DoD's $13M L3Harris contract for navigation systems awarded via sole-source justification

Contract Overview

Contract Amount: $13,000,000 ($13.0M)

Contractor: L3harris Technologies, Inc

Awarding Agency: Department of Defense

Start Date: 2007-12-17

End Date: 2010-09-11

Contract Duration: 999 days

Daily Burn Rate: $13.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FC KIT

Place of Performance

Location: VAN NUYS, LOS ANGELES County, CALIFORNIA, 91406

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $13.0 million to L3HARRIS TECHNOLOGIES, INC for work described as: FC KIT Key points: 1. Contract awarded without competition, raising questions about price discovery and potential for overpayment. 2. Sole-source award suggests limited market options or specific technological requirements. 3. Long contract duration (999 days) indicates a potentially ongoing need for these specialized systems. 4. The contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 5. Awarded by the Defense Contract Management Agency, indicating a focus on defense-related procurement. 6. The 'Cost Plus Fixed Fee' contract type can incentivize cost overruns if not closely monitored.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money. The 'Cost Plus Fixed Fee' structure, while common for complex R&D, carries inherent risks of cost escalation. A comparison to similar sole-source awards for navigation systems would be necessary to assess if the pricing is reasonable, but such data is not readily available. The lack of competition limits the ability to determine if taxpayers received the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3Harris Technologies, Inc. was the only vendor considered. This typically occurs when a unique capability is required, or when only one vendor can meet the specific technical specifications. The absence of a competitive process means that the government did not benefit from the price reductions and innovation that typically arise from multiple bidders vying for a contract.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of Defense, which receives critical navigation systems for its operations. The contract supports the development and delivery of specialized search, detection, and navigation instruments. The geographic impact is primarily within the United States, supporting defense readiness. The contract likely supports a specialized workforce within L3Harris Technologies, Inc., contributing to high-tech manufacturing and engineering jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs.
Cost-plus contract type can incentivize higher spending if not managed rigorously.
Lack of transparency in the justification for sole-source award.
Long contract duration could mask inefficiencies or scope creep.

Positive Signals

L3Harris Technologies is a known entity in defense contracting, suggesting some level of established capability.
The contract addresses a critical need for navigation systems within the Department of Defense.
The fixed fee component of the contract type provides some cost certainty for the contractor's profit.

Sector Analysis

The aerospace and defense industry is characterized by high barriers to entry, complex technological requirements, and significant government spending. This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, which is a niche but critical area for military operations. Comparable spending in this sector is substantial, driven by ongoing modernization efforts and the need for advanced avionics and guidance systems. The market is often dominated by a few large, specialized contractors.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating subcontracting opportunities for small businesses. The award to a large prime contractor like L3Harris Technologies, Inc. suggests that the focus is on specialized capabilities that may not be readily available from smaller firms. This could limit the direct economic impact on the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The 'Cost Plus Fixed Fee' structure necessitates rigorous financial oversight to manage allowable costs and ensure the fixed fee is earned appropriately. Transparency regarding the sole-source justification and performance metrics would be key accountability measures. Inspector General involvement would be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

DoD Navigation Systems Procurement
Aeronautical and Nautical Instrument Manufacturing
Defense Contract Management Agency Awards
Sole-Source Defense Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.0 million to L3HARRIS TECHNOLOGIES, INC. FC KIT

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $13.0 million.

What is the period of performance?

Start: 2007-12-17. End: 2010-09-11.

What is the specific justification provided by the Department of Defense for awarding this contract on a sole-source basis to L3Harris Technologies, Inc.?

The provided data indicates the contract was awarded under 'NOT COMPETED,' which is a general classification for sole-source or limited competition awards. A full justification would typically detail the specific circumstances, such as the unique capabilities of L3Harris, the lack of other responsible sources, or urgent and compelling needs that preclude full and open competition. Without access to the official justification document (e.g., a Justification and Approval - J&A), the precise reasons remain unspecified. This lack of transparency is a common concern with sole-source awards, as it can obscure whether the government truly explored all viable options or if there were other qualified bidders.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type compare to other contract types in terms of risk and potential for cost overruns in defense procurements?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex projects where the scope is not fully defined at the outset. It allows the contractor to recover all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost to the government is variable and can exceed initial estimates if costs escalate. This contrasts with Fixed-Price contracts, where the contractor bears more risk for cost overruns. CPFF contracts can incentivize contractors to control costs to ensure they can complete the work within the estimated cost range to earn their fee, but they also require robust government oversight to scrutinize allowable costs and prevent unnecessary spending. The risk of cost overruns is generally higher for the government compared to fixed-price arrangements.

What is the typical performance period for contracts under NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing)?

Contracts under NAICS code 334511 can vary significantly in duration depending on the specific product or service. For the manufacturing of complex systems and instruments, contract durations can range from a few months for prototypes or specific components to several years for full-scale production, integration, and sustainment. The provided contract has a duration of 999 days, which is approximately 2.7 years, suggesting a substantial project. This duration is not unusual for defense systems development or production, where technological complexity and rigorous testing protocols often necessitate extended timelines. Benchmarking against other contracts within this NAICS code would reveal a wide spectrum of performance periods.

What is the historical spending pattern for L3Harris Technologies, Inc. with the Department of Defense for similar navigation systems?

Analyzing the historical spending patterns for L3Harris Technologies, Inc. with the Department of Defense for similar navigation systems would require access to comprehensive contract databases. L3Harris is a major defense contractor, and it is highly probable they have received numerous awards for navigation, guidance, and related systems over the years. Without specific data queries, it's impossible to quantify this historical spending. However, given their established presence in the defense sector, it's reasonable to assume a consistent track record of receiving contracts for such technologies. A detailed analysis would involve examining past awards, contract values, and performance history to identify trends and assess consistency.

What are the potential risks associated with a 999-day contract duration for specialized defense equipment?

A 999-day contract duration for specialized defense equipment presents several potential risks. Firstly, technological obsolescence is a significant concern; defense technology evolves rapidly, and equipment developed over nearly three years could be outdated by the time it is fully delivered or deployed. Secondly, cost escalation is a risk, especially with 'Cost Plus' contract types, as the longer the period, the greater the opportunity for unforeseen cost increases due to inflation, material shortages, or scope creep. Thirdly, contractor performance monitoring becomes more challenging over extended periods; maintaining consistent quality and adherence to specifications requires sustained oversight. Finally, the long duration might indicate a lack of readily available alternatives or a complex, multi-stage development process, both of which can introduce schedule and performance uncertainties.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: SHIP AND MARINE EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: ITT Corporation (UEI: 001216845)

Address: 7821 ORION AVE, VAN NUYS, CA, 91406

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,000,000

Exercised Options: $13,000,000

Current Obligation: $13,000,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002407G5362

IDV Type: IDC

Timeline