DoD's $42.6M contract for broadcasting equipment awarded to L3 Technologies, Inc. shows fair value

Contract Overview

Contract Amount: $42,630,097 ($42.6M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-12-03

End Date: 2009-05-04

Contract Duration: 518 days

Daily Burn Rate: $82.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST NO FEE

Sector: Other

Official Description: GMT PRODUCTION BUY

Place of Performance

Location: HAUPPAUGE, SUFFOLK County, NEW YORK, 11788

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $42.6 million to L3 TECHNOLOGIES, INC. for work described as: GMT PRODUCTION BUY Key points: 1. The contract's value appears reasonable when benchmarked against similar procurements. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract duration of 518 days is within typical ranges for this type of equipment. 4. The award was made to L3 Technologies, Inc., a known entity in the defense sector. 5. The contract falls under the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing NAICS code. 6. The contract was awarded by the Department of the Air Force, a major DoD component.

Value Assessment

Rating: good

The total award amount of $42.6 million for broadcasting equipment appears to be within a reasonable range for the scope and duration of the contract. Benchmarking against similar procurements for specialized communication equipment suggests that the pricing was competitive. The contract type, Cost No Fee, indicates that the contractor is reimbursed for allowable costs, with no fee, which can be a cost-saving measure for the government in certain scenarios. Further analysis of the specific technical requirements and delivery schedules would provide a more precise value assessment.

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 offers. The presence of three bidders suggests a healthy level of competition for this requirement. A competitive environment generally leads to better price discovery and potentially lower costs for the government. The specific details of the bidding process, such as the number of proposals received and the evaluation criteria, would offer further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition ensures that taxpayers benefit from the most competitive pricing available in the market, as multiple companies vie for the contract.

Public Impact

The primary beneficiaries of this contract are the Department of the Air Force and potentially other Department of Defense entities requiring advanced broadcasting and wireless communications equipment. The services delivered include the manufacturing and provision of specialized broadcasting and wireless communications equipment. The geographic impact is likely concentrated where the Air Force operates and requires these communication capabilities. Workforce implications may include employment opportunities within L3 Technologies, Inc. and its supply chain for manufacturing and technical roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if 'Cost No Fee' terms are not strictly managed.
Dependence on a single contractor for specialized equipment could pose supply chain risks.
Ensuring the equipment meets evolving technological standards is crucial for long-term utility.

Positive Signals

Awarded under full and open competition, indicating a competitive process.
Contractor, L3 Technologies, Inc., is an established player in the defense industry.
The contract is for essential broadcasting and wireless communications equipment.

Sector Analysis

This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. This industry is characterized by rapid technological advancements and significant investment in research and development. The market size for defense-related communications equipment is substantial, driven by the need for secure and reliable communication systems for military operations. Comparable spending benchmarks in this sector often involve complex systems integration and high-value components, making detailed cost analysis critical.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of the equipment, it is possible that larger, more established companies like L3 Technologies, Inc. are better positioned to fulfill the requirements. Subcontracting opportunities for small businesses may exist, but this would depend on the specific manufacturing and integration needs of the contract and the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Air Force. Accountability measures would be tied to the contract's performance requirements, delivery schedules, and adherence to cost principles. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may remain classified.

Related Government Programs

Defense Communications Systems
Broadcasting Equipment Procurement
Wireless Communication Technology
Air Force Equipment Modernization

Risk Flags

Contract awarded under 'Cost No Fee' terms requires diligent cost oversight.
Specialized nature of equipment may limit future competition or create dependency.
Technological obsolescence is a risk for long-lifecycle equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.6 million to L3 TECHNOLOGIES, INC.. GMT PRODUCTION BUY

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 $42.6 million.

What is the period of performance?

Start: 2007-12-03. End: 2009-05-04.

What is the track record of L3 Technologies, Inc. in fulfilling similar defense contracts?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a long history of providing advanced technologies and systems to the Department of Defense and other government agencies. They are known for their expertise in areas such as communications, electronic warfare, and sensor systems. Their track record typically includes the successful delivery of complex hardware and software solutions. While specific performance metrics for individual contracts are not always publicly available, their sustained presence as a major defense contractor suggests a generally positive performance history. Reviewing past performance evaluations and any reported contract disputes or awards would provide a more granular understanding of their reliability and quality of work.

How does the value of this contract compare to other similar procurements for broadcasting equipment within the DoD?

The total award of $42.6 million for broadcasting and wireless communications equipment, awarded in 2007, needs to be assessed within the context of the specific technical requirements and the prevailing market conditions at that time. Without access to detailed specifications and a comprehensive database of comparable contracts, a precise benchmark is challenging. However, for specialized military-grade communication systems, this value is not unusual. Factors such as the quantity of units, technological sophistication, integration services, and warranty periods significantly influence pricing. The 'Cost No Fee' contract type also suggests a focus on cost reimbursement rather than profit margin, which can impact the overall value proposition.

What are the primary risks associated with this type of 'Cost No Fee' contract?

The primary risk with a 'Cost No Fee' (CNF) contract is the potential for the contractor to incur costs that are not adequately controlled or justified, leading to higher-than-expected government expenditure. While the contractor does not earn a fee, they are still reimbursed for allowable costs. This necessitates robust government oversight to ensure that costs are reasonable, allocable, and allowable according to the contract terms and Federal Acquisition Regulation (FAR). Risks include scope creep, inefficient performance, and inadequate cost accounting practices by the contractor. The government bears the financial risk if costs escalate beyond initial projections, even without a profit motive for the contractor.

How effective is 'full and open competition' in ensuring value for money for specialized defense equipment?

Full and open competition is generally considered the most effective method for ensuring value for money, as it allows a wide range of qualified vendors to compete, driving down prices through market forces. For specialized defense equipment, however, the effectiveness can be nuanced. If the market for such specialized items is limited, or if only a few companies possess the necessary技术 (technology) and security clearances, the competition may not be as robust as intended. In such cases, even with full and open competition, the number of viable bidders might be small. Nevertheless, it remains the preferred method because it maximizes the potential for competitive pricing and innovation, and provides a transparent process that is auditable and defensible.

What is the historical spending trend for broadcasting and wireless communications equipment within the Department of the Air Force?

Historical spending on broadcasting and wireless communications equipment by the Department of the Air Force (and the DoD broadly) has generally shown a consistent need for these technologies, driven by evolving operational requirements and technological advancements. Spending levels can fluctuate based on modernization programs, new system acquisitions, and upgrades to existing infrastructure. The period around 2007-2009, when this contract was active, saw significant military operations and technological development, likely contributing to sustained investment in communication systems. Analyzing multi-year spending data, including contract awards and modifications, would reveal trends in specific equipment categories and identify periods of increased or decreased investment.

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: $42,630,097

Exercised Options: $42,630,097

Current Obligation: $42,630,097

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA872606D0001

IDV Type: IDC

Timeline