DoD's $11.4M contract for air transportation support awarded to L-3 Communications Integrated Systems L.P

Contract Overview

Contract Amount: $11,373,438 ($11.4M)

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

Awarding Agency: Department of Defense

Start Date: 2007-08-21

End Date: 2008-08-20

Contract Duration: 365 days

Daily Burn Rate: $31.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: CER 07-419 CMT

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $11.4 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P. for work described as: CER 07-419 CMT Key points: 1. Contract awarded on a cost-plus-award-fee basis, which can incentivize contractor performance but also carries potential for cost overruns. 2. The contract was fully and openly competed, suggesting a competitive market for these services. 3. The duration of 365 days indicates a relatively short-term requirement. 4. The contract was awarded by the U.S. Special Operations Command, highlighting its use in specialized military operations. 5. The North American Industry Classification System (NAICS) code 488190 points to support activities for air transportation. 6. The contract's value of approximately $11.4 million is moderate for a defense support contract.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns or comparisons to similar, contemporaneous contracts for specialized air transportation support. The cost-plus-award-fee structure means the final cost could vary based on performance. However, the contract value of $11.4 million for a one-year period of performance appears within a reasonable range for specialized support services, though a deeper dive into the specific services rendered would be needed for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is generally expected to yield fair market prices and encourage efficiency from the winning contractor. The number of bidders is not specified, but the designation implies a robust competition.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically drives down costs through market forces, ensuring the government receives competitive pricing for the services procured.

Public Impact

This contract directly supports U.S. Special Operations Command's aviation readiness and operational capabilities. The services provided likely ensure the efficient and effective functioning of air transportation assets critical for special operations missions. The contract's impact is primarily on military operational effectiveness rather than broad public services. Workforce implications would be within the contractor's organization, potentially involving specialized aviation support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-award-fee contracts can sometimes lead to higher final costs if not managed tightly, as the government bears the cost plus an incentive fee.
Lack of specific performance metrics or detailed service descriptions makes it difficult to assess the true value and efficiency achieved.

Positive Signals

Awarded under full and open competition, suggesting a competitive environment that should have driven a fair price.
The cost-plus-award-fee structure, if managed effectively, can incentivize the contractor to meet or exceed performance standards.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically related to aviation support services. The market for such services is characterized by specialized technical expertise and often involves government contracts. Comparable spending benchmarks would typically be found within defense budgets allocated for aviation maintenance, logistics, and operational support, which can range from millions to billions depending on the scope and duration.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The prime contractor, L-3 Communications Integrated Systems L.P., would determine any subcontracting opportunities based on their own business needs and procurement strategies.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command contracting and program management offices. The cost-plus-award-fee structure necessitates close monitoring of costs and performance to ensure the award fee is justified and that the overall contract remains within budget and meets objectives. Transparency would depend on the agency's policies regarding the release of contract details and performance reports.

Related Government Programs

Defense Aviation Support Contracts
Special Operations Command Procurement
Air Transportation Services
Cost-Plus-Award-Fee Contracts

Risk Flags

Cost-Plus-Award-Fee structure requires diligent oversight to manage costs and ensure value.
Limited contract duration may indicate a tactical need rather than a strategic capability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.4 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.. CER 07-419 CMT

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 $11.4 million.

What is the period of performance?

Start: 2007-08-21. End: 2008-08-20.

What specific air transportation support services were provided under this contract?

The contract's NAICS code (488190) indicates 'Other Support Activities for Air Transportation.' While the specific details are not provided in the abbreviated data, this typically encompasses a range of services such as aircraft maintenance, repair, overhaul, logistical support, ground handling, air traffic control support, and potentially specialized operational support for aviation assets. For the U.S. Special Operations Command, these services are likely tailored to support unique operational requirements, possibly involving specialized aircraft or demanding mission profiles, ensuring the readiness and deployability of their aviation assets.

How does the cost-plus-award-fee (CPAF) structure typically impact contractor incentives and government costs?

The Cost-Plus-Award-Fee (CPAF) structure allows the contractor to recover all allowable costs incurred, plus a base fee and an award fee. The base fee is a fixed percentage of the estimated cost, while the award fee is earned based on the contractor's performance against pre-defined criteria. This structure incentivizes the contractor to perform well and meet or exceed objectives, as a higher award fee can be earned. However, it also means the government bears the risk of cost overruns, as all allowable costs are reimbursed. Effective oversight and clearly defined performance metrics are crucial to ensure the government receives good value and that the award fee is earned legitimately, rather than simply inflating the final cost.

What is the significance of this contract being awarded by U.S. Special Operations Command (SOCOM)?

An award from SOCOM signifies that the contract supports highly specialized and often sensitive military operations. SOCOM's requirements are typically unique, demanding advanced capabilities, high levels of readiness, and often operate in complex environments. Contracts awarded by SOCOM, like this one for air transportation support, are critical for enabling the effectiveness of elite military units. The nature of SOCOM's missions means that the services procured are likely to be mission-critical, requiring a high degree of reliability, technical expertise, and responsiveness from the contractor.

What does 'full and open competition' imply for the pricing and quality of services received?

Full and open competition means that all responsible sources were permitted to submit a bid or proposal, and the contract was awarded based on the best value to the government. This process is designed to foster a competitive environment where multiple companies vie for the contract. Consequently, it generally leads to more competitive pricing as contractors strive to offer the most attractive bid. It also implies that the government had a range of options and could select the solution that best met its technical requirements and cost objectives, theoretically leading to higher quality services and better overall value for the taxpayer.

How does the contract's duration of 365 days affect its strategic importance?

A contract duration of 365 days, as seen here, typically indicates a short-term or tactical requirement rather than a long-term strategic program. This suggests the services might be needed to fulfill an immediate operational need, cover a gap in organic capabilities, or support a specific mission phase. While important for its immediate purpose, a one-year contract usually doesn't represent a fundamental shift in long-term strategy or capability development. It implies that the need may be recurring, subject to re-competition, or could be absorbed by other means in the future. The short duration also limits the contractor's long-term investment horizon for this specific contract.

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: $11,373,438

Exercised Options: $11,373,438

Current Obligation: $11,373,438

Contract Characteristics

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: USZA2203D0006

IDV Type: IDC

Timeline