DoD's $32.4M IT contract for SINCGARS communications equipment awarded to ITT Industries, Inc. with no competition
Contract Overview
Contract Amount: $32,386,927 ($32.4M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2001-09-28
End Date: 2006-11-30
Contract Duration: 1,889 days
Daily Burn Rate: $17.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 200112!004799!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0701CC206 !A!N!*!N! !20010928!20060930!005420245!005420245!001216845!N!ITT INDUSTRIES, INC !1919 WEST COOK ROAD !FORT WAYNE !IN!46801!25000!003!18!FORT WAYNE !ALLEN !INDIANA !+000001230690!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !1GRU!SINCGARS !334290!*!*!3! ! ! !*!*!*!B!*!*!A! !D !U!U!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!
Place of Performance
Location: FORT WAYNE, ALLEN County, INDIANA, 46818
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $32.4 million to L3HARRIS TECHNOLOGIES, INC. for work described as: 200112!004799!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0701CC206 !A!N!*!N! !20010928!20060930!005420245!005420245!001216845!N!ITT INDUSTRIES, INC !1919 WEST COOK ROAD !FORT WAYNE !IN!46801!25000!003!18!FORT WAYNE !ALLEN… Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value for money. 2. The contract's duration of nearly 2 years and cost-plus-fixed-fee structure may incentivize cost overruns. 3. Lack of competition suggests potential for higher prices compared to a fully competed procurement. 4. The award to a single vendor limits opportunities for small businesses and diverse supplier participation. 5. Performance context is limited due to the absence of competitive benchmarks. 6. The contract falls within the 'Other Communications Equipment Manufacturing' NAICS code, indicating a specialized IT/defense sector.
Value Assessment
Rating: questionable
The contract's total value of $32.4 million over approximately two years, awarded on a sole-source basis, makes a direct value-for-money assessment challenging. Without competitive bids, it's difficult to benchmark pricing against market rates or similar contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while potentially necessary for complex or uncertain projects, can sometimes lead to higher overall costs if not managed rigorously, as the contractor is reimbursed for all allowable costs plus a fixed fee. The absence of competition means taxpayers may not have received the most advantageous pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed. This typically occurs when only one responsible source is available or capable of meeting the agency's needs. The lack of competition means there were no other bidders to compare against, and price discovery was limited to negotiations between the agency and the sole awardee. This approach can sometimes lead to higher prices than would be achieved in a competitive environment.
Taxpayer Impact: The sole-source nature of this award means taxpayers did not benefit from the price reductions and efficiencies typically driven by a competitive bidding process. This could result in a higher overall expenditure for the government.
Public Impact
The primary beneficiaries are the Department of Defense units requiring SINCGARS communication equipment. The contract delivers essential electronic and communication equipment, crucial for military operations. The geographic impact is likely national, supporting defense logistics and readiness across various military installations. Workforce implications may include specialized engineering and manufacturing roles at ITT Industries, Inc.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential taxpayer savings.
- Cost-plus-fixed-fee contract type can incentivize higher costs if not closely monitored.
- Lack of transparency in the procurement process due to no competition.
- Limited opportunity for small business participation as a prime contractor.
Positive Signals
- Award to an established contractor (ITT Industries, Inc.) suggests potential for reliable delivery.
- Contract addresses a specific, critical defense communication need (SINCGARS).
- Fixed fee component provides some cost certainty for the government compared to cost-plus-incentive-fee.
Sector Analysis
This contract falls within the broader Information Technology and Defense sectors, specifically focusing on 'Other Communications Equipment Manufacturing.' The market for military communications equipment is highly specialized, often dominated by a few large defense contractors capable of meeting stringent performance and security requirements. Spending in this area is driven by national security needs and technological advancements in battlefield communication systems. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of military-grade equipment and the limited number of qualified suppliers.
Small Business Impact
The contract was not set aside for small businesses, and the sole-source nature further limited opportunities for small business prime contractors. While the prime contractor, ITT Industries, Inc., may engage small businesses for subcontracting, the absence of a competitive set-aside means direct prime contracting opportunities for small businesses were non-existent in this procurement. This limits the direct economic benefit to the small business ecosystem from this specific award.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contract management and oversight bodies, such as the Defense Contract Management Agency (DCMA). Accountability measures would be defined by the contract terms, including reporting requirements and performance standards. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.
Related Government Programs
- SINCGARS Radio Systems
- Tactical Communications Equipment
- Department of Defense Procurement
- Military Electronics Manufacturing
- Sole-Source Defense Contracts
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Lack of competition
- Potential for cost overruns
Tags
defense, department-of-defense, itt-industries, l3harrris-technologies, communications-equipment, sincgars, sole-source, cost-plus-fixed-fee, information-technology, indiana, definitive-contract, engineering-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.4 million to L3HARRIS TECHNOLOGIES, INC.. 200112!004799!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0701CC206 !A!N!*!N! !20010928!20060930!005420245!005420245!001216845!N!ITT INDUSTRIES, INC !1919 WEST COOK ROAD !FORT WAYNE !IN!46801!25000!003!18!FORT WAYNE !ALLEN !INDIANA !+000001230690!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !1GRU!SINCGARS !334290!*!*!3! ! ! !*!*!*!B!*!*!A!
Who is the contractor on this award?
The obligated recipient is L3HARRIS TECHNOLOGIES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $32.4 million.
What is the period of performance?
Start: 2001-09-28. End: 2006-11-30.
What is the track record of ITT Industries, Inc. in fulfilling Department of Defense contracts, particularly for communication systems?
ITT Industries, Inc. (now part of L3Harris Technologies) has a long history of supplying the Department of Defense with various technologies, including communication systems. Their involvement with the SINCGARS (Second Generation Anti-Jamming Family of Systems) program indicates a deep understanding of this specific military communication requirement. Historically, major defense contractors like ITT have a mixed record, with successes in delivering complex systems but also facing scrutiny over cost, schedule, and performance on large programs. Specific performance data for this particular contract would be needed for a detailed assessment, but their established presence suggests a capacity to meet the technical demands of such procurements.
How does the $32.4 million contract value compare to other procurements for similar communication equipment?
Directly comparing the $32.4 million value is challenging without knowing the exact scope, quantity, and technological specifications of the SINCGARS equipment procured under this specific contract. Military communication systems, especially those with anti-jamming capabilities like SINCGARS, are highly specialized and can be significantly more expensive than commercial equivalents. However, given the sole-source nature and the cost-plus-fixed-fee structure, it is plausible that a competitively procured contract for similar equipment might have yielded a lower price. Benchmarking against other sole-source awards for specialized defense electronics could provide a more relevant, though still imperfect, comparison.
What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for defense electronics?
The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for defense electronics are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices and reduced innovation as the contractor faces no direct market alternatives. The government relies heavily on negotiation and oversight to ensure fair pricing. Secondly, the CPFF structure reimburses the contractor for all allowable costs plus a fixed fee. While the fee provides some cost certainty, the reimbursement of costs can incentivize the contractor to incur higher expenses than necessary if oversight is not robust, potentially leading to cost overruns and reduced value for money. Effective contract management and stringent auditing are crucial to mitigate these risks.
What is the significance of the SINCGARS system within the DoD's communication architecture?
The SINCGARS (Second Generation Anti-Jamming Family of Systems) is a critical component of the U.S. military's tactical battlefield communication architecture. It provides secure, reliable, and jam-resistant voice and data communications for ground forces, enabling command and control, situational awareness, and coordination across various units and platforms. Its ability to hop frequencies rapidly makes it resistant to electronic jamming, a crucial capability in contested electromagnetic environments. The continued procurement and sustainment of SINCGARS reflect its enduring importance in ensuring operational effectiveness for the Army and other branches operating in tactical scenarios.
How has spending on 'Other Communications Equipment Manufacturing' evolved over the years for the Department of Defense?
Spending on 'Other Communications Equipment Manufacturing' within the Department of Defense can fluctuate significantly based on modernization cycles, emerging threats, and specific program requirements. While this specific contract from 2001-2006 represents a snapshot, overall DoD spending in this category is influenced by the need for advanced, secure, and interoperable communication systems. Periods of intense conflict or rapid technological advancement often see increased investment. Conversely, budget constraints or the fielding of mature systems might lead to reduced spending. Analyzing historical data from the DoD's procurement databases would reveal trends, major programs driving spending, and the impact of strategic shifts on this sector.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc (UEI: 004203337)
Address: 7310 INNOVATION BLVD, FORT WAYNE, IN, 46818
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2001-09-28
Current End Date: 2006-11-30
Potential End Date: 2006-11-30 00:00:00
Last Modified: 2021-11-03
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