DoD's $46M L3 Technologies contract for additional terminals and spares awarded under full and open competition

Contract Overview

Contract Amount: $46,185,285 ($46.2M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-03-29

End Date: 2008-03-31

Contract Duration: 368 days

Daily Burn Rate: $125.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST NO FEE

Sector: Other

Official Description: PURCHASE ADDITIONAL TERMINALS AND SPARES

Place of Performance

Location: HAUPPAUGE, SUFFOLK County, NEW YORK, 11788

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $46.2 million to L3 TECHNOLOGIES, INC. for work described as: PURCHASE ADDITIONAL TERMINALS AND SPARES Key points: 1. Contract value of $46.19 million for terminals and spares. 2. Awarded to L3 Technologies, Inc. by the Department of the Air Force. 3. Procurement falls under Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing NAICS code. 4. Contract duration was 368 days. 5. Awarded as Other Direct Costs (ODC) with no fee. 6. Indicates a need for expanded or replacement communication equipment.

Value Assessment

Rating: fair

The contract value of $46.19 million for additional terminals and spares appears to be a reasonable investment for specialized communication equipment. Without specific details on the type and quantity of terminals, a direct price comparison is difficult. However, the 'Cost No Fee' contract type suggests that the government is primarily covering the contractor's direct costs and the fee is not a significant component, which can sometimes lead to less aggressive pricing compared to fixed-price contracts. Further analysis would require benchmarking against similar procurements for comparable communication systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bids suggests a moderate level of competition for this specific requirement. While full and open competition is generally preferred for maximizing price discovery and ensuring fair market value, the actual level of competition can vary based on the specificity and uniqueness of the required equipment.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government obtains goods and services at the best possible value.

Public Impact

The Department of the Air Force benefits from the acquisition of necessary communication terminals and spare parts. This contract supports the operational readiness and communication capabilities of Air Force personnel. The geographic impact is likely concentrated where Air Force operations require these specific terminals. Workforce implications may include manufacturing, logistics, and technical support roles related to the production and deployment of the equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost No Fee contract type may not incentivize the lowest possible price.
Limited competition with only 3 bidders could indicate a niche market or specialized requirements.
Contract duration of 368 days is relatively short, suggesting a specific, time-bound need.

Positive Signals

Awarded under full and open competition, allowing for broad market participation.
Procurement of essential communication equipment enhances operational capabilities.
Contract awarded to a known entity, L3 Technologies, Inc., suggesting a degree of familiarity with their capabilities.

Sector Analysis

This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. This industry is characterized by the production of a wide range of electronic equipment used for communication, broadcasting, and data transmission. The market size for such equipment is substantial, driven by both government and commercial demand for advanced wireless technologies. This specific procurement likely represents a small fraction of the overall defense spending on communication systems, which is a significant segment within the broader aerospace and defense industry.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The prime contractor, L3 Technologies, Inc., may engage small businesses as subcontractors based on their own procurement needs and supply chain strategies, but this is not mandated by the contract terms provided.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures would be tied to the delivery of the specified terminals and spares according to the contract's terms and conditions. Transparency is generally maintained through contract award databases and reporting requirements, though specific details of performance and cost are often not publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Communications Systems
Air Force Procurement
Wireless Communication Equipment
Terminal Acquisition
Spare Parts Procurement

Risk Flags

Potential for cost overruns due to 'Cost No Fee' contract type.
Limited competition may impact price discovery.
Lack of specific technical details hinders comprehensive value analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.2 million to L3 TECHNOLOGIES, INC.. PURCHASE ADDITIONAL TERMINALS AND SPARES

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

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 $46.2 million.

What is the period of performance?

Start: 2007-03-29. End: 2008-03-31.

What is the specific type and quantity of terminals and spares procured under this contract?

The provided data does not specify the exact type or quantity of terminals and spares purchased. The contract description is 'PURCHASE ADDITIONAL TERMINALS AND SPARES.' This suggests a need for augmenting existing communication systems or replacing worn-out components. Without further details, it is impossible to ascertain the technological sophistication or the precise number of units acquired. This information is crucial for a comprehensive value assessment and for understanding the operational context of the procurement.

How does the 'Cost No Fee' contract type impact the overall value for the government?

A 'Cost No Fee' (CNF) contract type means the government reimburses the contractor for allowable costs incurred during performance but does not pay an additional fee. This structure is often used when the scope of work is uncertain or when the contractor's profit margin is difficult to define upfront. While it can be advantageous in situations requiring flexibility, it may offer less incentive for the contractor to control costs aggressively compared to fixed-price contracts where profit is directly tied to cost savings. For taxpayers, this means the government bears the risk of cost overruns, and the ultimate price paid is directly related to the actual expenses incurred by the contractor.

What is the typical market price range for similar communication terminals and spares?

Determining a precise market price range for 'terminals and spares' without knowing the specific technology, capabilities, and quantity is challenging. Communication terminals can range from simple satellite phones to complex tactical data terminals or specialized broadcasting equipment, each with vastly different price points. Spare parts also vary widely in cost depending on their complexity and rarity. Benchmarking would require identifying comparable procurements for similar systems within the Department of Defense or other federal agencies, considering factors like unit cost, volume discounts, and any associated support or maintenance agreements.

What is the track record of L3 Technologies, Inc. in supplying similar communication equipment to the DoD?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a significant history of supplying various communication, electronic warfare, and sensor systems to the Department of Defense and other government agencies. Their portfolio often includes advanced communication terminals, integrated systems, and related support services. While this specific contract was for additional terminals and spares, L3 Technologies has been a major defense contractor involved in numerous large-scale programs. Their experience in this domain suggests a capability to deliver complex communication solutions, though the performance on this particular contract would need to be assessed through contract performance reports or past performance evaluations.

How does this $46.19 million expenditure compare to historical spending on communication terminals by the Air Force?

To compare this $46.19 million expenditure to historical Air Force spending on communication terminals, one would need to analyze historical contract data. This would involve searching databases for similar procurements over several fiscal years, filtering by the relevant NAICS codes (e.g., 334220) and product descriptions. The comparison should account for inflation and changes in technology over time. Without such a detailed historical analysis, it's difficult to determine if this contract represents a significant increase, decrease, or typical level of spending for the Air Force's needs in this area.

What are the potential risks associated with procuring communication equipment from a single awardee, even under full and open competition?

Even under full and open competition, if only a few bidders submit proposals, there's a risk that the chosen contractor might have significant leverage. Potential risks include less aggressive pricing, limited innovation if the contractor is not strongly incentivized to offer cutting-edge solutions, and potential supply chain vulnerabilities if the contractor relies heavily on a limited number of suppliers. Furthermore, if the equipment is highly specialized, the government might become dependent on that specific contractor for future upgrades, maintenance, or spare parts, potentially limiting future competition and increasing long-term costs.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 435 MORELAND ROAD, HAUPPAUGE, NY, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $46,194,542

Exercised Options: $46,194,542

Current Obligation: $46,185,285

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA872606D0001

IDV Type: IDC

Timeline