provided. However, the Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, carries inherent risks of cost escalation. Without competitive bidding, it's difficult to ascertain if the pricing reflects market rates or represents a fair value for the government. Further analysis would require understanding the specific technical requirements and comparing them to similar procurements for specialized broadcasting equipment.

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. This typically occurs when a specific capability or product is only available from a single source, or in urgent situations. The lack of competition means there was no opportunity for multiple vendors to bid, which can limit price discovery and potentially lead to higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive pressure. The government did not leverage market forces to drive down costs for this acquisition.

Public Impact

The Department of the Army is the primary beneficiary, likely acquiring critical communication equipment for its operations. The contract supports the manufacturing of radio and television broadcasting equipment, essential for military communication and information dissemination. The contract is designated for performance in Utah (UT), suggesting a focus on military bases or operational areas within that state. The contract may have implications for the specialized manufacturing workforce, potentially creating or sustaining jobs in the relevant industry sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
Lack of transparency regarding the specific equipment and its necessity makes value assessment difficult.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Award to an established entity (L3 Technologies, Inc.) may indicate reliability and expertise in specialized manufacturing.
Long contract duration suggests a sustained and critical need for the acquired equipment.
Specific designation for Utah may align with strategic military positioning or operational requirements.

Sector Analysis

The contract falls within the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' sector (NAICS 334220). This is a specialized segment of the manufacturing industry focused on producing equipment for transmitting and receiving audio and visual information. The market for such equipment is driven by technological advancements, defense needs, and commercial broadcasting demands. Federal spending in this area often supports national security communications, public safety systems, and advanced research and development. Comparable spending benchmarks would depend heavily on the specific type and quantity of equipment procured.

Small Business Impact

The data indicates that small business participation was not a stated requirement or outcome for this contract (sb: false). This sole-source award, particularly without a small business set-aside, means that opportunities for small businesses to participate as prime contractors or even significant subcontractors are likely limited. This could represent a missed opportunity to foster small business growth within the defense industrial base, especially in specialized manufacturing sectors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, the justification for the procurement method and the contractor's performance would be subject to internal review. Transparency regarding the specific details of the equipment and the justification for the sole-source award would be key to assessing accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Communications Equipment Procurement
Army Signal Corps Equipment
Wireless Communication Systems Manufacturing
Broadcasting Technology Contracts

Risk Flags

Sole-source award lacks competitive pricing.
CPFF contract type carries risk of cost overruns.
Long duration may lead to technology obsolescence.
No stated small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.2 million to L3 TECHNOLOGIES, INC.. REPAIRS

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 $14.2 million.

What is the period of performance?

Start: 2021-08-17. End: 2025-10-05.

What specific type of radio and television broadcasting equipment is being procured under this contract, and what are its intended military applications?

The provided data identifies the North American Industry Classification System (NAICS) code as 334220, which covers 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing.' However, it does not specify the exact type of equipment. Given the award to L3 Technologies, Inc. by the Department of the Army, the equipment likely pertains to secure military communication systems, potentially including encrypted radios, tactical broadcasting units, or specialized surveillance and signal intelligence equipment. These could be used for command and control, troop communications, intelligence gathering, or disseminating information in operational theaters. Without more detailed contract line item descriptions or technical specifications, the precise nature and application remain speculative but are undoubtedly tied to military operational requirements.

What was the justification for awarding this contract on a sole-source basis to L3 Technologies, Inc.?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For this contract, the justification for awarding to L3 Technologies, Inc. without competition is not detailed in the provided data. Common reasons could include unique proprietary technology held by L3 Technologies, a critical need for interoperability with existing systems that only L3 can meet, or a lack of other qualified manufacturers capable of producing the specific equipment within the required timeframe. A thorough review of the contract file would be necessary to ascertain the official justification provided by the Department of the Army.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost and value for money compared to other contract types?

The Cost Plus Fixed Fee (CPFF) contract type allows the contractor (L3 Technologies, Inc.) to be reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While this structure can be beneficial for acquiring complex or uncertain requirements where cost estimation is difficult, it shifts much of the cost risk to the government. If the contractor's costs exceed initial estimates, the government pays more. The fixed fee, however, provides some incentive for the contractor to control costs, as it does not increase with higher expenses. Compared to fixed-price contracts, CPFF can lead to higher final costs for the government if not managed diligently. Effective oversight and cost controls by the Department of the Army are crucial to ensure value for money under this type of agreement.

What is the historical spending pattern for similar radio and television broadcasting equipment by the Department of Defense or Department of the Army?

Analyzing historical spending patterns for similar equipment requires access to broader federal procurement databases. However, the Department of Defense (DoD) consistently invests significant funds in communication and broadcasting technologies to maintain its global operational capabilities. Spending in this sector can fluctuate based on technological obsolescence, new threats, and strategic modernization initiatives. The Army, in particular, relies heavily on robust communication networks for command and control. Without specific historical data points for NAICS 334220 or comparable equipment categories, it's difficult to benchmark this $14.2 million award. However, it represents a portion of the DoD's overall substantial budget allocated to C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems.

What are the potential risks associated with a long-duration contract (1510 days) for specialized manufacturing, especially under a sole-source award?

Long-duration contracts, like this 1510-day award, for specialized manufacturing carry several potential risks. Firstly, technology can rapidly evolve, meaning the equipment specified at the outset might become outdated or less effective before the contract concludes. Secondly, the extended timeline increases the potential for unforeseen cost increases due to inflation, supply chain disruptions, or changes in material costs. For a sole-source award, these risks are amplified because there's no competitive pressure to drive innovation or cost efficiency throughout the contract's life. The government is locked into the chosen contractor, making it harder to adapt to market changes or secure better terms if new technologies emerge or if the contractor's performance falters.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116

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: $23,279,224

Exercised Options: $14,202,636

Current Obligation: $14,202,636

Actual Outlays: $6,559,416

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56JSR17D0019

IDV Type: IDC

Timeline