L3 Technologies awarded $14.4M sole-source IDIQ for Link 16 systems, raising value-for-money questions

Contract Overview

Contract Amount: $14,408,370 ($14.4M)

Contractor: L3 Technologies, Inc.

Awarding Agency: General Services Administration

Start Date: 2023-08-24

End Date: 2026-03-10

Contract Duration: 929 days

Daily Burn Rate: $15.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: L3 SOLE SOURCE IDIQ TO16 NIWC ATLANTIC LINK 16

Place of Performance

Location: HANAHAN, BERKELEY County, SOUTH CAROLINA, 29410

State: South Carolina Government Spending

Plain-Language Summary

General Services Administration obligated $14.4 million to L3 TECHNOLOGIES, INC. for work described as: L3 SOLE SOURCE IDIQ TO16 NIWC ATLANTIC LINK 16 Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. The contract is for Link 16 systems, a critical component for military communications. 3. Delivery order issued under an existing IDIQ, suggesting a pre-existing relationship with the contractor. 4. The contract duration extends to March 2026, indicating a medium-term need for these systems. 5. The firm-fixed-price contract type aims to control costs, but sole-source nature may negate benefits. 6. The awardee, L3 Technologies, is a significant defense contractor with a history in communications systems.

Value Assessment

Rating: questionable

The $14.4 million award for Link 16 systems is difficult to benchmark due to its sole-source nature. Without competitive bids, it's challenging to ascertain if this represents a fair market price. The value proposition is further obscured by the lack of transparency inherent in non-competed contracts. While the firm-fixed-price structure offers some cost certainty, the absence of competition raises concerns about potential overpayment compared to what could be achieved through a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning L3 Technologies was the only bidder considered. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors vying for the contract. The lack of competition means there was no opportunity for price discovery through market forces, and it limits the government's ability to explore alternative solutions or potentially lower prices from other qualified suppliers.

Taxpayer Impact: Taxpayers may be paying a premium for these Link 16 systems due to the absence of competitive bidding. The government missed an opportunity to leverage market competition to secure the best possible price and value.

Public Impact

The primary beneficiaries are likely military units relying on secure and reliable data links for command and control. The contract delivers essential Link 16 communication systems, crucial for battlefield awareness and interoperability. The geographic impact is likely global, supporting deployed forces wherever Link 16 is utilized. Workforce implications may include specialized technical roles for installation, maintenance, and support of the systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
Lack of transparency in the procurement process makes it difficult to assess true value for money.
Reliance on a single contractor for critical communication systems could pose supply chain risks.
The contract's duration suggests a long-term dependency on this specific technology and vendor.

Positive Signals

Firm-fixed-price contract provides cost certainty for the awarded scope of work.
Awardee L3 Technologies is an established provider of defense communication systems, suggesting technical capability.
The contract is a delivery order under an existing IDIQ, implying a streamlined process for a known requirement.

Sector Analysis

The defense communications sector is characterized by high technological barriers to entry and significant government investment. Link 16 systems are a mature but vital technology for military operations, enabling secure data sharing among various platforms. Spending in this area is driven by the need for interoperability and enhanced situational awareness. While L3 Technologies is a major player, the market also includes other large defense contractors, making the sole-source award notable.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. There is no explicit information regarding subcontracting plans for small businesses. This sole-source award to a large prime contractor may limit opportunities for small businesses that could have participated in a competitive procurement or as subcontractors on a larger, competed award.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the awarding agency, General Services Administration (GSA), and the specific program office within the Department of Defense that utilizes the Link 16 systems. Transparency is limited due to the sole-source nature. Accountability rests with the contractor to deliver according to the firm-fixed-price terms and with the government to monitor performance and ensure compliance with the contract requirements.

Related Government Programs

Link 16 Tactical Data Link Systems
Military Communications Networks
Command and Control Systems
Defense Information Technology

Risk Flags

Sole-source procurement
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $14.4 million to L3 TECHNOLOGIES, INC.. L3 SOLE SOURCE IDIQ TO16 NIWC ATLANTIC LINK 16

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

Start: 2023-08-24. End: 2026-03-10.

What is the track record of L3 Technologies in delivering Link 16 systems or similar communication equipment to the government?

L3 Technologies, now part of L3Harris Technologies, has a significant history in providing advanced communication, electronic warfare, and sensor systems to the U.S. military and allied nations. They have been involved in various aspects of tactical data link systems, including the development, integration, and sustainment of Link 16 terminals and related software. Their experience encompasses a wide range of military platforms, suggesting a strong technical capability and understanding of the operational requirements for such systems. Past performance data, if available through government databases like the Contractor Performance Assessment Reporting System (CPARS), would provide more specific insights into their delivery timeliness, quality, and overall customer satisfaction on previous contracts.

How does the $14.4 million value compare to similar sole-source or competed contracts for Link 16 systems?

Direct comparison of this $14.4 million sole-source award is challenging without access to detailed contract data for similar procurements. Sole-source contracts inherently lack the price discovery mechanism of competition, making direct value-for-money assessments difficult. However, historical data on competed contracts for Link 16 components or integration services could serve as a benchmark. If similar systems or services were procured competitively for significantly less, it would indicate potential overpricing in this sole-source award. Conversely, if the scope of work is highly specialized or involves unique configurations, the price might be justified. Further analysis would require examining the specific technical requirements and quantities involved in this contract relative to others.

What are the primary risks associated with a sole-source award for critical communication systems like Link 16?

The primary risks associated with a sole-source award for critical communication systems like Link 16 include: 1) Inflated costs due to lack of competition, as the contractor faces less pressure to offer the lowest possible price. 2) Limited innovation, as the absence of multiple bidders may stifle the exploration of alternative or more advanced technological solutions. 3) Potential for vendor lock-in, creating a long-term dependency on a single supplier, which can complicate future upgrades or transitions. 4) Reduced transparency and oversight, making it harder for the government to ensure optimal value and identify potential inefficiencies. 5) Supply chain vulnerabilities if the sole provider experiences production issues or financial instability.

What is the strategic importance of Link 16 systems, and how does this contract support that mission?

Link 16 is a vital military tactical data link (TDL) that enables real-time, secure exchange of command and control (C2), intelligence, surveillance, and reconnaissance (ISR) information among diverse platforms, including aircraft, ships, ground vehicles, and command centers. Its strategic importance lies in enhancing battlefield situational awareness, improving coordination and interoperability among joint and coalition forces, and enabling faster, more informed decision-making. This $14.4 million contract, awarded to L3 Technologies, directly supports this mission by providing or sustaining these critical communication systems. Ensuring the availability and functionality of Link 16 is paramount for maintaining operational effectiveness in modern military engagements.

What are the historical spending patterns for Link 16 systems or similar communication equipment procured by the government?

Historical spending on Link 16 systems and related tactical data links has been substantial, reflecting their critical role in defense operations. Government agencies, particularly the Department of Defense, have consistently invested in these technologies to maintain communication superiority and interoperability. Spending often occurs through a mix of sole-source contracts for specialized upgrades or sustainment, and competed contracts for new system procurements or large-scale integrations. Analyzing past spending trends reveals a steady demand driven by technological evolution, platform modernization, and the need to support ongoing military operations globally. Fluctuations in spending can be linked to major defense programs, budget cycles, and evolving threat landscapes.

Industry Classification

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

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 47QFLA23Q0175

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

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

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: $14,408,370

Exercised Options: $14,408,370

Current Obligation: $14,408,370

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $341,450

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 47QFLA20D0014

IDV Type: IDC

Timeline