DoD awards $69.7M sole-source radio contract to L3Harris for Bulgaria, citing international agreement

Contract Overview

Contract Amount: $69,735,056 ($69.7M)

Contractor: L3harris Global Communications, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-23

End Date: 2028-12-31

Contract Duration: 1,622 days

Daily Burn Rate: $43.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COUNTRY DIRECTED, SOLE SOURCE ACQUISITION OF RADIOS, ACCESSORIES, AND SERVICES FOR THE COUNTRY OF BULGARIA. THIS CONTRACT IS AWARDED IN ACCORDANCE WITH FAR 6.302-4 - INTERNATIONAL AGREEMENT.

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14623

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $69.7 million to L3HARRIS GLOBAL COMMUNICATIONS, INC. for work described as: COUNTRY DIRECTED, SOLE SOURCE ACQUISITION OF RADIOS, ACCESSORIES, AND SERVICES FOR THE COUNTRY OF BULGARIA. THIS CONTRACT IS AWARDED IN ACCORDANCE WITH FAR 6.302-4 - INTERNATIONAL AGREEMENT. Key points: 1. Sole-source award raises questions about competition and potential for better pricing. 2. Contract duration of over 4 years suggests a long-term need for these communication systems. 3. Award to L3Harris Global Communications, Inc. indicates a reliance on established providers for specialized equipment. 4. The 'Other Communications Equipment Manufacturing' NAICS code points to a specific, potentially niche, market segment. 5. Geographic focus on Bulgaria highlights international defense cooperation and support. 6. Firm Fixed Price contract type offers cost certainty for the government, but may limit flexibility.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without comparable bids. The firm fixed-price nature provides cost certainty, but the absence of competition means the government did not benefit from potential price reductions that competitive bidding might have yielded. The total contract value of $69.7 million over approximately 4.5 years suggests a significant investment, and without market comparisons, it's difficult to definitively assess if this represents excellent value for money. Further analysis would require understanding the specific technical requirements and the market landscape for these specialized radios.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, citing FAR 6.302-4, which pertains to international agreements. This means that the acquisition was not openly competed. The justification for sole-source procurement, particularly under an international agreement, suggests that specific circumstances or requirements necessitated direct negotiation with a single provider, likely L3Harris Global Communications, Inc. The lack of competition means there were no other bidders, and therefore, no direct price discovery through a bidding process.

Taxpayer Impact: Taxpayers may not have received the most competitive pricing due to the absence of a bidding process. The justification for sole-sourcing needs to be robust to ensure public funds are used efficiently.

Public Impact

US military forces operating in or supporting operations in Bulgaria will benefit from enhanced communication capabilities. The contract delivers essential radio equipment and services, crucial for command and control in deployed environments. Geographic impact is concentrated in Bulgaria, supporting allied interoperability and security cooperation. Workforce implications are likely within L3Harris Global Communications, Inc. and potentially its subcontractors, supporting jobs in communications equipment manufacturing and services.

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 sole-source justification could obscure potential alternatives or better value propositions.
Long contract duration may lock the government into specific technology, potentially hindering future upgrades or interoperability with newer systems.

Positive Signals

Firm fixed-price contract provides budget certainty for the Department of Defense.
Award to an established provider like L3Harris suggests a focus on reliability and proven technology for critical communication needs.
International agreement basis indicates strong diplomatic and defense ties with Bulgaria.

Sector Analysis

The 'Other Communications Equipment Manufacturing' sector (NAICS 334290) encompasses a range of communication devices beyond standard telephony and radio/television broadcasting. This contract likely falls into a specialized niche within this sector, focusing on ruggedized, secure, or military-grade communication systems. The global market for defense communication systems is substantial, driven by ongoing geopolitical needs and technological advancements. This contract represents a specific instance of federal spending within this broader industry, supporting a key defense contractor's role in international security cooperation.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, there is no explicit mention of subcontracting plans for small businesses within the provided data. This suggests that the primary awardee, L3Harris Global Communications, Inc., will likely fulfill the majority of the contract requirements internally. Consequently, the direct impact on the small business ecosystem for this specific contract is likely minimal, though L3Harris may engage small businesses indirectly through its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, as the servicing agency, and the Department of Defense more broadly. Given it's a firm fixed-price contract, oversight would focus on delivery schedules, quality of goods and services, and adherence to contract terms. Transparency regarding the sole-source justification and the specific international agreement underpinning it would be crucial for accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Foreign Military Sales (FMS)
NATO Communications and Information Systems
Department of Defense Global Communications Infrastructure
Tactical Radio Systems Procurement

Risk Flags

Sole-source justification requires thorough review.
Potential for uncompetitive pricing.
Long-term vendor dependency.
Limited transparency in award process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.7 million to L3HARRIS GLOBAL COMMUNICATIONS, INC.. COUNTRY DIRECTED, SOLE SOURCE ACQUISITION OF RADIOS, ACCESSORIES, AND SERVICES FOR THE COUNTRY OF BULGARIA. THIS CONTRACT IS AWARDED IN ACCORDANCE WITH FAR 6.302-4 - INTERNATIONAL AGREEMENT.

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 $69.7 million.

What is the period of performance?

Start: 2024-07-23. End: 2028-12-31.

What is the specific international agreement that justified this sole-source award?

The provided data indicates the award is made in accordance with FAR 6.302-4 - International Agreement. However, the specific details of this international agreement are not included in the abbreviated data. Typically, such agreements involve mutual defense cooperation, interoperability initiatives, or specific security assistance programs between the United States and Bulgaria. To fully understand the justification, one would need to access the full contract file and review the referenced international agreement, which would detail the scope, objectives, and the necessity for procuring these specific communication systems from L3Harris Global Communications, Inc. under its terms.

How does the pricing of this contract compare to similar sole-source acquisitions for communication equipment?

Direct price comparison for this sole-source contract is inherently difficult due to the lack of competitive bidding. Benchmarking against similar sole-source awards for specialized military communication equipment would require access to a database of such contracts, including their specific technical specifications, quantities, and pricing structures. Without this comparative data, assessing whether the $69.7 million price tag represents fair and reasonable value is speculative. The firm fixed-price nature offers cost certainty, but the absence of competition means potential savings from market forces were not realized. A detailed analysis would involve comparing unit costs, if available, against historical sole-source awards for comparable systems, adjusted for inflation and technological differences.

What are the key risks associated with a sole-source acquisition of this magnitude?

The primary risk associated with a sole-source acquisition of this magnitude ($69.7 million) is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, there is less incentive for the contractor to offer the most cost-effective solution. Another risk is vendor lock-in, where the government becomes dependent on a single supplier for critical equipment and services, potentially limiting future flexibility in technology upgrades or alternative sourcing. Furthermore, the justification for sole-sourcing must be rigorously scrutinized to ensure it is indeed necessary and not a result of poor planning or an unwillingness to explore competitive options. Finally, there's a reputational risk if the sole-source award is perceived as lacking transparency or fairness.

What is L3Harris Global Communications, Inc.'s track record with the Department of Defense for similar communication systems?

L3Harris Global Communications, Inc. (and its predecessor entities) has a significant and established track record of providing communication systems and services to the Department of Defense and other government agencies. They are a major defense contractor known for a wide range of communication, electronic, and cyber solutions. For similar military-grade radio systems, L3Harris has historically been a key supplier, often involved in providing tactical radios, satellite communication systems, and secure communication networks. Their experience typically includes meeting stringent military specifications for ruggedness, security, and interoperability. Reviewing their past performance on similar contracts, including delivery timeliness, quality, and adherence to budget, would provide further context for this specific award.

How does this contract's spending compare to historical federal spending on 'Other Communications Equipment Manufacturing'?

Analyzing this contract's spending ($69.7 million) in the context of historical federal spending on NAICS code 334290 ('Other Communications Equipment Manufacturing') requires access to comprehensive federal procurement data. This specific contract represents a significant, albeit singular, investment within this category. Federal spending in this sector can fluctuate based on defense modernization priorities, international security needs, and technological advancements. Without a broader dataset, it's difficult to definitively state if this contract's value is high or low relative to the historical average or total spending for this NAICS code. However, given the sole-source nature and focus on international support, it likely represents a specialized segment of the overall spending within this manufacturing category.

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: $69,735,056

Exercised Options: $69,735,056

Current Obligation: $69,735,056

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB21D5003

IDV Type: IDC

Timeline