L3 Technologies awarded $33M for wireless communications equipment, extending contract through 2025

Contract Overview

Contract Amount: $33,031,934 ($33.0M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-21

End Date: 2025-09-22

Contract Duration: 732 days

Daily Burn Rate: $45.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: TO REQUIRED FOR CECOM TO EXERCISE ORDERING PERIOD 2 OF THE BASE IDIQ W56JSR-22-D-0001.

Place of Performance

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

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $33.0 million to L3 TECHNOLOGIES, INC. for work described as: TO REQUIRED FOR CECOM TO EXERCISE ORDERING PERIOD 2 OF THE BASE IDIQ W56JSR-22-D-0001. Key points: 1. Contract value represents a significant investment in critical communications infrastructure. 2. Sole-source award suggests potential limitations in market competition or specialized capabilities. 3. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 4. Contract duration of two years provides a stable period for service delivery. 5. Awarded by the Department of the Army, indicating a focus on defense-related needs. 6. The contract falls within the wireless communications equipment manufacturing sector.

Value Assessment

Rating: fair

The contract value of $33 million over two years for wireless communications equipment is substantial. Without specific benchmarks for similar sole-source contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging. The cost-plus-fixed-fee (CPFF) pricing structure, while allowing for flexibility, carries inherent risks of cost escalation if not rigorously managed. Benchmarking against market rates for comparable equipment and services would be necessary for a more definitive value assessment.

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 approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgent needs preclude a competitive process. The lack of competition means that pricing and terms were negotiated directly with L3 Technologies, Inc., potentially limiting opportunities for price discovery and cost savings that could arise from a competitive bidding environment.

Taxpayer Impact: For taxpayers, a sole-source award means that the government did not benefit from the potential cost reductions and innovation that can be driven by open competition. This could result in a higher overall cost for the acquired goods or services compared to a competitively procured contract.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential wireless communications equipment. This contract supports the operational readiness and communication capabilities of military forces. The services delivered are critical for maintaining secure and reliable communication networks. The geographic impact is likely concentrated around military installations or operational areas where this equipment is deployed. Workforce implications may include specialized technical roles for installation, maintenance, and support of the equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee contract type can lead to cost overruns if not managed effectively.
Lack of transparency in the sole-source justification requires careful review.
Potential for vendor lock-in due to specialized equipment or integration.

Positive Signals

Award to an established contractor (L3 Technologies) suggests a degree of reliability.
Contract duration provides stability for critical communication system needs.
Focus on essential defense communications infrastructure is a positive signal for national security.

Sector Analysis

This contract falls within the broader 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' sector (NAICS 334220). This industry is characterized by rapid technological advancements and significant investment in research and development. The global market for wireless communications equipment is substantial, driven by demand from both commercial and government entities for advanced networking and communication solutions. This specific contract likely represents a component of the Department of Defense's larger strategy to modernize its communication systems, ensuring interoperability and security in a complex threat environment.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The award to L3 Technologies, Inc., a large defense contractor, suggests that the primary focus was on the prime contractor's capabilities. This means that opportunities for small businesses to participate in this specific contract, either as prime contractors or through subcontracting, are likely limited unless L3 Technologies voluntarily engages them.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, the justification and negotiation process would have undergone internal review. The cost-plus-fixed-fee structure necessitates robust financial oversight to ensure costs remain reasonable and the fixed fee is appropriate. Transparency regarding the specific equipment and services procured, as well as performance metrics, would be crucial for effective accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Communications Systems
Army Tactical Communications
Wireless Network Infrastructure
Defense Procurement

Risk Flags

Sole-source award requires careful scrutiny of justification.
Cost-plus-fixed-fee structure necessitates robust cost oversight.
Lack of small business subcontracting requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.0 million to L3 TECHNOLOGIES, INC.. TO REQUIRED FOR CECOM TO EXERCISE ORDERING PERIOD 2 OF THE BASE IDIQ W56JSR-22-D-0001.

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 $33.0 million.

What is the period of performance?

Start: 2023-09-21. End: 2025-09-22.

What is the specific type of wireless communication equipment being procured under this contract, and what are its intended operational uses?

The provided data indicates the contract is for 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' (NAICS 334220). While the specific equipment is not detailed, it is procured by the Department of the Army (CECOM) for ordering period 2 of an IDIQ contract. This suggests the equipment is likely related to tactical communications, command and control systems, or other operational needs for military personnel. The 'UT' (Utah) state code might indicate a specific operational theater or base of deployment. Further details on the specific equipment, such as radios, transceivers, antennas, or network components, would require access to the contract's statement of work or technical specifications.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. Common reasons include the existence of unique or highly specialized technology, proprietary data rights held by a single vendor, or urgent and compelling circumstances where a competitive process would cause unacceptable delays. For this contract, the justification would likely stem from L3 Technologies, Inc. possessing specific technological expertise, existing infrastructure integration, or critical components necessary for the Army's wireless communications requirements that cannot be readily replicated by other vendors within the required timeframe. A formal Justification for Other Than Full and Open Competition (JOFOC) document would contain the detailed rationale.

How does the cost-plus-fixed-fee (CPFF) contract structure compare to other contract types for procuring similar wireless communications equipment, and what are the associated risks?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used when the scope of work is not precisely defined or involves research and development, allowing for flexibility. The government pays the contractor's actual allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government but can be advantageous when technical uncertainties are high. The primary risk with CPFF is the potential for cost overruns, as the contractor is reimbursed for all allowable costs. Effective oversight, detailed cost monitoring, and clear performance metrics are crucial to mitigate this risk and ensure the government receives good value. For standard equipment procurement, fixed-price contracts are generally preferred for better cost control.

What is the historical spending pattern for this specific contract vehicle (W56JSR-22-D-0001) and for similar wireless communications equipment by the Department of the Army?

The provided data indicates this is 'ORDERING PERIOD 2' of a Base IDIQ contract (W56JSR-22-D-0001), suggesting prior orders have been placed under this vehicle. The current award of $33,031,934.20 is for this specific ordering period. To assess historical spending patterns, one would need to examine previous awards made under this IDIQ, including their values, durations, and the contractors involved. Additionally, analyzing broader Department of the Army spending on wireless communications equipment over several fiscal years, using contract databases, would provide context on the scale and frequency of such procurements. This would help determine if this award is consistent with past investments or represents a significant shift.

What are the performance metrics and key performance indicators (KPIs) used to evaluate L3 Technologies, Inc.'s performance under this contract?

The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) for this contract. However, for a contract involving wireless communications equipment, typical KPIs would likely include factors such as equipment reliability (e.g., Mean Time Between Failures - MTBF), operational availability, data transmission rates, signal strength and range, compliance with cybersecurity standards, delivery timelines for equipment and services, and successful integration with existing military networks. The contract's Statement of Work (SOW) and any associated Performance Work Statement (PWS) would detail these requirements and the methods for measuring performance. The fixed fee in the CPFF structure might also be tied to achieving certain performance milestones.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: $56,616,698

Exercised Options: $33,031,934

Current Obligation: $33,031,934

Actual Outlays: $2,171,539

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $321,820

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56JSR22D0001

IDV Type: IDC

Timeline