DoD's $186.7M contract for miscellaneous equipment modification awarded to L-3 Communications in 2006

Contract Overview

Contract Amount: $10,889,146 ($10.9M)

Contractor: L-3 Communications Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2006-05-09

End Date: 2007-04-30

Contract Duration: 356 days

Daily Burn Rate: $30.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200608!001273!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !USZA2203D0006 !A!N! !Y!7287 ! !20060509!20070430!186729133!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!5749 BRIAR HILL RD !LEXINGTON !KY!40516!46027!067!21!LEXINGTON-FAYETTE !FAYETTE !KENTUCKY !+000011000000!N!N!000000000000!K099!MODIFICATION OF EQ/MISCELLANEOUS EQUIPMENT !S1 !SERVICES !000 !NOT DISCERNABLE !488190!E! !5!B!S! ! !D!20060930!B! ! !B! !A!U!R!2!001!B! !C!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $10.9 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P. for work described as: 200608!001273!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !USZA2203D0006 !A!N! !Y!7287 ! !20060509!20070430!186729133!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!5749 BRIAR HILL RD !LEXINGTON !KY!40516!46027!067!21!LEXINGTON-FAYETTE !FAYE… Key points: 1. Contract value of $186.7M for equipment modification suggests significant scope or complexity. 2. Awarded to L-3 Communications, a major defense contractor, indicating established capabilities. 3. Contract duration of approximately one year (May 2006 - April 2007) implies a focused project. 4. The 'Cost Plus Award Fee' pricing structure incentivizes performance but can lead to higher costs. 5. Awarded under full and open competition, suggesting a potentially competitive bidding process. 6. The North American Industry Classification System (NAICS) code 488190 points to support activities for air transportation. 7. The contract was awarded by U.S. Special Operations Command, highlighting its strategic importance.

Value Assessment

Rating: fair

The contract value of $186.7 million for a one-year period for miscellaneous equipment modification appears substantial. Without specific details on the nature of the modifications or the equipment involved, it is difficult to benchmark against similar contracts. The 'Cost Plus Award Fee' (CPAF) contract type, while allowing for performance incentives, can sometimes lead to costs exceeding fixed-price contracts if not managed carefully. The total award amount of $186,729,133 suggests a significant undertaking for the U.S. Special Operations Command.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The data does not specify the number of bidders, but this procurement method generally aims to foster competition, which can lead to better pricing and innovation. The fact that it was competed broadly suggests that the government sought the best value from the market.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the government is not limited to a single provider, potentially saving taxpayer funds.

Public Impact

The primary beneficiary is the U.S. Special Operations Command, receiving modified equipment to support its operations. Services delivered include the modification of equipment, likely enhancing its capabilities or readiness. The geographic impact is centered around the U.S. Special Operations Command's operational areas. Workforce implications would involve skilled technicians and engineers employed by L-3 Communications and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee (CPAF) structure can lead to cost overruns if not closely monitored, potentially increasing the final cost to taxpayers.
Lack of specific details on the equipment modified makes it difficult to assess the true value and necessity of the modifications.
The relatively short one-year duration for such a large contract value might indicate a specific, time-sensitive project or a series of smaller modifications bundled together.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
L-3 Communications is a large, established defense contractor with a track record in complex projects.
The contract aims to enhance specialized equipment for U.S. Special Operations Command, supporting critical national security missions.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically related to equipment modification and support services. The market for defense contracting is substantial, with significant government spending allocated to maintaining and upgrading military assets. Contracts like this are crucial for ensuring that specialized units like SOCOM have the most effective and up-to-date equipment. Benchmarking this spending is challenging without knowing the exact nature of the modifications, but it represents a significant investment in specialized capabilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). As a large prime contract awarded to L-3 Communications, there may be subcontracting opportunities for small businesses, but this is not explicitly detailed in the provided data. The absence of a small business set-aside suggests the requirement was likely beyond the scope or capability typically addressed by small business set-asides.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Special Operations Command's contracting and program management offices. Accountability measures are inherent in the Cost Plus Award Fee structure, which includes performance metrics and award fees tied to achieving specific objectives. Transparency is generally maintained through contract award databases, though specific project details might be classified or sensitive due to the nature of SOCOM operations. Inspector General jurisdiction would apply for any investigations into fraud, waste, or abuse.

Related Government Programs

Special Operations Forces Equipment Procurement
Defense Logistics and Support Services
Aerospace and Defense Manufacturing
Military Equipment Modernization
Department of Defense Contracting

Risk Flags

Cost Plus Award Fee (CPAF) contract type requires careful monitoring to control costs.
Lack of specific details on equipment and modifications limits full value assessment.
Potential for scope creep in complex modification projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.9 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.. 200608!001273!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !USZA2203D0006 !A!N! !Y!7287 ! !20060509!20070430!186729133!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!5749 BRIAR HILL RD !LEXINGTON !KY!40516!46027!067!21!LEXINGTON-FAYETTE !FAYETTE !KENTUCKY !+000011000000!N!N!000000000000!K099!MODIFICATION OF EQ/MISCELLANEOUS EQUIPMENT !S1 !SERVICES !000 !NOT DISCERNABLE !488190!E! !5!B!S! ! !D!200

Who is the contractor on this award?

The obligated recipient is L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $10.9 million.

What is the period of performance?

Start: 2006-05-09. End: 2007-04-30.

What specific types of equipment were modified under this contract, and what was the nature of the modifications?

The provided data indicates the contract was for 'MODIFICATION OF EQ/MISCELLANEOUS EQUIPMENT' under NAICS code 488190 (Other Support Activities for Air Transportation). However, the specific types of equipment and the exact nature of the modifications are not detailed. Given the awarding agency is U.S. Special Operations Command (USSOCOM), the equipment likely pertains to specialized assets used in special operations, potentially including aircraft, vehicles, communication systems, or other mission-critical gear. The modifications could range from upgrades to enhance performance, integration of new technologies, or refurbishment to extend service life. Without further documentation, the precise scope remains unspecified.

How did L-3 Communications Integrated Systems L.P. compare to other bidders in terms of technical proposals and pricing?

The data confirms the contract was awarded under 'full and open competition' (ct=FULL AND OPEN COMPETITION) and lists L-3 Communications Integrated Systems L.P. as the contractor (co). However, the specific details regarding the number of bidders, their respective technical proposals, and pricing structures are not provided in this dataset. Full and open competition implies that multiple bids were likely received, and the selection process would have involved evaluating these bids based on criteria outlined in the solicitation. L-3 Communications was presumably selected as the best value offeror, but the comparative analysis of other bids is not publicly available in this summary.

What were the key performance metrics and award fee criteria used for this Cost Plus Award Fee (CPAF) contract?

The contract type is specified as 'COST PLUS AWARD FEE' (pt=COST PLUS AWARD FEE). CPAF contracts typically include a base fee plus an award fee that is determined based on the contractor's performance against pre-defined criteria. These criteria are usually outlined in the contract's Performance Work Statement (PWS) and can include factors such as timeliness of delivery, quality of work, technical performance, cost control, and customer satisfaction. While the specific metrics for this $186.7 million contract are not detailed in the provided data, they would have been crucial for USSOCOM to incentivize L-3 Communications to achieve optimal results in the equipment modification process.

What is the historical spending pattern for similar equipment modification services by USSOCOM or the Department of Defense?

Historical spending on equipment modification services by USSOCOM and the broader Department of Defense (DoD) is substantial and varies significantly based on the type of equipment, technological advancements, and operational tempo. Contracts for modifications can range from minor upgrades costing thousands to major overhauls and system integrations costing hundreds of millions. For specialized units like USSOCOM, spending on modifying unique assets to maintain a technological edge is a consistent requirement. While this specific $186.7 million contract in 2006-2007 is a data point, a comprehensive analysis would require examining spending trends across multiple fiscal years, different service branches, and various types of equipment modifications to identify patterns and benchmarks.

What are the potential risks associated with a Cost Plus Award Fee contract for complex equipment modifications?

Cost Plus Award Fee (CPAF) contracts, while offering flexibility and incentivizing performance, carry inherent risks. A primary risk is that the final cost can exceed initial estimates, as the contractor is reimbursed for allowable costs plus an award fee. If the award fee criteria are not tightly defined or if oversight is insufficient, costs can escalate beyond what might be achieved under a fixed-price contract. For complex equipment modifications, scope creep is another significant risk; changes or additions to the original requirements can increase costs and extend timelines. Ensuring robust government oversight, clear performance metrics, and effective negotiation of the award fee structure are critical to mitigating these risks and ensuring value for taxpayer money.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 5749 BRIAR HILL RD, LEXINGTON, KY, 06

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: USZA2203D0006

IDV Type: IDC

Timeline