DoD awards $151.7M for allied nation supplies via international agreement, bypassing competition

Contract Overview

Contract Amount: $151,756,173 ($151.8M)

Contractor: L3harris Global Communications, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-07-01

End Date: 2027-06-30

Contract Duration: 729 days

Daily Burn Rate: $208.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FOREIGN MILITARY SALES FUNDS TO PURCHASE SUPPLIES FOR AN ALLIED NATION. 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 $151.8 million to L3HARRIS GLOBAL COMMUNICATIONS, INC. for work described as: FOREIGN MILITARY SALES FUNDS TO PURCHASE SUPPLIES FOR AN ALLIED NATION. THIS CONTRACT IS AWARDED IN ACCORDANCE WITH FAR 6.302-4 - INTERNATIONAL AGREEMENT. Key points: 1. Contract leverages international agreement exception to FAR, limiting competitive scrutiny. 2. Significant value suggests critical support for allied military operations. 3. Sole-source nature raises questions about price reasonableness and taxpayer value. 4. Long performance period (729 days) indicates sustained supply chain needs. 5. Focus on communications equipment points to strategic defense support. 6. Awardee has a substantial contract history, suggesting established capabilities.

Value Assessment

Rating: questionable

The contract value of $151.7 million is substantial, but without a competitive process, assessing its value for money is difficult. The pricing cannot be benchmarked against similar contracts or market rates due to the sole-source nature and the specific context of foreign military sales. The lack of competition means there's no direct comparison to gauge if the price is reasonable or if alternative, more cost-effective solutions were overlooked. Further analysis would be needed to understand the cost drivers and justify the expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under FAR 6.302-4, citing an international agreement, which allows for a sole-source procurement. This means the contract was not competed among multiple vendors. The limited competition significantly impacts price discovery, as there was no opportunity for vendors to bid against each other to offer the best price. This approach is typically used when specific international obligations or agreements necessitate a particular vendor or arrangement.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these supplies. Without a competitive bidding process, there's a risk of overpayment, as the selected contractor did not have to compete on price to win the award.

Public Impact

Allied nation receives critical military supplies, enhancing their operational capabilities. Supports international security cooperation and diplomatic relations. Potential impact on the defense industrial base through sustained orders. Ensures continuity of essential communications equipment for allied forces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potential for cost savings.
Sole-source award raises concerns about fair market price and value for money.
Reliance on international agreements for sole-source justification may mask other procurement issues.

Positive Signals

Awardee is a known entity in defense communications, suggesting reliability.
Contract supports a critical foreign military sales objective, aligning with national security interests.
Long-term nature of the contract provides supply chain stability for allied forces.

Sector Analysis

This contract falls within the 'Other Communications Equipment Manufacturing' sector, a segment of the broader defense industrial base. The market for such equipment is often characterized by high barriers to entry due to technological complexity and specialized manufacturing requirements. Spending in this area is driven by national defense needs, including support for allies through foreign military sales. Comparable spending benchmarks are difficult to establish due to the specialized nature of international agreements and the specific equipment procured.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to L3HARRIS GLOBAL COMMUNICATIONS, INC., a large corporation, suggests that subcontracting opportunities for small businesses may exist but are not mandated by a specific set-aside. The impact on the small business ecosystem would depend on L3Harris's subcontracting strategy, which is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight mechanisms. Given it's a foreign military sale, additional oversight may be provided by the Defense Contract Management Agency (DCMA) and potentially the Defense Security Cooperation Agency (DSCA). Transparency is limited due to the sole-source nature and the international agreement exception. Inspector General jurisdiction would apply to ensure proper use of funds and prevent fraud, waste, and abuse.

Related Government Programs

Foreign Military Sales Program
Defense Communications Systems
International Security Assistance
Allied Nation Support Contracts

Risk Flags

Sole-source justification requires careful scrutiny.
Potential for price non-competitiveness.
Lack of transparency in procurement process.
Dependence on specific international agreement terms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $151.8 million to L3HARRIS GLOBAL COMMUNICATIONS, INC.. FOREIGN MILITARY SALES FUNDS TO PURCHASE SUPPLIES FOR AN ALLIED NATION. 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 $151.8 million.

What is the period of performance?

Start: 2025-07-01. End: 2027-06-30.

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

The provided data indicates the contract is awarded in accordance with FAR 6.302-4, which pertains to 'International agreement'. This regulation allows for other than full and open competition when the head of the agency determines that it is necessary to satisfy the needs of the agency and that the use of procedures other than full and open competition is required by the terms of an international agreement or treaty to which the United States is a party. Without access to the specific international agreement or treaty referenced, the precise justification and scope of this sole-source award remain unclear. Further investigation into the relevant international commitments of the U.S. with the allied nation would be necessary to fully understand the basis for bypassing competitive bidding.

How does the pricing of this contract compare to similar procurements for communications equipment?

Direct comparison of pricing for this $151.7 million contract is challenging due to its sole-source nature and the specific context of foreign military sales under an international agreement. Standard benchmarking against similar commercial or government contracts for communications equipment is not feasible without knowing the exact specifications of the supplies and the terms of the international agreement. The absence of competition means there's no market-driven price discovery. To assess value, one would need to analyze the cost breakdown provided by L3Harris Global Communications, Inc., compare it to internal cost estimates or historical data for similar, though not identical, sales, and consider the strategic importance and urgency of the supplies to the allied nation.

What are the specific types of communications equipment being procured under this contract?

The contract data specifies the North American Industry Classification System (NAICS) code 334290, which covers 'Other Communications Equipment Manufacturing.' This broad category includes equipment such as radio and television broadcasting and wireless communications equipment, telephone apparatus manufacturing, and other miscellaneous communications equipment. However, the precise nature of the supplies for the allied nation is not detailed in the provided summary. Understanding the specific equipment (e.g., encrypted radios, satellite terminals, network infrastructure components) would be crucial for a more granular assessment of the contract's purpose, technological relevance, and potential risks.

What is L3Harris Global Communications, Inc.'s track record with foreign military sales and sole-source contracts?

L3Harris Global Communications, Inc. is a major defense contractor with a significant history of supplying various defense systems, including communications equipment, to the U.S. military and allied nations. Their extensive experience suggests a capability to fulfill large-scale, complex requirements. While specific details on their track record with foreign military sales (FMS) and sole-source contracts under international agreements are not provided here, their established presence in the defense sector implies they have navigated such procurement pathways before. A deeper dive into their contract history would reveal the frequency and scale of similar awards, potentially highlighting any patterns or specific expertise relevant to this type of procurement.

What are the potential risks associated with awarding such a large contract without competition?

The primary risk associated with awarding a $151.7 million contract without competition is the potential for inflated pricing and suboptimal value for money. Without competitive pressure, the contractor may not be incentivized to offer the lowest possible price. Additionally, the lack of competition could mask inefficiencies in the contractor's operations or prevent the government from discovering more innovative or cost-effective solutions available elsewhere in the market. There's also a risk that the specific needs of the allied nation might not be perfectly met if alternative solutions were not explored. Ensuring robust oversight and justification for the sole-source determination is critical to mitigate these risks.

How does this contract align with broader U.S. foreign policy and defense cooperation objectives?

This contract, valued at $151.7 million for supplies to an allied nation via Foreign Military Sales (FMS), directly aligns with U.S. foreign policy objectives of strengthening international partnerships and enhancing the security capabilities of key allies. By providing essential communications equipment, the U.S. supports the operational readiness and effectiveness of the allied military, contributing to regional stability and collective security. Such FMS agreements are a critical tool in diplomatic relations, fostering interoperability and demonstrating U.S. commitment to the security interests of its partners. The sole-source nature, justified by an international agreement, suggests a specific strategic imperative or established relationship driving this particular transaction.

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: $151,756,173

Exercised Options: $151,756,173

Current Obligation: $151,756,173

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB21D5003

IDV Type: IDC

Timeline