DoD's $108M contract for engineering services awarded to Harris Corporation shows potential value concerns

Contract Overview

Contract Amount: $10,805,128 ($10.8M)

Contractor: Harris Corporation

Awarding Agency: Department of Defense

Start Date: 1999-05-21

End Date: 2009-04-17

Contract Duration: 3,619 days

Daily Burn Rate: $3.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Defense

Official Description: 199908!5700!0375!GH50 !SACRAMENTO ALC/LMK !F0460698D0045 !A!*!0002 !19990521!19990930!883465783!004203337!004203337!N!66948!HARRIS CORPORATION !P.O. BOX 91000 !MELBOURNE !FL!32906!43975!009!12!MELBOURNE !BREVARD !FLORIDA !0001!+000000036044!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3CEA!DEF METEOR SAT PROG !8711!5!B!M!*!B!A!*!D !U!U!1!001!N!1G!Z!N!Z!* !* !N!C!*!B!A!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!

Place of Performance

Location: PALM BAY, BREVARD County, FLORIDA, 32905

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $10.8 million to HARRIS CORPORATION for work described as: 199908!5700!0375!GH50 !SACRAMENTO ALC/LMK !F0460698D0045 !A!*!0002 !19990521!19990930!883465783!004203337!004203337!N!66948!HARRIS CORPORATION !P.O. BOX 91000 !MELBOURNE !FL!32906!43975!009!12!MELBOURNE !BREVAR… Key points: 1. The contract's value appears high relative to its duration and scope, warranting further investigation into cost-effectiveness. 2. Limited competition for this significant award raises questions about price discovery and potential overpayment. 3. The long performance period suggests a need for ongoing monitoring of contractor performance and evolving requirements. 4. This contract falls within the broader 'Engineering Services' category, but its specific application to defense meteorology is unique. 5. The absence of small business participation is noted, with implications for broader economic impact. 6. Oversight mechanisms for this contract need to be clearly defined to ensure accountability and transparency.

Value Assessment

Rating: questionable

The total award amount of $108,051,280 over a period of 3619 days (approximately 10 years) suggests a significant investment. Benchmarking this against similar long-term, specialized engineering services contracts within the Department of Defense is crucial. Without comparable data, it is difficult to definitively assess value for money. However, the extended duration could indicate a stable, long-term need, potentially justifying the overall cost if performance has been consistently excellent and requirements have remained stable or evolved appropriately.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source or limited competition scenario. The data does not specify the reasons for this approach, such as a lack of available sources, a national security imperative, or a follow-on to a previous sole-source award. The absence of a competitive bidding process means that the government did not benefit from the price reductions and innovation that typically arise from a robust competition.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not secure the most competitive pricing available in the market.

Public Impact

The primary beneficiary of this contract is the Department of Defense, specifically the Department of the Air Force, which receives critical engineering services. The services delivered are related to 'SYSTEMS ENGINEERING SERVICES' for the 'DEF METEOR SAT PROG' (Defense Meteorology Satellite Program). The geographic impact is primarily within the United States, supporting defense operations. The contract supports a specialized segment of the aerospace and defense industry workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in suboptimal pricing.
Long contract duration increases risk of cost overruns if not managed effectively.
Potential for scope creep over the extended performance period.
Limited transparency due to sole-source award.

Positive Signals

Awarded to a known entity (Harris Corporation) with a track record in the aerospace sector.
Long performance period suggests a sustained need and potentially stable service delivery.
Contract supports a critical defense program (Defense Meteorology Satellite Program).

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting a defense-related program. The market for specialized systems engineering services for defense applications is often characterized by high barriers to entry, requiring deep technical expertise and security clearances. Comparable spending benchmarks would typically be found within other large-scale defense systems development and sustainment contracts, which can run into hundreds of millions or billions of dollars over their lifecycles.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the prime contractor is Harris Corporation, a large business. There is no explicit information regarding subcontracting plans or actual performance with small businesses. This suggests that the primary economic impact for small businesses would be indirect, if at all, through potential lower-tier supply chain opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management within the Department of the Air Force. Given the sole-source nature and long duration, robust oversight is critical to ensure performance, manage costs, and prevent scope creep. Transparency is limited by the lack of competitive bidding, but contract modifications, performance reviews, and financial reporting should be subject to internal agency review and potentially Inspector General audits.

Related Government Programs

Defense Meteorology Satellite Program (DMSP)
Aerospace Engineering Services
Systems Engineering Contracts
Department of Defense IT and Communications Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Long contract duration may increase risk.
Limited transparency on justification for sole-source.
No explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.8 million to HARRIS CORPORATION. 199908!5700!0375!GH50 !SACRAMENTO ALC/LMK !F0460698D0045 !A!*!0002 !19990521!19990930!883465783!004203337!004203337!N!66948!HARRIS CORPORATION !P.O. BOX 91000 !MELBOURNE !FL!32906!43975!009!12!MELBOURNE !BREVARD !FLORIDA !0001!+000000036044!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3CEA!DEF METEOR SAT PROG !8711!5!B!M!*!B!A!*!D !U!U!1!0

Who is the contractor on this award?

The obligated recipient is HARRIS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $10.8 million.

What is the period of performance?

Start: 1999-05-21. End: 2009-04-17.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' but does not offer the specific justification. Common reasons for sole-source awards in defense include the unavailability of other sources capable of meeting the requirement, a critical need for compatibility with existing systems, national security concerns, or a follow-on contract where only one source can fulfill the requirement. A detailed review of the contract file and associated documentation within the Department of the Air Force would be necessary to ascertain the precise rationale. Without this, it is difficult to assess if the sole-source determination was appropriate and if it led to a fair and reasonable price.

How does the cost per year for this contract compare to industry benchmarks for similar systems engineering services?

The total award of $108,051,280 over 3619 days averages to approximately $29,856 per day, or roughly $10.8 million per year. Benchmarking this against industry standards for specialized systems engineering services, particularly within the defense sector, requires access to proprietary cost data and market analyses. Factors such as the complexity of the Defense Meteorology Satellite Program, the level of expertise required, and the specific deliverables would influence the appropriate cost. Generally, highly specialized engineering services for critical defense systems command premium pricing due to the unique skill sets and stringent performance requirements involved. A definitive comparison would necessitate detailed cost breakdowns and access to market intelligence reports.

What are the key performance indicators (KPIs) used to measure the success of Harris Corporation under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, for systems engineering services supporting a program like the Defense Meteorology Satellite Program, KPIs would likely focus on aspects such as system reliability, data accuracy and timeliness, successful integration of new components or software, adherence to project schedules, and effective management of technical risks. Performance would be assessed through regular technical reviews, milestone achievements, and potentially user feedback from meteorological agencies. The contracting officer's representative (COR) would be responsible for monitoring these KPIs and ensuring contractor compliance with the contract's technical requirements.

Has Harris Corporation had any past performance issues on similar government contracts?

The provided data does not contain specific details on Harris Corporation's past performance issues on similar government contracts. However, Harris Corporation (now L3Harris Technologies) is a well-established defense contractor with a long history of serving government agencies. Government contract awards are typically preceded by a review of past performance, which can include contractor performance assessment reporting (CPARs). While specific issues are not detailed here, any significant performance problems on prior contracts could have influenced the terms, pricing, or even the decision-making process for this particular award, especially if it was a sole-source continuation.

What is the historical spending trend for the Defense Meteorology Satellite Program (DMSP) and how does this contract fit within it?

The provided data focuses on a single contract award to Harris Corporation. To understand the historical spending trend for the DMSP, one would need to analyze aggregated contract data for this program over multiple fiscal years. This would involve searching for all contracts awarded under the DMSP umbrella, identifying the agencies involved (primarily the Air Force), and summing the award amounts annually. This specific $108 million contract, awarded in 1999 and ending in 2009, represents a significant portion of spending during its performance period. Understanding the DMSP's overall budget, its evolution, and the role of various contractors would provide context for this contract's place within the program's financial history.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: P.O. BOX 91000, MELBOURNE, FL, 32906

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F0460698D0045

IDV Type: IDC

Timeline