DoD Awards $22.4M Sole-Source L3Harris Radios to Slovakia, Raising Competition Concerns

Contract Overview

Contract Amount: $22,433,181 ($22.4M)

Contractor: L3harris Global Communications, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-06-13

End Date: 2025-01-09

Contract Duration: 210 days

Daily Burn Rate: $106.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COUNTRY DIRECTED, SOLE SOURCE PROCUREMENT OF L3HARRIS RADIOS, ACCESSORIES FOR THE COUNTRY OF SLOVAKIA.

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14623

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $22.4 million to L3HARRIS GLOBAL COMMUNICATIONS, INC. for work described as: COUNTRY DIRECTED, SOLE SOURCE PROCUREMENT OF L3HARRIS RADIOS, ACCESSORIES FOR THE COUNTRY OF SLOVAKIA. Key points: 1. Significant sole-source award for critical communication equipment to a single vendor. 2. Lack of competition raises questions about price discovery and potential overpayment. 3. Focus on foreign military sales highlights geopolitical considerations in defense spending. 4. The contract duration of 210 days suggests a need for timely delivery.

Value Assessment

Rating: questionable

The contract's firm fixed price is set at $22.4 million. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar procurements or if it includes a premium due to the sole-source nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This procurement was conducted on a sole-source basis, meaning L3Harris was the only vendor considered. This significantly limits price discovery and prevents the government from benefiting from competitive market forces that could drive down costs.

Taxpayer Impact: Taxpayers may bear a higher cost due to the absence of competition, as the government could not leverage multiple bids to secure the best possible price.

Public Impact

US taxpayers fund critical communication equipment for a foreign ally. The award impacts the global defense supply chain and L3Harris's market position. Potential for increased costs due to lack of competitive bidding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competition
Potential for inflated pricing

Positive Signals

Supports allied nation's defense capabilities
Utilizes established technology from a known vendor

Sector Analysis

This contract falls under the 'Other Communications Equipment Manufacturing' sector. Spending in this area is crucial for national security and international partnerships. Benchmarks for similar sole-source procurements are difficult to establish due to the inherent lack of comparative data.

Small Business Impact

This contract does not appear to involve small businesses, as it is a direct sole-source award to L3Harris Global Communications, Inc. The focus is on a large prime contractor providing specialized equipment.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of Defense's contracting activity requires diligent review to confirm the necessity and justification for avoiding competition.

Related Government Programs

Other Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source justification questionable
Potential for overpricing
Lack of transparency in price discovery
Limited opportunity for small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.4 million to L3HARRIS GLOBAL COMMUNICATIONS, INC.. COUNTRY DIRECTED, SOLE SOURCE PROCUREMENT OF L3HARRIS RADIOS, ACCESSORIES FOR THE COUNTRY OF SLOVAKIA.

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 $22.4 million.

What is the period of performance?

Start: 2024-06-13. End: 2025-01-09.

What is the justification for awarding this contract on a sole-source basis, and has a thorough market research been conducted to confirm no other vendors could meet the requirement?

The justification for sole-source procurement typically involves unique capabilities, urgent needs, or specific compatibility requirements. A comprehensive market research report should detail why alternative vendors were excluded and confirm that L3Harris is the only viable option. Without this documentation, the decision to bypass competition warrants further scrutiny to ensure taxpayer funds are used efficiently.

How does the $22.4 million price compare to similar radio systems procured competitively by the US or allied nations, and what is the potential cost premium associated with this sole-source award?

Benchmarking this $22.4 million award against competitively procured radio systems is challenging without specific technical and quantity details. However, sole-source contracts often carry a price premium ranging from 10% to 30% or more due to the lack of competitive pressure. A detailed cost analysis comparing unit prices, features, and support services would be necessary to quantify the exact premium paid by the government.

What are the long-term implications for interoperability and future procurement if the US continues to rely on sole-source awards for critical communication equipment for allies?

Sole-source awards can lead to vendor lock-in, potentially limiting interoperability with other systems and reducing future negotiation leverage. If the US consistently awards sole-source contracts for specific equipment to allies, it may inadvertently create dependencies on particular manufacturers, hindering the adoption of potentially more advanced or cost-effective solutions in the future.

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: $22,433,181

Exercised Options: $22,433,181

Current Obligation: $22,433,181

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB21D5003

IDV Type: IDC

Timeline