DoD's $33.5M sole-source L3Harris contract for Iraq communications equipment raises value questions

Contract Overview

Contract Amount: $33,523,993 ($33.5M)

Contractor: L3harris Global Communications, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-06-28

End Date: 2025-03-30

Contract Duration: 1,371 days

Daily Burn Rate: $24.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COUNTRY DIRECTED, SOLE SOURCE PROCUREMENT FOR HARRIS PRODUCTS FOR THE COUNTRY OF IRAQ FMS: IQ-B-UHU, ARP: CE21013.

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14623

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to L3HARRIS GLOBAL COMMUNICATIONS, INC. for work described as: COUNTRY DIRECTED, SOLE SOURCE PROCUREMENT FOR HARRIS PRODUCTS FOR THE COUNTRY OF IRAQ FMS: IQ-B-UHU, ARP: CE21013. Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. Significant duration of over three years suggests a substantial, long-term need for these services. 3. Lack of competition raises concerns about achieving optimal value for taxpayer dollars. 4. The contract is for 'Other Communications Equipment Manufacturing,' a broad category. 5. Delivery order under a larger Foreign Military Sales (FMS) program indicates a specific international requirement. 6. Fixed-price contract type shifts some risk to the contractor but doesn't guarantee best value without competition.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific FMS context. Without competitive bids, it's difficult to ascertain if the $33.5 million represents a fair market price for the communications equipment provided to Iraq. The fixed-price structure offers some cost certainty, but the absence of competition means the government cannot leverage market dynamics to secure potentially lower prices or better terms. Further analysis would require comparing the unit costs of similar equipment procured competitively or through other FMS agreements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific circumstances like foreign military sales where a particular system or supplier is mandated. The lack of competition means there were no other bidders to compare against, and the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government cannot negotiate based on multiple offers. This limits the government's ability to secure the best possible price and value.

Public Impact

The primary beneficiaries are the Iraqi security forces, who will receive critical communications equipment. The contract supports the U.S. government's foreign military sales objectives and security assistance programs. Delivery of communications equipment enhances the operational capabilities of partner nations. The contract has implications for international relations and defense cooperation with Iraq.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Difficulty in benchmarking value without comparable contract data.
Potential for vendor lock-in if this equipment becomes standard for the recipient nation.

Positive Signals

Supports U.S. foreign policy objectives by providing essential security equipment to an ally.
Fixed-price contract provides some cost certainty for the government.
L3Harris is an established provider of defense and communications technology.
Contract is part of a larger, established FMS program.

Sector Analysis

The market for communications equipment manufacturing is diverse, encompassing a wide range of technologies from basic radio systems to complex satellite and network infrastructure. This contract falls under the 'Other Communications Equipment Manufacturing' NAICS code (334290). Global spending in defense communications is substantial, driven by modernization efforts and security needs of nations worldwide. This specific contract, however, is a niche procurement within the broader defense sector, focused on fulfilling a specific foreign military sales requirement rather than a general domestic defense acquisition.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor, L3Harris Global Communications, Inc., is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless L3Harris voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight mechanisms, particularly within the Foreign Military Sales (FMS) program. The FMS process itself involves significant interagency coordination and review. Accountability is managed through contract terms and conditions, including delivery schedules and performance requirements. Transparency is limited due to the sole-source nature of the award, but reporting requirements within the FMS framework may provide some level of visibility.

Related Government Programs

Foreign Military Sales (FMS)
Department of the Army Procurement
Communications Equipment Procurement
International Security Assistance

Risk Flags

Sole-source procurement
Lack of competitive bidding
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to L3HARRIS GLOBAL COMMUNICATIONS, INC.. COUNTRY DIRECTED, SOLE SOURCE PROCUREMENT FOR HARRIS PRODUCTS FOR THE COUNTRY OF IRAQ FMS: IQ-B-UHU, ARP: CE21013.

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 $33.5 million.

What is the period of performance?

Start: 2021-06-28. End: 2025-03-30.

What is the track record of L3Harris Global Communications, Inc. in fulfilling similar sole-source contracts, particularly within FMS programs?

L3Harris Global Communications, Inc. has a significant history of providing defense and communications equipment, often through sole-source or limited-competition contracts, especially within the FMS framework. As a major defense contractor, they are frequently involved in supplying specialized systems to allied nations. Their track record typically involves delivering complex technological solutions. However, the specific performance metrics, past issues, or successes related to similar sole-source FMS contracts for communications equipment would require a deeper dive into contract performance databases and agency reports. Without specific data points on past FMS sole-source awards for comparable equipment, it's difficult to provide a definitive assessment beyond their general standing as a large, established defense supplier.

How does the $33.5 million contract value compare to similar communications equipment procurements for allied nations?

Directly comparing the $33.5 million value is challenging without knowing the exact specifications and quantities of the communications equipment being procured for Iraq. Communications systems can range dramatically in complexity and cost. However, given that this is a sole-source award for a delivery order under an FMS program, the price may not be directly comparable to competitively procured systems. Typically, sole-source awards, especially in FMS, can be at a premium compared to what might be achieved through open competition. To benchmark effectively, one would need to identify comparable FMS cases or competitively awarded contracts for similar types and quantities of communication hardware and software provided to other allied nations over a similar timeframe.

What are the primary risks associated with this sole-source procurement, and how are they mitigated?

The primary risk associated with this sole-source procurement is the potential for inflated pricing due to the lack of competition, leading to suboptimal value for the U.S. taxpayer (who ultimately funds FMS programs). Another risk is vendor lock-in, where the recipient nation becomes dependent on L3Harris for this specific system, potentially increasing future costs. Mitigation strategies often include rigorous internal cost analysis by the procuring agency (Department of the Army), reliance on historical pricing data for similar items, and negotiation of fixed-price terms to cap the government's liability. The FMS program itself has oversight mechanisms, but the inherent nature of sole-source awards limits the effectiveness of competitive price discovery.

What is the expected effectiveness of the delivered communications equipment in enhancing Iraq's security capabilities?

The effectiveness of the delivered communications equipment hinges on several factors beyond the contract itself. These include the suitability of the technology for Iraq's specific operational environment, the training provided to Iraqi personnel on its use and maintenance, and the integration of this new equipment into existing Iraqi security force infrastructure. L3Harris is a reputable provider, suggesting the technology itself is likely sound. However, the ultimate effectiveness is a function of successful implementation, user proficiency, and ongoing support, which fall outside the scope of this procurement contract. The contract's role is to ensure the delivery of the specified hardware and potentially initial setup.

How has federal spending on 'Other Communications Equipment Manufacturing' (NAICS 334290) trended, and how does this contract fit within that trend?

Federal spending on NAICS code 334290, 'Other Communications Equipment Manufacturing,' can fluctuate based on defense modernization priorities, intelligence community needs, and specific international security assistance programs. While a comprehensive trend analysis requires access to historical federal procurement data, contracts within this category often support critical infrastructure and specialized communication needs. This $33.5 million contract represents a specific instance of such spending, directed towards a foreign military sale. It fits within the broader pattern of the U.S. government procuring advanced communication technologies, but its sole-source nature and FMS destination make it a distinct case rather than a typical domestic competitive procurement trend.

What is the significance of this contract being a 'Delivery Order' under a larger FMS program?

This contract being a 'Delivery Order' signifies that it is a specific task or order placed against a pre-existing agreement or contract vehicle, likely an FMS case established between the U.S. government and Iraq. The FMS program facilitates the sale of U.S. defense articles, services, and training to foreign governments. A delivery order means that the broader framework for the sale (including approvals, overall scope, and potentially pricing structures) has already been established. This specific order details the particular equipment being provided, its quantity, and delivery timeline. It streamlines the procurement process for specific items within a larger, approved security cooperation initiative.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

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: $33,523,993

Exercised Options: $33,523,993

Current Obligation: $33,523,993

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB21D5003

IDV Type: IDC

Timeline