DoD awards $22.16M task order to L3 Technologies for wireless communications equipment, extending contract through September 2026

Contract Overview

Contract Amount: $22,164,583 ($22.2M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-09-05

End Date: 2026-09-30

Contract Duration: 755 days

Daily Burn Rate: $29.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK ORDER REQUIRED FOR CECOM TO EXERCISE ORDERING PERIOD 3 OF THE BASE IDIQ W56JSR22D0001.

Place of Performance

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

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $22.2 million to L3 TECHNOLOGIES, INC. for work described as: TASK ORDER REQUIRED FOR CECOM TO EXERCISE ORDERING PERIOD 3 OF THE BASE IDIQ W56JSR22D0001. Key points: 1. Contract value represents a significant investment in critical communications infrastructure. 2. The award is a task order under an existing IDIQ contract, indicating a pre-established relationship. 3. The 'NOT COMPETED' status raises questions about potential cost efficiencies and market engagement. 4. The contract duration of over two years suggests a need for sustained support or development. 5. The 'COST PLUS FIXED FEE' pricing structure warrants scrutiny for cost control and contractor incentive alignment. 6. The specific product code (334220) points to specialized manufacturing within the wireless communications sector.

Value Assessment

Rating: fair

The awarded amount of $22.16 million for a task order under an IDIQ contract requires careful benchmarking against similar wireless communications equipment procurements. Without detailed line-item costs or comparison to market rates for specific components, assessing the value for money is challenging. The 'COST PLUS FIXED FEE' structure, while common for complex projects, can sometimes lead to higher overall costs if not managed diligently. Further analysis of the contractor's historical performance and pricing on similar contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This task order was not competed, indicating it was awarded directly to L3 Technologies, Inc. under an existing indefinite-delivery, indefinite-quantity (IDIQ) contract. The rationale for not competing this specific task order is not provided, but it suggests either a sole-source justification or that it falls within the scope of the original IDIQ's competitive award. The lack of competition for this task order limits the government's ability to leverage market forces for potentially better pricing or innovative solutions.

Taxpayer Impact: The absence of competition for this task order means taxpayers may not be benefiting from the most cost-effective pricing that a competitive bidding process could have yielded.

Public Impact

The Department of the Army benefits from the acquisition of essential wireless communications equipment. This contract supports the operational readiness and communication capabilities of the U.S. Army. The services delivered are likely related to the manufacturing, integration, or sustainment of advanced wireless systems. The geographic impact is primarily within the operational theaters and support bases of the U.S. Army. Workforce implications may include specialized manufacturing and technical support roles within L3 Technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for this task order limits price discovery and potential cost savings.
The 'COST PLUS FIXED FEE' contract type requires robust oversight to prevent cost overruns.
The specific nature of the equipment and its criticality could imply limited alternative suppliers.
The duration of the contract (755 days) suggests a long-term commitment that warrants ongoing performance monitoring.

Positive Signals

Award is to an existing IDIQ contract, suggesting a streamlined procurement process.
L3 Technologies, Inc. is likely an established provider with relevant expertise in wireless communications.
The contract supports critical defense communications infrastructure, aligning with national security objectives.

Sector Analysis

The wireless communications equipment manufacturing sector is a vital component of the broader defense industrial base, providing essential hardware for command, control, and communications (C3) systems. This contract falls within the North American Industry Classification System (NAICS) code 334220, which covers establishments primarily engaged in manufacturing radio and television broadcasting and wireless communications equipment. The market is characterized by high technological barriers to entry, significant R&D investment, and a strong reliance on government contracts, particularly for advanced defense applications. Comparable spending benchmarks would involve analyzing other DoD procurements for similar communication systems and equipment.

Small Business Impact

The data indicates that this contract was not competed and does not appear to have a small business set-aside designation (ss: false, sb: false). This suggests that small businesses were not specifically targeted for this particular task order. While the prime contractor, L3 Technologies, Inc., is a large entity, the implications for small businesses would depend on their subcontracting plans, which are not detailed here. Without specific subcontracting goals or awards to small businesses, the direct impact on the small business ecosystem from this specific task order is likely minimal, though L3 Technologies may engage small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a task order under an IDIQ, the original IDIQ contract likely established some baseline oversight mechanisms. The 'COST PLUS FIXED FEE' structure necessitates close monitoring of costs incurred by the contractor to ensure they are reasonable and allocable to the contract. Transparency is typically managed through contract reporting systems, and while specific Inspector General (IG) jurisdiction isn't stated, the DoD IG generally has oversight over defense spending.

Related Government Programs

Command, Control, Communications, Computers, and Intelligence (C4I) Systems
Tactical Communications Equipment
Radio and Television Broadcasting Equipment Manufacturing
Defense Communications Infrastructure

Risk Flags

Sole-source award may limit cost savings.
Cost-plus contract type requires diligent oversight.
Long contract duration increases exposure to market volatility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.2 million to L3 TECHNOLOGIES, INC.. TASK ORDER REQUIRED FOR CECOM TO EXERCISE ORDERING PERIOD 3 OF THE BASE IDIQ W56JSR22D0001.

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 $22.2 million.

What is the period of performance?

Start: 2024-09-05. End: 2026-09-30.

What is the historical spending pattern for L3 Technologies, Inc. with the Department of the Army for similar wireless communications equipment?

Analyzing historical spending data for L3 Technologies, Inc. with the Department of the Army for similar wireless communications equipment is crucial for understanding their track record and pricing trends. While this specific task order is for $22.16 million, examining past awards, including their value, duration, and competitive nature, can reveal patterns. For instance, were previous awards also sole-source or competed? What was the average value of similar task orders? Understanding the frequency and scale of past contracts provides context for the current award. It also helps in assessing whether L3 Technologies has consistently delivered on similar requirements and if their pricing has been competitive over time. Without access to a comprehensive database of past contracts and their performance metrics, a definitive historical analysis is limited, but general trends can be inferred from publicly available contract award data.

How does the 'COST PLUS FIXED FEE' pricing structure for this contract compare to industry benchmarks for similar wireless communications equipment?

The 'COST PLUS FIXED FEE' (CPFF) pricing structure means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. For wireless communications equipment, especially in defense applications, CPFF is often used when the scope of work is not precisely defined or involves significant research and development. Benchmarking this structure requires comparing the fixed fee percentage and the total cost against similar contracts awarded to other vendors or for comparable equipment. Industry benchmarks for the fixed fee in CPFF contracts can range from 5% to 15% of the estimated cost, depending on the complexity, risk, and nature of the work. If the fixed fee on this $22.16 million contract appears significantly higher or lower than typical rates for similar defense electronics manufacturing, it could indicate either exceptional value or potential overpricing. Detailed cost breakdowns and comparisons to market rates for labor, materials, and overhead are necessary for a thorough assessment.

What are the specific risks associated with a 'NOT COMPETED' task order for critical defense communications equipment?

A 'NOT COMPETED' task order for critical defense communications equipment carries several inherent risks. Firstly, the absence of competition means the government may not achieve the best possible price, potentially leading to higher costs for taxpayers. Secondly, it limits the opportunity to explore innovative solutions or technologies that might be offered by other qualified vendors. There's also a risk of complacency from the incumbent contractor, potentially impacting quality or delivery schedules if there's no competitive pressure. Furthermore, without a competitive process, it can be more challenging to objectively assess the contractor's technical capabilities and past performance against a broader market. This lack of a competitive baseline can obscure potential performance issues or cost inefficiencies until they become significant problems. Robust oversight and performance management become even more critical in such scenarios.

What is the expected impact of this contract on the operational effectiveness of the U.S. Army's communication systems?

This contract is expected to have a positive impact on the operational effectiveness of the U.S. Army's communication systems by ensuring the continued availability and potential enhancement of critical wireless communication equipment. The award, valued at over $22 million and extending through September 2026, suggests a need for sustained support, upgrades, or new acquisitions of technology vital for command and control, situational awareness, and data transmission in various operational environments. By securing this equipment, the Army can maintain its communication infrastructure, potentially integrate new capabilities, and ensure interoperability across different units and platforms. The specific nature of the equipment (NAICS 334220) implies it relates to radio and wireless broadcasting, which are fundamental to modern military operations. The successful execution of this task order should contribute to reliable and secure communication lines, thereby bolstering overall mission readiness and effectiveness.

Are there any indications of potential cost overruns or performance issues based on the contract type and duration?

The contract type, 'COST PLUS FIXED FEE' (CPFF), inherently carries a risk of cost overruns if not managed diligently. While the fixed fee provides a ceiling on profit, the reimbursement of actual costs means that if the contractor's expenses exceed initial estimates, the total contract value could increase, although the fee itself remains constant. The duration of 755 days (approximately two years) is substantial and increases the potential for unforeseen cost fluctuations due to market changes, technical challenges, or scope creep. However, the data provided does not offer direct evidence of impending cost overruns or performance issues. The 'NOT COMPETED' status, while raising concerns about initial price discovery, does not automatically imply future performance problems. Robust government oversight, detailed cost tracking, and performance monitoring are essential to mitigate these risks throughout the contract's lifecycle.

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: $22,164,583

Exercised Options: $22,164,583

Current Obligation: $22,164,583

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $219,142

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