DoD's $133.7M SATCOM Operations Contract Awarded to L3Harris Technologies Amidst Full and Open Competition

Contract Overview

Contract Amount: $133,722,095 ($133.7M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-11-28

End Date: 2019-01-31

Contract Duration: 2,621 days

Daily Burn Rate: $51.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: WIDEBAND SATELLITE COMMUNICATIONS (SATCOM) OPERATIONS AND TECHNICAL SUPPORT (WSOTS) AWARD

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $133.7 million to L3HARRIS TECHNOLOGIES, INC. for work described as: WIDEBAND SATELLITE COMMUNICATIONS (SATCOM) OPERATIONS AND TECHNICAL SUPPORT (WSOTS) AWARD Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is a Definitive Contract, indicating a long-term agreement for services. 3. L3Harris Technologies, a significant player in defense contracting, secured this award. 4. The contract duration of over 2600 days highlights a substantial, long-term commitment. 5. The 'All Other Telecommunications' NAICS code suggests a broad scope of services within the telecommunications sector. 6. The Cost Plus Fixed Fee (CPFF) contract type may present cost control challenges if not managed diligently. 7. The absence of small business set-aside indicates a focus on large prime contractors for this specific requirement.

Value Assessment

Rating: fair

Benchmarking the value of this $133.7 million contract requires detailed cost breakdowns and comparison to similar SATCOM operations and technical support contracts. The Cost Plus Fixed Fee (CPFF) structure, while allowing for flexibility, can sometimes lead to higher costs if the fixed fee is not carefully calibrated against the anticipated effort and risk. Without specific performance metrics or detailed cost data, it's challenging to definitively assess value for money. However, the competitive award process suggests an attempt to secure reasonable pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this requirement. While three bidders is better than a sole-source award, a higher number of competitors could potentially drive prices down further and foster greater innovation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple companies to vie for the contract, which can lead to more competitive pricing and better service offerings.

Public Impact

Provides essential Wideband Satellite Communications (SATCOM) operations and technical support to the Department of Defense. Ensures the continuity and reliability of critical communication networks for military operations. Supports the Department of the Army's mission by providing robust telecommunications infrastructure. Likely impacts military personnel and units relying on secure and continuous satellite communications. The services delivered are crucial for command and control, intelligence gathering, and logistical support across various theaters of operation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not closely monitored.
Long contract duration (over 7 years) may lead to vendor lock-in and reduced agility in adopting new technologies.
Reliance on a single prime contractor for critical SATCOM operations could pose a risk if performance degrades.
The specific scope of 'technical support' is broad and may require detailed oversight to ensure all requirements are met efficiently.

Positive Signals

Awarded through full and open competition, indicating a competitive process aimed at achieving best value.
L3Harris Technologies is an established defense contractor with a track record in complex systems and communications.
The Definitive Contract structure provides stability for essential, long-term communication services.
The contract supports critical national defense missions, ensuring vital communication capabilities.

Sector Analysis

The telecommunications sector, particularly satellite communications (SATCOM), is a vital component of modern defense infrastructure. This contract falls under the 'All Other Telecommunications' NAICS code, indicating a broad range of services beyond standard voice or data transmission. The market for defense SATCOM is characterized by high barriers to entry due to technological complexity, security requirements, and significant capital investment. Spending in this area is driven by the need for secure, global connectivity for military operations, intelligence, and command and control. Comparable spending benchmarks would involve analyzing other large-scale SATCOM support contracts awarded by the DoD and other government agencies.

Small Business Impact

This contract was not awarded as a small business set-aside, and the data indicates no explicit small business participation (sb: false). This suggests that the prime contract was awarded to a large business, L3Harris Technologies. While there is no direct indication of subcontracting plans for small businesses within the provided data, large defense contracts often include subcontracting goals. The absence of a set-aside means that opportunities for small businesses would likely be through subcontracting with the prime contractor, rather than direct prime contract awards for this specific requirement.

Oversight & Accountability

Oversight for this Definitive Contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial oversight to ensure costs are reasonable and allocable, and that the fixed fee is earned. Transparency would be enhanced through regular reporting requirements stipulated in the contract. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Wideband Satellite Communications (SATCOM) Services
Defense Telecommunications Infrastructure
Military Communication Networks
Department of Defense IT Services
Satellite Operations Support

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration may limit flexibility in adopting new technologies.
Potential for vendor lock-in due to the extended commitment.
Broad scope of 'technical support' necessitates clear performance metrics and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $133.7 million to L3HARRIS TECHNOLOGIES, INC.. WIDEBAND SATELLITE COMMUNICATIONS (SATCOM) OPERATIONS AND TECHNICAL SUPPORT (WSOTS) AWARD

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 $133.7 million.

What is the period of performance?

Start: 2011-11-28. End: 2019-01-31.

What is L3Harris Technologies' track record with similar large-scale telecommunications and SATCOM contracts for the Department of Defense?

L3Harris Technologies has a significant history of performing large-scale telecommunications and SATCOM contracts for the Department of Defense and other government agencies. They are known for their expertise in areas such as space and airborne systems, secure communications, and electronic warfare. Their portfolio includes numerous awards for satellite operations, ground systems integration, and network support. While specific details on past performance for contracts of this exact scope and value are not provided here, L3Harris's established presence in the defense sector suggests a substantial capacity and experience base. Analyzing their past performance reviews, contract modifications, and any reported issues on similar contracts would provide a more comprehensive understanding of their reliability and effectiveness in delivering complex SATCOM solutions.

How does the $133.7 million total contract value compare to other Wideband SATCOM Operations and Technical Support (WSOTS) awards?

The $133.7 million total contract value for the Wideband SATCOM Operations and Technical Support (WSOTS) award to L3Harris Technologies represents a substantial investment in critical communication infrastructure. To benchmark this value, one would need to compare it against historical awards for similar WSOTS requirements or broader SATCOM operational support contracts issued by the Department of Defense or other military branches. The duration of the contract (over 2600 days) also indicates that the annual spending rate is likely in the range of $15-20 million. Without access to a comprehensive database of comparable SATCOM contracts, it's difficult to definitively state whether this value is high, low, or average. However, given the complexity and strategic importance of SATCOM, such figures are not uncommon for long-term, comprehensive support agreements.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for SATCOM operations?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for SATCOM operations is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides an incentive for the contractor to control costs to maximize their profit margin, it does not offer the same level of cost certainty as fixed-price contracts. If the contractor's costs exceed initial estimates, the government still pays those costs, potentially leading to a higher total expenditure than initially anticipated. Effective oversight, detailed cost tracking, and robust negotiation of the fixed fee are crucial to mitigate these risks and ensure value for money. Scope creep can also be a significant risk, as additional work may increase costs without a corresponding adjustment to the fixed fee if not managed properly.

How does the 'All Other Telecommunications' NAICS code (517919) define the scope of services for this contract?

The North American Industry Classification System (NAICS) code 517919, 'All Other Telecommunications,' is a broad category encompassing establishments primarily engaged in providing telecommunications services not elsewhere classified. For this specific contract, it suggests that the scope of Wideband Satellite Communications (SATCOM) Operations and Technical Support extends beyond basic satellite bandwidth provision. This could include a wide array of services such as network management, system integration, technical support for ground and space segments, cybersecurity for communication networks, spectrum management, and potentially the operation and maintenance of related infrastructure. The 'all other' designation implies a comprehensive, multifaceted support role that integrates various telecommunications technologies and services to ensure the effective functioning of the DoD's SATCOM capabilities.

What are the implications of awarding a long-term (2621 days) definitive contract for SATCOM services?

Awarding a long-term definitive contract, such as this 2621-day (approximately 7.18 years) agreement for SATCOM services, provides significant benefits in terms of stability and predictability for both the government and the contractor. For the government, it ensures the continuous availability of critical SATCOM capabilities over an extended period, reducing the administrative burden and potential disruption associated with frequent re-competition. It allows for deeper integration of services and potentially better pricing through economies of scale. For the contractor, it offers a stable revenue stream and the opportunity to make long-term investments in personnel, technology, and infrastructure. However, a long duration also carries risks, including potential vendor lock-in, reduced flexibility to adapt to rapidly evolving technologies, and the possibility that the government may overpay if market conditions or technological needs change significantly over the contract's life. Robust contract management and potential for contract modifications are key to mitigating these long-term risks.

Industry Classification

NAICS: Information › Other Telecommunications › All Other Telecommunications

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9126011R0003

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 1330 INVERNESS DR, COLORADO SPRINGS, CO, 80910

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: $155,979,662

Exercised Options: $155,979,662

Current Obligation: $133,722,095

Actual Outlays: $80,017

Subaward Activity

Number of Subawards: 110

Total Subaward Amount: $47,713,700

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline