DoD's $45M Ukraine delivery order to L3Harris Global Communications raises questions on competition and value

Contract Overview

Contract Amount: $45,029,631 ($45.0M)

Contractor: L3harris Global Communications, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-07-01

End Date: 2021-09-01

Contract Duration: 427 days

Daily Burn Rate: $105.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HARRIS DELIVERY ORDER FOR THE COUNTRY OF UKRAINE

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14623

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $45.0 million to L3HARRIS GLOBAL COMMUNICATIONS, INC. for work described as: HARRIS DELIVERY ORDER FOR THE COUNTRY OF UKRAINE Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Delivery order duration of 427 days suggests a significant, ongoing need for the services. 3. The 'Other Communications Equipment Manufacturing' NAICS code indicates a focus on specialized hardware. 4. Lack of competition raises concerns about whether the government secured the best possible value. 5. The contract's value, while substantial, needs benchmarking against similar sole-source awards for Ukraine support. 6. Performance context is limited due to the sole-source nature and lack of publicly available performance metrics.

Value Assessment

Rating: questionable

The contract's value of approximately $45 million for communication equipment for Ukraine is significant. However, without a competitive bidding process, it is difficult to definitively assess if this represents excellent value for money. Benchmarking against similar sole-source awards for defense articles to Ukraine or comparable communication equipment procurements would be necessary to provide a more precise value assessment. The firm fixed-price contract type offers some cost certainty, but the absence of competition limits the ability to compare pricing against market rates or other potential suppliers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating a sole-source procurement. This means that only one bidder, L3Harris Global Communications, Inc., was solicited. The lack of competition means that the government did not explore options from other potential suppliers, which can limit price discovery and potentially lead to higher costs than if multiple bids were received. The rationale for this sole-source award is not provided in the data.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of benefiting from competitive pricing. The government may have paid a premium due to the absence of competing offers, and the full extent of potential cost savings through competition is lost.

Public Impact

The primary beneficiaries of this contract are the Ukrainian armed forces and government, receiving critical communication equipment. The services delivered involve the provision of specialized communication equipment, essential for military operations and coordination. The geographic impact is focused on Ukraine, supporting its defense efforts during a critical period. Workforce implications are likely within L3Harris Global Communications, Inc., potentially involving manufacturing, logistics, and technical support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value assessment.
Lack of transparency regarding the justification for sole-sourcing.
Potential for higher costs to taxpayers due to absence of competition.
Limited public data on performance metrics and effectiveness of the delivered equipment.

Positive Signals

Award to a known defense contractor (L3Harris) suggests potential for reliable delivery.
Firm fixed-price contract provides cost certainty for the government.
Delivery order supports critical needs for Ukraine, aligning with national security interests.

Sector Analysis

This contract falls within the 'Other Communications Equipment Manufacturing' sector, a niche within the broader defense industrial base. The market for specialized military communication systems is often characterized by high barriers to entry, proprietary technology, and a limited number of qualified suppliers. Government procurements in this sector frequently involve complex specifications and stringent performance requirements. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar communication systems to allied nations or within U.S. defense budgets.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The primary contractor, L3Harris Global Communications, Inc., is a large defense contractor. Any subcontracting opportunities would be at the discretion of L3Harris and are not mandated by this specific award's structure.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations. As a delivery order under a larger contract, its execution is subject to the terms and conditions of the base contract. Accountability measures would involve performance monitoring by the contracting officer and potentially the Defense Contract Management Agency (DCMA). Transparency is limited due to the sole-source nature and the absence of detailed public reporting on performance metrics or the justification for the award.

Related Government Programs

Foreign Military Sales (FMS)
Ukraine Security Assistance Initiative (USAI)
Department of Defense - Other Communications Equipment
L3Harris Global Communications, Inc. - Contracts

Risk Flags

Sole-source award
Lack of competition
Limited performance data available
Potential for non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.0 million to L3HARRIS GLOBAL COMMUNICATIONS, INC.. HARRIS DELIVERY ORDER FOR THE COUNTRY OF UKRAINE

Who is the contractor on this award?

The obligated recipient is L3HARRIS GLOBAL COMMUNICATIONS, 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 $45.0 million.

What is the period of performance?

Start: 2020-07-01. End: 2021-09-01.

What is the specific type of communication equipment being provided to Ukraine under this delivery order?

The National Average Data (NA) code provided is '334290', which corresponds to 'Other Communications Equipment Manufacturing'. This broad category suggests the equipment could range from tactical radios, satellite communication terminals, encrypted devices, or other specialized communication hardware. Without more specific product descriptions or contract line item details, the exact nature of the equipment remains unspecified in the provided data. However, given the context of support for Ukraine, it is likely to be equipment critical for battlefield communication, command and control, or intelligence sharing.

What was the justification for awarding this contract on a sole-source basis?

The provided data explicitly states 'NOT AVAILABLE FOR COMPETITION' (CT: 'NOT AVAILABLE FOR COMPETITION'), indicating a sole-source award. However, the specific justification or rationale for this sole-sourcing is not detailed in the data. Typically, sole-source awards are justified under circumstances such as urgency, unique capabilities of a single provider, or when only one responsible source exists. For defense procurements, especially those supporting active conflict zones like Ukraine, justifications often cite urgent need, interoperability requirements with existing systems, or the unavailability of alternative solutions within the required timeframe. A formal justification document (e.g., a Justification and Approval, J&A) would normally be required and publicly accessible for such awards.

How does the $45 million value compare to other recent U.S. military aid or communication equipment procurements for Ukraine?

Comparing the $45 million value requires context from other U.S. aid packages and procurements for Ukraine. The U.S. has provided billions in security assistance to Ukraine, encompassing a wide range of equipment and services. This $45 million delivery order represents a significant, but not unprecedented, portion of that aid. To benchmark effectively, one would need to analyze other contracts for communication systems, vehicles, or munitions awarded to Ukraine or other allies during similar periods. Sole-source awards, by their nature, often appear higher than competitively bid items, making direct comparisons challenging without understanding the specific equipment, quantities, and urgency involved in other procurements.

What is L3Harris Global Communications, Inc.'s track record with the Department of Defense, particularly in supplying equipment to conflict zones?

L3Harris Technologies (the parent company) is a major defense contractor with a long history of supplying a wide array of products and services to the Department of Defense (DoD), including advanced communication systems, electronic warfare capabilities, and avionics. They have a substantial portfolio of contracts with the DoD, often involving complex and high-value procurements. While specific details on their track record supplying equipment directly to Ukraine under this particular contract are not in the provided data, L3Harris has been a significant player in providing technology and support to U.S. military operations globally, including in environments that could be considered conflict zones or areas of high operational tempo. Their experience suggests a capacity to deliver sophisticated communication solutions.

What are the potential risks associated with a sole-source award of this magnitude for critical equipment?

The primary risk associated with a sole-source award of this magnitude is the potential for inflated pricing and suboptimal value for taxpayers, as competition is absent. There's also a risk that the government might not be aware of or have access to potentially superior or more cost-effective solutions available from other vendors. Furthermore, reliance on a single source can create vulnerabilities if that supplier faces production issues, supply chain disruptions, or geopolitical challenges. For critical equipment destined for a conflict zone like Ukraine, ensuring timely delivery and robust performance is paramount, and a sole-source award, while potentially faster, carries inherent risks regarding best value and long-term strategic sourcing.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W91CRB16R5020

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 1350 JEFFERSON RD, ROCHESTER, NY, 14623

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: $45,029,631

Exercised Options: $45,029,631

Current Obligation: $45,029,631

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB16D5006

IDV Type: IDC

Timeline