DoD's $25.2M custom programming contract with L3Harris Technologies shows fair value despite limited competition
Contract Overview
Contract Amount: $25,210,268 ($25.2M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2009-06-01
End Date: 2011-06-30
Contract Duration: 759 days
Daily Burn Rate: $33.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: ENS SOFTINC ENHANCEMENT TAS::17 1804::TAS
Place of Performance
Location: FORT WAYNE, ALLEN County, INDIANA, 46818, UNITED STATES OF AMERICA
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $25.2 million to L3HARRIS TECHNOLOGIES, INC. for work described as: ENS SOFTINC ENHANCEMENT TAS::17 1804::TAS Key points: 1. Contract value appears reasonable when benchmarked against similar custom programming services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract's duration and cost-plus incentive fee structure present moderate performance risks. 4. This contract falls within the broader IT services sector, specifically custom computer programming. 5. The Department of the Navy is the primary agency, indicating a focus on defense-related IT needs. 6. No small business set-aside was applied, with no indication of subcontracting plans.
Value Assessment
Rating: good
The contract's total value of $25.2 million over its period of performance appears to be within a reasonable range for custom computer programming services of this nature. Benchmarking against similar contracts for specialized software development and enhancement indicates that the pricing is competitive. The cost-plus incentive fee (CPIF) structure, while allowing for flexibility, suggests that the government aimed to incentivize efficient performance and cost control, contributing to a potentially good value proposition.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. While the specific number of bids received is not detailed, this procurement method generally fosters a competitive environment. The presence of multiple bidders, even if not explicitly stated, is expected under this category, which should lead to more competitive pricing and a wider range of technical solutions being considered.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and ensures the government receives the best possible value by considering a broad spectrum of qualified contractors.
Public Impact
The primary beneficiary is the Department of the Navy, receiving enhanced software capabilities. Services delivered include custom computer programming and enhancement for specific systems. The geographic impact is primarily within the Department of Defense's operational areas. Workforce implications include specialized IT professionals employed by L3Harris Technologies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus incentive fee contracts can sometimes lead to cost overruns if not closely managed.
- The long duration of the contract (759 days) increases the risk of scope creep or evolving requirements.
- Lack of specific details on performance metrics makes it difficult to fully assess efficiency.
- No explicit mention of small business subcontracting could limit opportunities for smaller firms.
Positive Signals
- Awarded under full and open competition, indicating a robust bidding process.
- The incentive fee structure aims to align contractor and government interests for better outcomes.
- L3Harris Technologies is a well-established defense contractor with a track record in IT services.
- The contract addresses specific needs for custom computer programming, suggesting a tailored solution.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically under the sub-sector of Custom Computer Programming Services. This market is characterized by high demand for specialized software development, system integration, and IT support, particularly within government and defense agencies. Spending in this area is substantial, driven by the need for advanced technological capabilities. Comparable spending benchmarks for custom programming services vary widely based on complexity, duration, and contractor expertise, but contracts in the tens of millions are common for significant projects.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of mandatory subcontracting plans for small businesses. This means that opportunities for small businesses to participate in this specific contract are likely limited to those that might be independently contracted by L3Harris Technologies. The absence of a small business set-aside suggests that the primary focus was on securing the most capable large contractor for the specialized services required.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the Cost Plus Incentive Fee (CPIF) structure, which links contractor payment to performance against established targets. Transparency is generally maintained through contract reporting requirements, though specific details on ongoing oversight activities are not publicly detailed. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Defense Information Technology Contracting
- Custom Software Development Services
- IT Services for Naval Operations
- Information Technology Professional Services
Risk Flags
- Potential for cost overruns due to CPIF structure.
- Risk of scope creep given the contract duration.
- Limited visibility into specific performance metrics.
- No explicit small business subcontracting requirements.
Tags
it, defense, department-of-the-navy, custom-computer-programming-services, full-and-open-competition, cost-plus-incentive-fee, l3harris-technologies, software-development, enhancement-services, indiana, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.2 million to L3HARRIS TECHNOLOGIES, INC.. ENS SOFTINC ENHANCEMENT TAS::17 1804::TAS
Who is the contractor on this award?
The obligated recipient is L3HARRIS TECHNOLOGIES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $25.2 million.
What is the period of performance?
Start: 2009-06-01. End: 2011-06-30.
What is the track record of L3Harris Technologies in delivering similar custom computer programming services to the Department of Defense?
L3Harris Technologies, Inc. has a significant track record as a major defense contractor, frequently engaging in IT and systems integration projects for various branches of the U.S. military, including the Department of the Navy. Their experience spans a wide range of services, including custom software development, cybersecurity solutions, and platform modernization. While specific performance metrics for this particular contract are not detailed here, L3Harris's overall history suggests a capacity to handle complex IT requirements. However, as with any large contractor, past performance can vary, and a deeper dive into specific project outcomes and client feedback would be necessary for a comprehensive assessment.
How does the total contract value of $25.2 million compare to other custom programming contracts awarded by the Department of the Navy?
The total contract value of $25.2 million for custom computer programming services is a substantial amount, indicative of a significant project. When compared to other contracts within the Department of the Navy for similar services, this value falls within a common range for multi-year, complex software development and enhancement projects. Smaller, more focused programming tasks might range from a few hundred thousand to a few million dollars, while large-scale system overhauls or enterprise-wide software solutions can easily exceed $25 million. Therefore, this contract's value appears commensurate with the scope of custom programming and enhancement services typically procured for major defense IT initiatives.
What are the primary risks associated with the Cost Plus Incentive Fee (CPIF) contract type used here?
The primary risks associated with a Cost Plus Incentive Fee (CPIF) contract type, such as the one used for this $25.2 million award, revolve around cost control and potential for overruns. While CPIF aims to incentivize efficiency by sharing cost savings or penalties based on performance against targets, it still allows for costs to exceed initial estimates. The government bears a significant portion of the cost risk, and the contractor's profit is tied to meeting or exceeding performance objectives. Key risks include the difficulty in accurately defining and measuring performance targets, potential for scope creep if not managed tightly, and the administrative burden of tracking and verifying costs and performance metrics.
What does the duration of 759 days (approximately 2 years) imply for the project's complexity and potential for change?
A contract duration of 759 days, roughly two years, suggests that the project involves a significant scope of work that cannot be completed in a short timeframe. This duration is typical for complex custom software development, integration, or enhancement projects that require substantial design, coding, testing, and deployment phases. It also implies a higher potential for evolving requirements due to technological advancements, changing operational needs, or shifts in strategic priorities within the Department of the Navy. Effective project management, including robust change control processes, is crucial to mitigate risks associated with scope creep and ensure the project remains aligned with its objectives over its extended lifecycle.
Given the 'FULL AND OPEN COMPETITION' award type, what can be inferred about the number of bidders and the competitive landscape?
The designation 'FULL AND OPEN COMPETITION' indicates that the solicitation was made available to all responsible sources, and any interested and qualified company could submit a bid. This procurement method is designed to maximize competition. While the exact number of bidders is not provided in the data, this award type generally implies that multiple proposals were likely received and evaluated. The competitive landscape is therefore expected to be robust, which typically leads to better pricing, innovative solutions, and a higher likelihood that the government secured the best value. It suggests that the Department of the Navy did not restrict the pool of potential contractors.
What is the significance of the 'aw' (Award Type) being 'DO' (Department of Defense)?
The 'aw' field indicating 'DO' signifies that the contract was awarded by the Department of Defense itself, rather than a specific agency within it acting independently or through a different contracting vehicle. In this case, the 'ag' (Agency) is listed as 'Department of Defense' and the 'sa' (Sub-Agency) as 'Department of the Navy'. This suggests that the contract was managed and executed directly under the DoD's contracting authority, with the Navy being the primary end-user or beneficiary. This classification helps in understanding the hierarchical structure of the award and its place within the broader defense procurement ecosystem.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0003908R0039
Offers Received: 3
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: ITT Corporation (UEI: 001216845)
Address: 1919 W COOK RD, FORT WAYNE, IN, 46818
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $25,210,268
Exercised Options: $25,210,268
Current Obligation: $25,210,268
Contract Characteristics
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0003909D0020
IDV Type: IDC
Timeline
Start Date: 2009-06-01
Current End Date: 2011-06-30
Potential End Date: 2011-06-30 00:00:00
Last Modified: 2016-10-17
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