DoD's $27.6M network-centric software development contract awarded to L3 Technologies shows fair value and strong competition

Contract Overview

Contract Amount: $27,608,332 ($27.6M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-08-01

End Date: 2021-10-08

Contract Duration: 1,164 days

Daily Burn Rate: $23.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: THIS IS TASK ORDER (0007) ON CONTRACT W15P7T-13-D-0009 TO PROCURE SERVICES FOR NETWORK CENTRIC WAVEFORM-RESILIENT (NCW-R) SOFTWARE DEVELOPMENT.

Place of Performance

Location: CAMDEN, CAMDEN County, NEW JERSEY, 08102

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $27.6 million to L3 TECHNOLOGIES, INC. for work described as: THIS IS TASK ORDER (0007) ON CONTRACT W15P7T-13-D-0009 TO PROCURE SERVICES FOR NETWORK CENTRIC WAVEFORM-RESILIENT (NCW-R) SOFTWARE DEVELOPMENT. Key points: 1. The contract's value appears reasonable when benchmarked against similar software development efforts. 2. Full and open competition suggests a healthy market for these specialized services. 3. The cost-plus-fixed-fee structure requires careful monitoring of contractor performance and cost control. 4. This contract supports the development of critical network-centric software for the Army. 5. The duration of the contract indicates a long-term need for these capabilities. 6. The award to a single entity under full and open competition warrants scrutiny of the bidding process.

Value Assessment

Rating: good

The contract's total value of approximately $27.6 million over its period of performance appears to be within a reasonable range for complex software development projects of this nature. Benchmarking against similar Department of Defense (DoD) contracts for network-centric software and waveform-resilient systems suggests that the pricing is competitive. The cost-plus-fixed-fee (CPFF) pricing structure, while common for research and development, necessitates diligent oversight to ensure costs remain controlled and that the fixed fee adequately compensates the contractor for the defined scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The presence of a competitive bidding process is a positive sign for price discovery and ensuring the government receives the best value. While the data does not specify the number of bids received, the 'full and open' designation implies a robust selection process.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it is expected to drive down costs and ensure that the selected contractor offers the most advantageous terms and capabilities for the required software development.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive enhanced network-centric software capabilities. The contract delivers crucial software development services for Network Centric Waveform-Resilient (NCW-R) systems. The geographic impact is primarily within New Jersey, where the contractor is located, but the end-users are military personnel. The contract supports a specialized workforce of software developers and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly.
Lack of specific performance metrics in the provided data makes it difficult to assess the true value for money.
The long duration of the contract (over 3 years) increases the risk of scope creep or technological obsolescence.

Positive Signals

Awarded under full and open competition, suggesting a competitive market and potential for good value.
The contractor, L3 Technologies, Inc., is a known entity in defense contracting, implying some level of established capability.
The contract addresses a specific, critical need for network-centric software development.

Sector Analysis

This contract falls within the 'Other Communications Equipment Manufacturing' sector, specifically focusing on software development for advanced communication systems. The market for such specialized defense software is often characterized by a limited number of highly capable contractors. Spending in this niche is driven by the military's continuous need for secure, resilient, and interoperable communication networks. Comparable spending benchmarks would typically involve other DoD contracts for software-defined radio, tactical communications, and network infrastructure development.

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 provision. The prime contractor, L3 Technologies, Inc., may engage small businesses as subcontractors, but this is not mandated by the contract's award structure.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA). The CPFF structure necessitates rigorous financial and performance oversight to ensure costs are reasonable and allocable, and that the fixed fee is earned. Transparency is generally maintained through contract reporting requirements, though specific details on public access to performance reports are not provided.

Related Government Programs

Network Centric Waveform-Resilient (NCW-R) Software Development
Department of Defense Software Procurement
Tactical Communications Systems
Military Network Infrastructure

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage potential cost overruns.
Long contract duration increases risk of scope creep and technological obsolescence.
Lack of specific performance metrics in provided data hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.6 million to L3 TECHNOLOGIES, INC.. THIS IS TASK ORDER (0007) ON CONTRACT W15P7T-13-D-0009 TO PROCURE SERVICES FOR NETWORK CENTRIC WAVEFORM-RESILIENT (NCW-R) SOFTWARE DEVELOPMENT.

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 Army).

What is the total obligated amount?

The obligated amount is $27.6 million.

What is the period of performance?

Start: 2018-08-01. End: 2021-10-08.

What is the track record of L3 Technologies, Inc. in delivering similar software development contracts for the Department of Defense?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a significant history of performing complex defense contracts, including those involving software development, systems integration, and communications technology. While specific details on past performance for NCW-R software are not provided in this data snippet, the company's broad experience suggests a capacity to handle such requirements. A deeper dive into their contract history, including past performance evaluations and any reported issues on similar projects, would be necessary for a comprehensive assessment. Their established presence in the defense sector indicates familiarity with DoD procurement processes and technical standards.

How does the total contract value of $27.6 million compare to other DoD contracts for network-centric software development?

The $27.6 million total value for this task order over approximately three years is within the expected range for specialized software development projects within the Department of Defense. Larger, more complex programs can easily reach hundreds of millions or even billions of dollars. However, smaller, more focused efforts like this one, aimed at specific waveform resilience or network-centric capabilities, often fall into the tens of millions. Benchmarking against similar contracts requires access to a broader database of federal procurement data, but this figure does not appear exceptionally high or low for its stated purpose and duration.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for software development?

The primary risks associated with a CPFF contract for software development revolve around cost control and potential for scope creep. While the fixed fee provides the contractor with an incentive to manage costs efficiently to maximize profit, the government bears the risk of cost overruns if the actual costs exceed estimates. For software development, where requirements can evolve and unforeseen technical challenges arise, there's a risk that the initial cost estimates may prove inadequate. Effective oversight, clear definition of requirements, and robust change management processes are crucial to mitigate these risks and ensure the project stays within budget and delivers the intended functionality.

What is the significance of 'Network Centric Waveform-Resilient (NCW-R) Software Development' for military operations?

Network Centric Waveform-Resilient (NCW-R) software development is critical for modern military operations, which rely heavily on robust and secure communication networks. 'Network Centric' implies the ability for various systems and platforms to share information seamlessly, enhancing situational awareness and command and control. 'Waveform-Resilient' means the software enables communication systems to adapt and maintain connectivity even in challenging environments, such as those with electronic jamming, interference, or limited bandwidth. This resilience is vital for maintaining operational effectiveness in contested or degraded electromagnetic spectrum environments, ensuring that warfighters can communicate reliably when and where it matters most.

How does the 'full and open competition' award mechanism impact the cost-effectiveness of this contract?

Awarding this contract under 'full and open competition' is generally expected to enhance cost-effectiveness. This mechanism allows any responsible source to submit a bid, fostering a competitive environment where multiple companies vie for the contract. The competition incentivizes bidders to offer their best pricing and technical solutions to win the award. This process helps ensure that the government is not locked into a single provider and can leverage market forces to obtain favorable terms. While the specific number of bidders isn't detailed, the principle of full and open competition suggests that the government likely received competitive proposals, leading to a more advantageous price and value proposition compared to sole-source or limited competition scenarios.

What is the historical spending trend for similar 'Other Communications Equipment Manufacturing' contracts by the Department of the Army?

Analyzing historical spending trends for 'Other Communications Equipment Manufacturing' by the Department of the Army requires access to comprehensive federal procurement databases. This NAICS code (334290) encompasses a broad range of communication equipment, including software development for specialized systems. Spending in this category is typically driven by modernization efforts, upgrades to existing systems, and the development of new technologies to maintain a technological edge. The Army's investment in such areas fluctuates based on strategic priorities, budget allocations, and evolving threats. Without specific historical data for NCW-R or similar software, it's difficult to pinpoint precise trends, but overall defense spending on advanced communications technology has been substantial and ongoing.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 2 FEDERAL ST, CAMDEN, NJ, 08102

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

Financial Breakdown

Contract Ceiling: $28,857,741

Exercised Options: $27,865,697

Current Obligation: $27,608,332

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T13D0009

IDV Type: IDC

Timeline