GSA awards $35.3M sole-source IDIQ for wireless communications equipment to L3 Technologies

Contract Overview

Contract Amount: $35,334,451 ($35.3M)

Contractor: L3 Technologies, Inc.

Awarding Agency: General Services Administration

Start Date: 2024-07-02

End Date: 2026-05-01

Contract Duration: 668 days

Daily Burn Rate: $52.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: L3 SOLE SOURCE IDIQ TO35 MCSC LINK 16

Place of Performance

Location: STAFFORD, STAFFORD County, VIRGINIA, 22554

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $35.3 million to L3 TECHNOLOGIES, INC. for work described as: L3 SOLE SOURCE IDIQ TO35 MCSC LINK 16 Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. The contract is for wireless communications equipment, a critical but potentially high-cost sector. 3. A fixed-price contract type may offer cost certainty but could limit flexibility. 4. The contract duration of nearly two years suggests a sustained need for these services. 5. The award is a delivery order under an existing IDIQ, indicating a pre-established relationship. 6. The small business subcontracting plan is not applicable, suggesting no specific set-aside for small businesses.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source award is challenging without competitive data. The contract's value of $35.3 million over approximately two years for wireless communications equipment needs careful scrutiny. Without a competitive process, it's difficult to ascertain if the pricing reflects fair market value or if there were opportunities for cost savings through bidding. The fixed-price nature provides some predictability, but the absence of competition raises concerns about potential overpayment compared to a more open procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source IDIQ, meaning it was not competed. This approach is typically used when only one responsible source is available or authorized by statute. The lack of competition means that multiple vendors did not have the opportunity to bid, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Taxpayers may not benefit from the cost savings typically achieved through a competitive bidding process. The government may be paying a premium due to the absence of market forces driving down prices.

Public Impact

The primary beneficiary is L3 Technologies, Inc., the sole-source contractor. The contract will deliver wireless communications equipment, essential for various government operations. The geographic impact is likely focused on areas where GSA and its supported agencies require this equipment, with a specific mention of Virginia. Workforce implications are tied to L3 Technologies' internal operations and potential need for specialized personnel in manufacturing and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of competition may result in higher costs for taxpayers.
Reliance on a single vendor for critical equipment can pose supply chain risks.

Positive Signals

Fixed-price contract offers cost predictability for the government.
Award is a delivery order under an existing IDIQ, suggesting a streamlined process.
Contract supports essential wireless communications infrastructure.

Sector Analysis

The wireless communications equipment manufacturing sector is characterized by rapid technological advancements and significant R&D investment. This contract falls under NAICS code 334220, which includes establishments primarily engaged in manufacturing radio and television broadcasting and wireless communications equipment. The market is often dominated by a few large players due to high barriers to entry. Government spending in this area is crucial for maintaining secure and advanced communication networks, but competitive procurement is vital to ensure value for money.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. Consequently, there are no direct subcontracting implications for small businesses mandated by this specific award. The absence of a set-aside means that opportunities for small businesses to participate as prime contractors or through subcontracting are not explicitly prioritized in this procurement.

Oversight & Accountability

Oversight for this contract will be managed by the General Services Administration (GSA), specifically its Federal Acquisition Service. As a sole-source award, scrutiny on pricing and justification for the lack of competition is paramount. Transparency regarding the necessity of the sole-source approach and the contractor's performance against the contract terms will be key oversight elements. Inspector General involvement would typically be triggered by specific concerns or audits related to contract performance or financial integrity.

Related Government Programs

Defense Communications Equipment
Federal Information Technology Services
Wireless Network Infrastructure
Radio and Television Broadcasting Equipment

Risk Flags

Sole-source award lacks competitive justification.
Potential for above-market pricing due to lack of competition.
Dependency on a single vendor for critical equipment.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $35.3 million to L3 TECHNOLOGIES, INC.. L3 SOLE SOURCE IDIQ TO35 MCSC 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 $35.3 million.

What is the period of performance?

Start: 2024-07-02. End: 2026-05-01.

What is the justification for awarding this contract on a sole-source basis?

The provided data indicates this contract was awarded on a sole-source basis ('ct': 'NOT COMPETED'). The specific justification for this sole-source award is not detailed in the provided data snippet. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available, or in cases of urgent and compelling need where competition is not feasible. Without further documentation from the agency (General Services Administration in this case), the precise rationale remains unknown. This lack of competition is a significant factor in assessing the contract's value and potential risks.

How does the pricing of this contract compare to similar wireless communications equipment procurements?

Direct price comparison is difficult without access to detailed pricing structures and specific equipment specifications for similar contracts, especially given this is a sole-source award. However, the total award amount of $35.3 million over approximately 22 months (from July 2024 to May 2026) suggests an average annual value of roughly $16 million. Sole-source contracts inherently lack the downward price pressure that competition provides. Therefore, it is plausible that the unit costs or overall price for the equipment and services procured under this contract may be higher than if it had been competitively bid. A thorough value assessment would require benchmarking against market rates for comparable equipment and services, considering factors like quantity, technical specifications, and warranty.

What are the potential risks associated with a sole-source award for critical communication equipment?

Sole-source awards for critical communication equipment present several risks. Firstly, the lack of competition can lead to inflated prices, meaning taxpayers may not receive the best possible value for their investment. Secondly, it creates a dependency on a single vendor, which can introduce supply chain vulnerabilities. If L3 Technologies faces production issues, delivery delays, or financial instability, the government's access to essential communication capabilities could be jeopardized. Thirdly, without competitive pressure, there might be less incentive for the contractor to innovate or offer superior service levels. Finally, the absence of a competitive process makes it harder to ensure that the chosen solution represents the most technologically advanced or cost-effective option available in the market.

What is the historical spending pattern with L3 Technologies, Inc. for similar equipment under GSA?

The provided data snippet does not include historical spending patterns with L3 Technologies, Inc. or for similar equipment under GSA. To assess historical spending, one would need to access contract databases and search for previous awards to L3 Technologies, Inc. for wireless communications equipment or related services, particularly those issued by the General Services Administration. Analyzing past contract values, durations, and competition levels would provide context on the government's prior relationship with the contractor and whether this current award represents an increase or decrease in spending, or a shift in procurement strategy (e.g., from competitive to sole-source).

How does the contract type (Firm Fixed Price) impact risk and value for this sole-source award?

The Firm Fixed Price (FFP) contract type generally shifts the cost risk from the government to the contractor. This means L3 Technologies, Inc. is responsible for all costs incurred to deliver the specified wireless communications equipment. For the government, an FFP contract provides cost certainty, as the final price is established upfront. However, in the context of a sole-source award, this certainty comes at a potential cost. Without competition, the government cannot be assured that the fixed price represents the lowest achievable price. While the FFP protects against cost overruns by the contractor, the initial price itself might be higher than it would be in a competitive scenario, potentially diminishing the overall value proposition despite the risk transfer.

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: 47QFLA24Q0101

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $35,334,451

Exercised Options: $35,334,451

Current Obligation: $35,334,451

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $435,860

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