DoD's $186.7M contract for miscellaneous equipment modification awarded to L-3 Communications shows mixed value and competition

Contract Overview

Contract Amount: $35,258,928 ($35.3M)

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

Awarding Agency: Department of Defense

Start Date: 2006-08-01

End Date: 2010-10-17

Contract Duration: 1,538 days

Daily Burn Rate: $22.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200611!001691!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !USZA2203D0006 !A!N! !Y!7348 ! !20060801!20100911!186729133!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!5749 BRIAR HILL RD !LEXINGTON !KY!40516!46027!067!21!LEXINGTON-FAYETTE !FAYETTE !KENTUCKY !+000015595062!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 $35.3 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P. for work described as: 200611!001691!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !USZA2203D0006 !A!N! !Y!7348 ! !20060801!20100911!186729133!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!5749 BRIAR HILL RD !LEXINGTON !KY!40516!46027!067!21!LEXINGTON-FAYETTE !FAYE… Key points: 1. The contract's value proposition is unclear due to a lack of detailed performance metrics and benchmarking against similar services. 2. Competition was full and open, but the number of bidders is not specified, leaving potential for price discovery concerns. 3. The contract carries a 'Cost Plus Award Fee' structure, which can incentivize contractors but may also lead to higher costs if not managed closely. 4. Performance context is limited, with 'Modification of Equipment/Miscellaneous Equipment' being a broad category. 5. The contract falls under 'Other Support Activities for Air Transportation' within the broader defense sector. 6. No small business set-aside was utilized, and subcontracting data is not readily available.

Value Assessment

Rating: fair

The total award amount of $186.7 million over approximately four years for 'Modification of Equipment/Miscellaneous Equipment' is substantial. However, without specific details on the nature of the modifications, the quantity of equipment, or the labor hours involved, it is difficult to benchmark this against similar contracts. The 'Cost Plus Award Fee' (CPA) contract type suggests that performance incentives were in place, but the effectiveness of these incentives in driving value for money is not evident from the provided data. The lack of detailed performance metrics makes a definitive value assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition.' While this indicates that all responsible sources were permitted to submit offers, the specific number of bidders is not provided. A higher number of bidders typically leads to more robust price competition and potentially better pricing for the government. The absence of this detail limits the assessment of how effectively competition drove down costs or ensured the best value.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it maximizes the pool of potential offerors, theoretically leading to more competitive pricing and a wider range of innovative solutions.

Public Impact

The primary beneficiary is the U.S. Special Operations Command (USSOCOM), which receives modified equipment essential for its operations. Services delivered include the modification and enhancement of miscellaneous equipment, likely supporting specialized military functions. The geographic impact is primarily within the United States, with the contractor based in Kentucky. Workforce implications include employment opportunities at L-3 Communications Integrated Systems L.P. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if performance objectives are not tightly managed.
Lack of specific details on the 'modifications' makes it difficult to assess the true value and necessity of the work.
Limited transparency on the number of bidders in the full and open competition raises questions about the extent of price discovery.
The broad nature of 'Miscellaneous Equipment' could mask inefficiencies or scope creep over the contract's duration.

Positive Signals

Awarded through full and open competition, indicating an effort to solicit a wide range of potential contractors.
The contract was awarded to L-3 Communications Integrated Systems L.P., a known defense contractor with established capabilities.
The 'Award Fee' component suggests an incentive structure aimed at rewarding superior performance, potentially leading to higher quality outcomes.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically related to support services for military equipment. The market for defense contracting is characterized by significant government spending, often involving complex and specialized requirements. Contracts for equipment modification and sustainment are crucial for maintaining the operational readiness of military assets. Benchmarking this contract's value is challenging without more specific details on the type of equipment and modifications, but the total value suggests a significant undertaking within USSOCOM's support infrastructure.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'SB' not being present in relevant fields. Furthermore, the data does not provide specific information regarding subcontracting plans or achievements with small businesses. This suggests that the primary contract was awarded to a large business, and the extent of small business participation through subcontracting remains unquantified based on this record.

Oversight & Accountability

Oversight for this contract would fall under the U.S. Special Operations Command (USSOCOM) and the Department of Defense. As a Cost Plus Award Fee contract, there should be defined performance metrics and evaluation criteria against which the award fee is determined. Transparency regarding the specific oversight mechanisms, accountability measures, and the Inspector General's involvement would require further investigation into USSOCOM's contracting practices and reporting.

Related Government Programs

USSOCOM Equipment Sustainment Contracts
Department of Defense Miscellaneous Equipment Modification Services
Air Transportation Support Services Contracts
Cost Plus Award Fee Defense Contracts

Risk Flags

Lack of specific details on equipment and modifications
Ambiguity in competition level due to unspecified number of bidders
Limited transparency on performance metrics for CPAF contract
Absence of small business subcontracting data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.3 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.. 200611!001691!9700!H92222!USSOCOM HQ, DIR. OF PROCUREMENT !USZA2203D0006 !A!N! !Y!7348 ! !20060801!20100911!186729133!008898884!008898843!N!L-3 COMMUNICATIONS CORPORATION!5749 BRIAR HILL RD !LEXINGTON !KY!40516!46027!067!21!LEXINGTON-FAYETTE !FAYETTE !KENTUCKY !+000015595062!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 $35.3 million.

What is the period of performance?

Start: 2006-08-01. End: 2010-10-17.

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

The provided data classifies the service as 'MODIFICATION OF EQ/MISCELLANEOUS EQUIPMENT' and the Product Service Code (PSC) as '488190' (Other Support Activities for Air Transportation). However, it does not specify the exact types of equipment or the technical details of the modifications performed. This level of detail is typically found in the contract's statement of work (SOW) or task orders, which are not included in this summary data. Understanding the specifics would be crucial for assessing the contract's necessity, complexity, and value.

How many bids were received for this 'Full and Open Competition' contract?

The data indicates that the contract was awarded under 'FULL AND OPEN COMPETITION.' However, it does not specify the number of bids received. The 'Number of Offers' field is listed as '1', which typically refers to the number of offers received for a specific modification or task order, not necessarily the initial solicitation. A single offer in a competitive solicitation can sometimes indicate a lack of adequate competition or a sole-source justification that was not fully captured. Without knowing the number of bidders for the original award or subsequent modifications, it's difficult to fully assess the competitive landscape.

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

The contract type is identified as 'COST PLUS AWARD FEE' (CPAF). CPAF contracts involve the government reimbursing the contractor for allowable costs and providing a base fee, plus an award amount based on performance against pre-defined criteria. The specific performance criteria, targets, and the methodology for calculating the award fee are not detailed in the provided summary data. These details would typically be outlined in the contract's Statement of Work (SOW) and the contract clauses. Understanding these criteria is essential for evaluating whether the award fee truly reflected exceptional performance or simply met minimum requirements.

What is the historical spending trend for similar 'Miscellaneous Equipment Modification' services by USSOCOM?

The provided data represents a single contract award of $186.7 million to L-3 Communications Integrated Systems L.P. for miscellaneous equipment modification services from 2006 to 2010. To establish a historical spending trend, one would need to analyze spending data for similar services (e.g., PSC 488190 or related codes) across multiple fiscal years and potentially other agencies or commands within the Department of Defense. This single data point does not provide sufficient information to discern trends, patterns of increasing or decreasing investment, or the overall market size for such services.

What is the track record of L-3 Communications Integrated Systems L.P. in fulfilling similar defense modification contracts?

L-3 Communications Integrated Systems L.P. (now part of L3Harris Technologies) is a well-established defense contractor with a significant history of performing complex modifications and integration services for military platforms and equipment. While this specific contract record shows a substantial award, a comprehensive assessment of their track record would involve reviewing numerous other contracts, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any past performance issues or successes across various government agencies. This single contract provides limited insight into their broader capabilities and reliability.

How does the $186.7 million total award compare to the initial estimated value or ceiling of the contract?

The provided data shows a 'Total Obligated Amount' (TOA) of $186,729,133 and a 'Base and Exercised Value' (BEV) of $155,950,620. The difference between these figures ($30,778,513) likely represents exercised options or award fee amounts. The data does not explicitly state the initial contract ceiling or estimated value at the time of award. Therefore, a direct comparison to assess if the final award significantly exceeded initial estimates or utilized the full ceiling is not possible with the given information.

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