DoD awards $185M satellite communications support task order to L3 Technologies, Inc. without competition

Contract Overview

Contract Amount: $185,193,048 ($185.2M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-11-01

End Date: 2022-10-31

Contract Duration: 1,825 days

Daily Burn Rate: $101.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AWARD OF TASK ORDER 0006 FOR COMMON DATA LINK SATELLITE COMMUNICATIONS SUPPORT SERVICES.

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $185.2 million to L3 TECHNOLOGIES, INC. for work described as: AWARD OF TASK ORDER 0006 FOR COMMON DATA LINK SATELLITE COMMUNICATIONS SUPPORT SERVICES. Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to higher costs if not managed carefully. 2. Lack of competition raises concerns about potential overpayment and reduced value for taxpayer dollars. 3. The contract duration of 5 years (1825 days) suggests a long-term need for these critical services. 4. Awarded by the Defense Contract Management Agency, indicating a focus on ensuring contractor performance and compliance. 5. The North American Industry Classification System (NAICS) code 334220 points to the wireless communications equipment manufacturing sector. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms in this sector.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and specific performance metrics. The cost-plus-fixed-fee structure necessitates rigorous oversight to ensure costs remain reasonable and do not escalate unnecessarily. Without a competitive process, it's difficult to ascertain if L3 Technologies, Inc. provided the best possible price for the satellite communications support services. Further analysis would require detailed cost breakdowns and comparisons to similar, competitively awarded contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This task order was awarded using a sole-source (not competed) procedure. This means that only one contractor, L3 Technologies, Inc., was solicited for this requirement. The absence of a competitive bidding process limits the government's ability to explore alternative solutions or negotiate the most favorable pricing. It suggests that either there were unique capabilities required that only L3 Technologies possessed, or the procurement process did not allow for broader competition.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no market pressure to drive down prices. This lack of competition means the government may not be achieving the best possible value for its investment.

Public Impact

The Department of Defense benefits from continued satellite communications support services, crucial for military operations and intelligence gathering. The contract ensures the availability of specialized technical support for complex communication systems. The geographic impact is likely global, given the nature of satellite communications supporting military deployments worldwide. The contract supports a workforce skilled in advanced telecommunications and satellite technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Cost-plus-fixed-fee contracts require diligent oversight to prevent cost overruns.
Sole-source awards can limit innovation by not exploring a wider range of solutions.

Positive Signals

Ensures continuity of critical satellite communications support for national defense.
Awarded to a known entity (L3 Technologies, Inc.) with presumed expertise in the field.
The fixed fee component provides some level of cost predictability for the government.

Sector Analysis

The satellite communications sector is a vital component of the broader telecommunications industry, characterized by high barriers to entry due to technological complexity and capital investment. This contract falls within the wireless communications equipment manufacturing and services sub-sector. Spending in this area is critical for government operations, particularly defense, enabling secure and reliable communication across vast distances. Comparable spending benchmarks are difficult to establish without more specific service details, but the overall defense telecommunications market is substantial.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award to a large corporation like L3 Technologies, Inc. suggests that the primary focus was on specialized capabilities rather than fostering small business participation. This could mean missed opportunities for small businesses to contribute to critical defense communication infrastructure and gain valuable experience.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance, compliance with terms, and proper cost accounting. The cost-plus-fixed-fee structure necessitates detailed financial reviews and audits to verify expenditures. Transparency is generally maintained through contract reporting systems, though specific details of cost breakdowns may be considered proprietary. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Satellite Communications
Defense Telecommunications Services
Wireless Communications Equipment Manufacturing
L3 Technologies, Inc. Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Lack of Competition
Cost-Plus-Fixed-Fee Structure
Potential for Cost Overruns
Limited Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $185.2 million to L3 TECHNOLOGIES, INC.. AWARD OF TASK ORDER 0006 FOR COMMON DATA LINK SATELLITE COMMUNICATIONS SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is L3 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 $185.2 million.

What is the period of performance?

Start: 2017-11-01. End: 2022-10-31.

What is the track record of L3 Technologies, Inc. with the Department of Defense for similar satellite communications support services?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a significant history of contracting with the Department of Defense across various technology and defense sectors. While specific details on their past performance for this exact type of satellite communications support are not provided in this data snippet, the company has been a major defense contractor for decades, involved in areas such as aerospace systems, electronic warfare, communications, and information technology. Their extensive portfolio suggests a deep understanding of military requirements. However, a comprehensive assessment would require reviewing their performance history on specific contracts, including any past issues related to cost, schedule, or quality, which are typically available through government contract databases and performance assessment reports.

How does the awarded amount of $185 million compare to similar satellite communications support contracts awarded by the DoD?

Directly comparing the $185 million award for this specific task order to other DoD satellite communications contracts is challenging without more granular data on the scope of services, duration, and specific technologies involved. However, the magnitude of the award suggests a substantial and long-term requirement. The DoD consistently invests billions annually in satellite communications, encompassing everything from satellite manufacturing and launch to ground segment operations and user terminal support. Task orders of this size are not uncommon for critical, long-duration support services, especially when procured through established channels. The lack of competition here, however, makes a direct value-for-money comparison difficult against potentially competitively bid contracts for similar, albeit not identical, services.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for critical defense communications?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for critical defense communications are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing and reduced incentive for the contractor to optimize costs, as the government bears the brunt of allowable expenses. Secondly, the CPFF structure, while providing flexibility, carries inherent risks of cost overruns. The 'fixed fee' component is intended to incentivize performance, but if not rigorously managed and audited, the 'cost' portion can escalate significantly, increasing the total contract value beyond initial projections. For critical communications, this also introduces a risk of vendor lock-in and potential vulnerabilities if the sole provider faces operational or financial difficulties.

What is the expected effectiveness of the satellite communications support services provided under this contract?

The expected effectiveness of the satellite communications support services under this contract is presumed to be high, given the critical nature of these services to Department of Defense operations. The contract aims to ensure the reliable functioning and maintenance of vital satellite communication systems, which are essential for command and control, intelligence dissemination, and global operational coordination. Effectiveness will be measured by the contractor's ability to meet performance standards, maintain system uptime, provide timely technical support, and adapt to evolving technological requirements. The Defense Contract Management Agency's oversight is crucial in monitoring and ensuring this effectiveness throughout the contract's lifespan.

How has historical spending on satellite communications support by the DoD evolved, and where does this contract fit in?

Historical spending by the DoD on satellite communications has been substantial and generally increasing, driven by the growing reliance on space-based assets for modern warfare and global operations. This includes investments in new satellite constellations, ground infrastructure, and ongoing support services. This $185 million task order represents a significant, but not unprecedented, allocation for specialized support services within this broader spending trend. It fits into the category of sustainment and operational support for existing communication capabilities. Understanding the evolution requires looking at trends in satellite technology adoption, the increasing complexity of communication networks, and the strategic importance placed on resilient space-based C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) capabilities.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $363,798,107

Exercised Options: $191,529,938

Current Obligation: $185,193,048

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $7,193,490

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56KGY17D0001

IDV Type: IDC

Timeline