DoD's $14.4M Foreign Military Sale for Allied Nation Communications Equipment Lacks Competition

Contract Overview

Contract Amount: $14,419,954 ($14.4M)

Contractor: L3harris Global Communications, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-12-30

End Date: 2027-08-31

Contract Duration: 609 days

Daily Burn Rate: $23.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FOREIGN MILITARY SALES FUNDS TO PURCHASE SUPPLIES AND SERVICES FOR AN ALLIED NATION.

Place of Performance

Location: ROCHESTER, MONROE County, NEW YORK, 14623

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to L3HARRIS GLOBAL COMMUNICATIONS, INC. for work described as: FOREIGN MILITARY SALES FUNDS TO PURCHASE SUPPLIES AND SERVICES FOR AN ALLIED NATION. Key points: 1. Contract awarded via 'Not Available for Competition' (NAC) justification, raising concerns about price discovery and potential overpayment. 2. The contract's value, while significant, needs benchmarking against similar FMS procurements for allied nations to assess value for money. 3. Limited competition increases the risk of suboptimal pricing and reduced incentive for contractor efficiency. 4. The fixed-firm price contract type offers some cost certainty but does not mitigate risks associated with a lack of competitive bidding. 5. The contract duration of 609 days suggests a substantial need for the specified communications equipment. 6. The award to L3Harris Global Communications, Inc. warrants scrutiny of their past performance on similar FMS contracts.

Value Assessment

Rating: questionable

The contract value of $14.4 million for communications equipment under a Foreign Military Sale (FMS) requires careful benchmarking. Without competitive bidding, it is difficult to ascertain if this price represents fair market value. Comparing this award to similar FMS procurements for allied nations, or to domestically procured similar equipment, would be crucial for a robust value assessment. The lack of competition inherently introduces a risk that the price may be higher than what would be achieved in a competitive environment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'Not Available for Competition' (NAC) justification, indicating that a competitive process was not utilized. This typically occurs when only one source is capable of meeting the requirement, or for reasons of national security or urgency. The absence of multiple bidders means there was no direct price comparison or negotiation leverage that a competitive environment would provide, potentially impacting the final price and terms.

Taxpayer Impact: Taxpayers are exposed to a higher risk of paying a premium for this equipment due to the lack of competitive pressure to drive down costs.

Public Impact

The primary beneficiary is an allied nation receiving critical communications supplies and services funded through U.S. Foreign Military Sales. The contract delivers essential communications equipment, likely enhancing the allied nation's defense and security capabilities. The geographic impact is primarily on the allied nation receiving the equipment, with potential indirect benefits to regional stability. Workforce implications are likely concentrated within L3Harris Global Communications, Inc. and its supply chain, supporting jobs in communications equipment manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition increases the risk of inflated pricing and reduced value for taxpayer funds.
The 'Not Available for Competition' justification requires thorough review to ensure it was appropriately applied.
Performance risks are elevated without the market's pressure to ensure efficiency and quality.
Potential for contractor lock-in if future needs are also procured through non-competitive means.

Positive Signals

The fixed-firm price contract type provides a degree of cost certainty for the government.
The award is for essential military supplies, supporting an allied nation's security, which aligns with U.S. foreign policy objectives.
L3Harris Global Communications, Inc. is a known entity in the defense communications sector, suggesting a level of established capability.

Sector Analysis

This contract falls within the broader 'Other Communications Equipment Manufacturing' sector, which is a critical component of the defense industrial base. The market for military communications equipment is often characterized by specialized requirements, long development cycles, and significant government investment. Foreign Military Sales represent a substantial portion of this market, enabling allies to procure U.S. defense articles and services. Benchmarking this contract's value against other FMS procurements or similar domestic defense contracts would provide further context on its economic efficiency.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award, there are no subcontracting implications for small businesses stemming from a competitive set-aside. However, the prime contractor, L3Harris Global Communications, Inc., may engage small businesses in its supply chain, but this is not mandated by the contract's structure.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management offices, specifically within the Department of the Army managing the FMS program. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is limited due to the non-competitive nature of the award; however, contract award data is publicly available through federal procurement databases.

Related Government Programs

Foreign Military Sales Program
Department of Defense Procurement
Communications Equipment Procurement
Allied Nation Support

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency
Sole-Source Justification Scrutiny

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to L3HARRIS GLOBAL COMMUNICATIONS, INC.. FOREIGN MILITARY SALES FUNDS TO PURCHASE SUPPLIES AND SERVICES FOR AN ALLIED NATION.

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 $14.4 million.

What is the period of performance?

Start: 2025-12-30. End: 2027-08-31.

What is the historical spending pattern for L3Harris Global Communications, Inc. on Foreign Military Sales contracts, particularly for communications equipment?

Analyzing L3Harris Global Communications, Inc.'s historical FMS contract data would reveal their track record in delivering similar equipment and services to allied nations. This includes examining the volume and value of past FMS awards, the types of equipment supplied, and the performance outcomes. A review of past contracts could highlight any recurring issues or consistent successes, providing context for the current award's potential risks and benefits. Understanding their experience with FMS, which involves specific regulations and client management, is crucial for assessing their capability and reliability in fulfilling this $14.4 million contract.

How does the $14.4 million contract value compare to similar Foreign Military Sales procurements for communications equipment to allied nations over the past five years?

Benchmarking this $14.4 million contract against similar Foreign Military Sales (FMS) procurements for communications equipment to allied nations over the past five years is essential for assessing value for money. This comparison would involve identifying contracts with comparable equipment types, quantities, and recipient nations. If this contract's unit costs or overall value are significantly higher than comparable awards, it suggests potential overpricing due to the lack of competition. Conversely, if it aligns with or is lower than benchmarks, it might indicate that despite the sole-source nature, the pricing is reasonable, though further investigation into the specific requirements and market conditions would still be warranted.

What specific risks are associated with awarding a contract of this magnitude ($14.4M) on a sole-source basis for military communications equipment?

Awarding a $14.4 million contract for military communications equipment on a sole-source basis introduces several key risks. Primarily, the absence of competition significantly reduces the government's leverage to negotiate the best possible price, potentially leading to cost overruns and reduced value for taxpayer money. There's also an increased risk of accepting suboptimal quality or delivery schedules, as the contractor faces less pressure to innovate or expedite. Furthermore, a sole-source award can foster contractor complacency and may limit opportunities for small businesses that could have competed or subcontracted. The justification for 'Not Available for Competition' must be robust to ensure it's not masking inefficiencies or a lack of market research.

What are the implications of the 'Not Available for Competition' (NAC) justification for this contract, and what oversight mechanisms are in place?

The 'Not Available for Competition' (NAC) justification signifies that a competitive bidding process was deemed impractical or impossible for this specific procurement. This could be due to unique technical requirements, proprietary technology, or urgent national security needs where only one source can fulfill the requirement. The implication is that the government did not explore alternative sources, potentially missing out on better pricing or innovative solutions. Oversight mechanisms typically involve a review and approval process for NAC justifications by higher authorities within the contracting agency (in this case, the Department of the Army) and potentially the Government Accountability Office (GAO) if protested. The Inspector General's office also provides oversight to ensure such justifications are legitimate and not abused.

What is the typical performance period and delivery timeline for similar communications equipment procurements under the Foreign Military Sales program?

The typical performance period and delivery timeline for similar communications equipment procurements under the Foreign Military Sales (FMS) program can vary widely depending on the complexity and quantity of the equipment. Contracts often range from several months to several years, accommodating manufacturing, testing, and delivery schedules. The current contract's duration of 609 days (approximately 20 months) from the delivery order start date (2025-12-30) to the estimated completion date (2027-08-31) appears reasonable for a significant procurement of specialized communications gear. However, a detailed comparison with FMS contracts for comparable systems would provide a more precise benchmark.

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: $14,419,954

Exercised Options: $14,419,954

Current Obligation: $14,419,954

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91CRB21D5003

IDV Type: IDC

Timeline