DoD awards $47.7M for MUM HARDWARE KITS to L3 TECHNOLOGIES, INC. under a sole-source contract

Contract Overview

Contract Amount: $47,659,631 ($47.7M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-11-02

End Date: 2025-09-30

Contract Duration: 5,446 days

Daily Burn Rate: $8.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MUM HARDWARE KITS

Place of Performance

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

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $47.7 million to L3 TECHNOLOGIES, INC. for work described as: MUM HARDWARE KITS Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The contract duration is extensive, spanning over 15 years, which may not align with rapid technological advancements in the defense sector. 3. Fixed-price contract type suggests cost certainty for the government, but the lack of competition could negate potential savings. 4. The award is for hardware kits, indicating a need for specific components within a larger system, but the exact application is not detailed. 5. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector, suggesting limited supplier options. 6. The contract's significant value and long term warrant close monitoring for performance and potential scope creep.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable contract data. The fixed-price structure provides some cost predictability, but without competitive bidding, it's difficult to ascertain if the government secured the best possible price. The extensive duration of the contract (over 15 years) also raises concerns about whether the pricing remains competitive throughout its lifecycle, especially given potential technological obsolescence or market shifts. Further analysis would require access to detailed cost breakdowns and market research data.

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 only one vendor possesses the necessary capabilities, technology, or proprietary rights to fulfill the requirement. The lack of competition means that the Department of Defense did not benefit from the price discovery and innovation that typically arises from a competitive bidding process. This can potentially lead to higher costs for the government and taxpayers.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to drive down prices, potentially resulting in higher expenditures for taxpayers. It also reduces opportunities for other capable businesses to secure government contracts.

Public Impact

The primary beneficiaries are likely the Department of the Army and potentially other branches of the Department of Defense requiring these specific hardware kits. The contract delivers essential hardware components for unspecified systems, contributing to national defense capabilities. The geographic impact is primarily tied to the contractor's facilities and the operational locations where the hardware kits will be deployed. Workforce implications are concentrated within L3 TECHNOLOGIES, INC. and its supply chain, supporting specialized manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Long contract duration (over 15 years) may lead to price inflexibility and risk of obsolescence.
Lack of transparency regarding the specific use of 'MUM HARDWARE KITS' hinders full performance assessment.
Potential for contractor lock-in due to specialized nature of the hardware.

Positive Signals

Fixed-price contract type offers cost certainty for the government.
Award to an established contractor (L3 TECHNOLOGIES, INC.) may indicate reliability and existing expertise.
The contract supports critical defense needs, contributing to national security.

Sector Analysis

The contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511). This is a specialized segment of the aerospace and defense industry focused on high-technology components. The market for such specialized hardware is often characterized by a limited number of highly capable suppliers, which can sometimes lead to sole-source procurements. Comparable spending in this sector is substantial, driven by ongoing modernization and operational requirements within defense agencies. The value of this contract, while significant, needs to be viewed within the context of the broader defense industrial base and the specific technological demands it addresses.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and there is no explicit mention of subcontracting plans for small businesses. This suggests that the primary award went to a large business, L3 TECHNOLOGIES, INC. Consequently, there may be limited direct opportunities for small businesses to participate in this specific contract, unless they are part of L3 TECHNOLOGIES, INC.'s supply chain. The lack of a small business set-aside could mean missed opportunities to foster small business growth within this specialized defense manufacturing niche.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency regarding specific performance metrics and expenditures may be limited due to the sole-source nature and national security considerations. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Procurement
Aviation Systems Manufacturing
Navigation and Guidance Systems
Defense Hardware Procurement
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Potential for price escalation over time
Risk of technological obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.7 million to L3 TECHNOLOGIES, INC.. MUM HARDWARE KITS

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 $47.7 million.

What is the period of performance?

Start: 2010-11-02. End: 2025-09-30.

What is the specific nature and function of the 'MUM HARDWARE KITS' being procured?

The provided data does not specify the exact nature or function of the 'MUM HARDWARE KITS'. The NAICS code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' suggests these kits are components for systems related to these functions. 'MUM' could potentially stand for 'Manned-Unmanned' or another system designation. Without further details from the contract award documents or associated technical specifications, it is impossible to determine their precise application, such as whether they are for aircraft, ground vehicles, or maritime systems, or what specific role they play in enhancing search, detection, or navigation capabilities.

Why was this contract awarded on a sole-source basis instead of being competed?

The data indicates the contract was awarded as 'NOT COMPETED,' signifying a sole-source procurement. While the specific justification is not provided, common reasons for sole-source awards in defense contracting include the unique capabilities or proprietary technology held by a single contractor, urgent and compelling needs where competition is impractical, or when only one source is capable of meeting the requirement. For L3 TECHNOLOGIES, INC., it's possible they possess exclusive rights to the technology, have a unique manufacturing process, or are the only supplier capable of producing these specific 'MUM HARDWARE KITS' to the required specifications and security standards. A formal Justification for Other Than Full and Open Competition (JOFOC) would typically be required and documented by the agency.

How does the contract's long duration (over 15 years) impact its value and risk profile?

The contract's duration, spanning from November 2, 2010, to September 30, 2025 (approximately 15 years), presents both potential benefits and significant risks. On the positive side, it offers long-term supply chain stability and predictability for the Department of the Army, ensuring the availability of critical hardware. However, such a lengthy period increases the risk of technological obsolescence, as advancements in hardware and systems could render the procured kits outdated before the contract expires. It also introduces price inflexibility; the fixed-price nature may not adequately account for market fluctuations or inflation over such an extended term, potentially leading to the government paying above market rates in later years. Furthermore, the long duration can create contractor lock-in, making it difficult to switch to more cost-effective or technologically superior solutions.

What is the historical spending pattern for 'MUM HARDWARE KITS' or similar items by the Department of Defense?

The provided data only details a single contract award for 'MUM HARDWARE KITS' valued at $47,659,631. It does not offer historical spending data for this specific item or similar categories. To understand historical spending patterns, one would need to analyze procurement databases for the Department of Defense (specifically the Department of the Army) over several fiscal years, searching for the same or related Product Service Codes (PSCs) and NAICS codes. Without this broader context, it's impossible to determine if this $47.7 million award represents an increase, decrease, or consistent level of spending compared to previous periods or similar procurements. Analyzing historical data would reveal trends, identify potential surges or reductions in demand, and provide a baseline for assessing the current contract's financial significance.

What are the potential performance risks associated with this contract, given its sole-source nature and long duration?

The sole-source nature of this contract presents a primary performance risk: a lack of competitive pressure on L3 TECHNOLOGIES, INC. to maintain high quality, innovate, or ensure timely delivery. Without competing vendors, the government has less leverage to enforce stringent performance standards. The long duration (over 15 years) exacerbates this risk. There's a potential for complacency to set in, leading to slower response times or a decline in product quality over the contract's lifecycle. Furthermore, if the 'MUM HARDWARE KITS' are critical components of a larger system, any delays or quality issues from L3 TECHNOLOGIES, INC. could have cascading negative impacts on the operational readiness and effectiveness of that larger system. The government's ability to mitigate these risks relies heavily on robust contract management, clear performance metrics, and strong oversight.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ10R0328

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,659,631

Exercised Options: $47,659,631

Current Obligation: $47,659,631

Subaward Activity

Number of Subawards: 71

Total Subaward Amount: $10,018,319

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline