DoD Awards $68.8M for MH-60M Production Effort to L-3 Communications, Facing Limited Competition
Contract Overview
Contract Amount: $68,881,284 ($68.9M)
Contractor: L-3 Communications Integrated Systems L.P.
Awarding Agency: Department of Defense
Start Date: 2006-11-15
End Date: 2010-10-17
Contract Duration: 1,432 days
Daily Burn Rate: $48.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: MH-60M PRODUCTION EFFORT
Place of Performance
Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $68.9 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P. for work described as: MH-60M PRODUCTION EFFORT Key points: 1. Contract awarded to L-3 Communications Integrated Systems L.P. for MH-60M production. 2. The contract value is $68.8 million. 3. Awarded by the Department of Defense, U.S. Special Operations Command. 4. The contract type is Cost Plus Award Fee. 5. This effort falls under Other Support Activities for Air Transportation.
Value Assessment
Rating: fair
The Cost Plus Award Fee contract type allows for flexibility but can lead to higher costs if not managed tightly. Benchmarking against similar aviation production contracts is difficult without specific cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific details of the competition and how price was determined are not fully detailed here.
Taxpayer Impact: The $68.8 million awarded represents taxpayer funds allocated to a specific defense program, the cost-effectiveness of which depends on program execution and final product value.
Public Impact
Supports U.S. Special Operations Command's aviation capabilities. Contributes to the production of MH-60M helicopters, crucial for special operations missions. The contract duration of 1432 days indicates a significant, long-term production effort. Awarded to a single contractor, L-3 Communications Integrated Systems L.P.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contract type can incentivize higher spending.
- Limited insight into specific cost drivers and profit margins.
- Potential for cost overruns if performance incentives are not well-aligned with cost control.
Positive Signals
- Awarded under full and open competition.
- Supports critical special operations aviation assets.
- Long contract duration suggests sustained production and potential for economies of scale.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically related to aircraft production and support. Spending benchmarks for similar specialized helicopter production efforts can vary widely based on complexity and quantity.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors or partners in this contract. Further analysis would be needed to determine small business participation.
Oversight & Accountability
Oversight would typically be managed by the U.S. Special Operations Command contracting office, focusing on performance metrics and cost control under the Cost Plus Award Fee structure.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- U.S. Special Operations Command Programs
Risk Flags
- Cost Plus Award Fee contract type.
- Potential for cost overruns.
- Limited visibility into profit margins.
- Specialized nature of the product may limit competition in future procurements.
Tags
other-support-activities-for-air-transpo, department-of-defense, ky, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $68.9 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.. MH-60M PRODUCTION EFFORT
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 $68.9 million.
What is the period of performance?
Start: 2006-11-15. End: 2010-10-17.
What is the expected value delivered by the MH-60M helicopters produced under this contract, considering the $68.8 million investment?
The value lies in enhancing the U.S. Special Operations Command's capabilities with advanced MH-60M helicopters, essential for complex missions. Quantifying the exact return on investment is challenging, but the operational advantage and mission success enabled by these aircraft are significant factors in their perceived value.
What are the primary risks associated with the Cost Plus Award Fee structure for this MH-60M production effort?
The primary risks include potential cost overruns, as the contractor is reimbursed for allowable costs plus a fee that can be adjusted based on performance. Without stringent oversight and well-defined performance metrics, there's a risk that the government may pay more than necessary if cost control is not prioritized alongside performance.
How effective is the full and open competition process in ensuring the best value for taxpayer dollars in specialized defense production like the MH-60M?
Full and open competition is generally effective in promoting price discovery and encouraging multiple bidders to offer competitive proposals, potentially leading to better value. However, for highly specialized defense systems like the MH-60M, the pool of qualified bidders might be limited, and the complexity of the requirements could still necessitate careful evaluation beyond just the lowest price.
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
Financial Breakdown
Contract Ceiling: $68,881,284
Exercised Options: $68,881,284
Current Obligation: $68,881,284
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: USZA2203D0006
IDV Type: IDC
Timeline
Start Date: 2006-11-15
Current End Date: 2010-10-17
Potential End Date: 2010-10-17 00:00:00
Last Modified: 2011-02-04
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