DoD's $25.2M sole-source radio acquisition for Uzbekistan raises questions on competition and value

Contract Overview

Contract Amount: $25,189,714 ($25.2M)

Contractor: L3harris Global Communications, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-02-07

End Date: 2026-09-30

Contract Duration: 966 days

Daily Burn Rate: $26.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DIRECTED SOLE SOURCE ACQUISITION OF L3HARRIS GLOBAL COMMUNICATIONS RADIOS, ACCESSORIES, AND SERVICES FOR THE COUNTRY OF UZBEKISTAN. THIS CONTRACT IS AWARDED IN ACCORDANCE WITH FAR 6.302-1(A)(2).

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14623

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $25.2 million to L3HARRIS GLOBAL COMMUNICATIONS, INC. for work described as: DIRECTED SOLE SOURCE ACQUISITION OF L3HARRIS GLOBAL COMMUNICATIONS RADIOS, ACCESSORIES, AND SERVICES FOR THE COUNTRY OF UZBEKISTAN. THIS CONTRACT IS AWARDED IN ACCORDANCE WITH FAR 6.302-1(A)(2). Key points: 1. Acquisition is a directed sole-source award, limiting competitive pricing opportunities. 2. Contract duration of 966 days suggests a significant, long-term need. 3. Focus on specific communication equipment for a foreign country highlights a niche but critical requirement. 4. Lack of competition may lead to higher costs compared to a fully competed scenario. 5. Performance risk is moderate, given the specialized nature of the equipment and the contractor's likely expertise. 6. Sector positioning is within defense communications, a critical but often high-cost area.

Value Assessment

Rating: questionable

The contract's value is difficult to benchmark due to its directed sole-source nature and specific foreign military sales context. Without competitive bids, it's challenging to ascertain if the $25.2 million price represents fair market value for L3Harris Global Communications radios and services. The absence of comparable contract data for similar sole-source foreign military sales makes a precise value-for-money assessment problematic. However, the fixed-price nature of the contract provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This acquisition was a directed sole-source award under FAR 6.302-1(a)(2), indicating that only one responsible source was determined to be capable of meeting the requirement. The justification for this approach is not detailed in the provided data, but it typically implies unique capabilities, compatibility issues, or urgent needs that preclude full and open competition. The lack of bidders means there was no opportunity for price discovery through a competitive bidding process.

Taxpayer Impact: Taxpayers are potentially paying a premium due to the absence of competition. Without multiple bids, the government cannot leverage market forces to secure the most cost-effective solution.

Public Impact

The primary beneficiary is the government of Uzbekistan, which will receive critical communication equipment. The services delivered include the provision of L3Harris Global Communications radios and associated accessories. The geographic impact is concentrated in Uzbekistan, supporting U.S. foreign policy and security objectives. Workforce implications are likely minimal within the U.S., as the primary impact is on the end-user in Uzbekistan.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source acquisition.
Foreign military sales can sometimes involve complex pricing structures and markups.
Dependence on a single contractor for critical communication equipment.

Positive Signals

L3Harris is a known entity in defense communications, suggesting potential for reliable equipment.
Fixed-price contract type offers some cost predictability.
The contract supports U.S. foreign policy and security interests abroad.

Sector Analysis

This contract falls within the defense communications sector, specifically focusing on specialized radio equipment. The market for such equipment is often characterized by high barriers to entry, proprietary technology, and a limited number of qualified suppliers, which can contribute to sole-source procurements. Comparable spending benchmarks are difficult to establish without more specific details on the technology and quantity of radios, but defense communication systems represent a significant portion of the overall defense budget.

Small Business Impact

The provided data indicates that small business participation (sb: false) is not a factor in this contract. There is no indication of small business set-asides or subcontracting requirements. This acquisition does not appear to be structured to benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, with potential involvement from the Defense Contract Management Agency (DCMA). Inspector General jurisdiction would apply to allegations of fraud, waste, or abuse. Transparency is limited by the sole-source nature and the foreign military sales context, making public oversight more challenging.

Related Government Programs

Foreign Military Sales Program
Department of Defense Communications Systems
Tactical Radio Systems
Global Communications Equipment

Risk Flags

Sole-source justification requires scrutiny.
Potential for above-market pricing due to lack of competition.
Foreign military sales can introduce complexities in oversight and cost verification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.2 million to L3HARRIS GLOBAL COMMUNICATIONS, INC.. DIRECTED SOLE SOURCE ACQUISITION OF L3HARRIS GLOBAL COMMUNICATIONS RADIOS, ACCESSORIES, AND SERVICES FOR THE COUNTRY OF UZBEKISTAN. THIS CONTRACT IS AWARDED IN ACCORDANCE WITH FAR 6.302-1(A)(2).

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 $25.2 million.

What is the period of performance?

Start: 2024-02-07. End: 2026-09-30.

What is the specific justification for this acquisition being a directed sole-source award?

The data indicates the award is made in accordance with FAR 6.302-1(a)(2), which generally pertains to the acquisition of property or services that are available only from responsible sources and for which no other form of acquisition is either possible or reasonably expected to be used. For directed sole-source acquisitions, common justifications include unique capabilities, proprietary technology, essential compatibility with existing systems, or urgent and compelling needs where competition is not feasible. Without further details from the contracting agency, the precise reason for L3Harris being the sole source remains unspecified, but it implies a determination that no other vendor could meet the requirement as effectively or efficiently.

How does the pricing of this contract compare to similar defense communication systems procured competitively?

Direct comparison of pricing is challenging due to the sole-source nature of this contract and its specific application for foreign military sales to Uzbekistan. Competitive procurements typically result in lower prices due to market forces and bidder innovation. Without access to L3Harris's pricing structure for this specific radio system in a competitive environment, or data from comparable sole-source foreign military sales of similar equipment, it is difficult to definitively state whether this $25.2 million award represents a fair market price. However, sole-source contracts inherently carry a higher risk of inflated costs compared to those secured through open competition.

What are the key performance risks associated with this contract?

The primary performance risks include potential delays in delivery, equipment malfunctions, or inadequate support services, although these are inherent in any complex equipment acquisition. Given that L3Harris is a specialized provider of communication systems, the risk of technical failure might be mitigated by their expertise. However, the sole-source nature means there is no alternative if L3Harris fails to perform. Risks related to the specific operational environment in Uzbekistan, such as infrastructure compatibility or user training effectiveness, also exist. The fixed-price contract type shifts some cost overrun risk to the contractor but does not eliminate performance risk.

What is the historical spending pattern for L3Harris Global Communications with the Department of Defense?

While the provided data focuses on a single contract, L3Harris Technologies (the parent company of L3Harris Global Communications) is a significant defense contractor. Historical spending patterns with the Department of Defense (DoD) would likely show substantial contract awards across various communication, electronic warfare, and aerospace systems. Analyzing past DoD contracts with L3Harris would reveal trends in contract types (fixed-price, cost-plus), competition levels, and the types of systems procured. A deeper dive into historical data would be necessary to identify specific spending trends, average contract values, and performance history across their portfolio of DoD engagements.

What is the strategic importance of these communication radios for Uzbekistan?

The strategic importance of these communication radios for Uzbekistan likely relates to enhancing national security, border control, internal security operations, and potentially interoperability with allied forces. Reliable and secure communication systems are fundamental for modern military and law enforcement operations. By providing these radios, the U.S. aims to bolster Uzbekistan's capabilities, which can contribute to regional stability and counter-terrorism efforts, aligning with U.S. foreign policy objectives in Central Asia. The specific capabilities of the L3Harris radios would dictate their precise strategic application.

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: $25,189,714

Exercised Options: $25,189,714

Current Obligation: $25,189,714

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB21D5003

IDV Type: IDC

Timeline