DOD's $136.6M LMST AN/USC-65 contract awarded to L3Harris Technologies, Inc. in 1995, with a 2008 expiration

Contract Overview

Contract Amount: $136,610,943 ($136.6M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 1995-07-31

End Date: 2008-04-30

Contract Duration: 4,657 days

Daily Burn Rate: $29.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LMST AN/USC-65

Place of Performance

Location: PALM BAY, BREVARD County, FLORIDA, 32905, UNITED STATES OF AMERICA

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $136.6 million to L3HARRIS TECHNOLOGIES, INC. for work described as: LMST AN/USC-65 Key points: 1. Contract awarded for a specialized satellite communication system, indicating a need for secure and robust data transmission. 2. The long duration of the contract (over 12 years) suggests a critical and ongoing requirement for the system. 3. Awarded as 'NOT COMPETED', raising questions about the justification for avoiding a competitive bidding process. 4. The contract's value of $136.6 million over its lifespan points to a significant investment in advanced communication technology. 5. The specific system, LMST AN/USC-65, likely serves a niche but vital role within the Department of Defense's communication infrastructure. 6. The absence of small business participation (sb: false) suggests the contract was not structured to encourage small business involvement.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its age and specialized nature. Without comparable sole-source procurements or detailed cost breakdowns, it's difficult to definitively assess if the $136.6 million represented fair value. The lack of competition inherently limits the ability to establish a market-driven price. However, the extended period of performance suggests the system met the Department of Defense's needs, which can sometimes justify higher costs for specialized, mission-critical equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED', meaning a sole-source or limited competition process was used. The specific justification for this approach is not detailed in the provided data. Typically, sole-source awards occur when only one responsible source can provide the required supplies or services, or in cases of urgent need. The lack of open competition means that potential cost savings that could arise from multiple bidders vying for the contract were likely not realized.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without a bidding process, there's less assurance that the price reflects the lowest possible cost for the government.

Public Impact

The primary beneficiaries are the Department of Defense (specifically the Department of the Army) and its personnel who rely on the LMST AN/USC-65 system for critical communications. The contract delivered a specialized satellite communication system, enhancing the military's ability to transmit data securely and reliably. The geographic impact is likely global, given the nature of satellite communication systems used by the military. Workforce implications include the specialized technical personnel required for the manufacturing, deployment, and maintenance of this advanced communication equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
The long contract duration without clear re-competition could indicate a lack of market exploration.
Limited transparency into the sole-source justification makes it difficult to assess the necessity of this approach.
No indication of small business participation suggests missed opportunities for economic inclusion.

Positive Signals

The contract fulfilled a critical communication need for the Department of Defense.
The extended performance period suggests the system was reliable and met operational requirements.
The award to L3Harris Technologies, Inc. indicates reliance on established industry expertise for specialized equipment.

Sector Analysis

The contract falls within the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' sector (NAICS 334220). This sector is characterized by the production of equipment used for transmitting and receiving communications signals. The LMST AN/USC-65 system is a specialized piece of this equipment, likely involving advanced satellite technology. Comparable spending benchmarks in this niche area are difficult to ascertain without more specific details on the system's capabilities, but the defense sector often represents a significant portion of spending on advanced communications hardware.

Small Business Impact

The data indicates that small business participation was not a factor in this contract (sb: false). As a sole-source award, it's possible that the nature of the specialized equipment or the prime contractor's capabilities did not lend themselves to subcontracting opportunities for small businesses. This contract did not utilize small business set-aside provisions, nor does it appear to have generated significant subcontracting flow-downs to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Army, likely through contracting officers and program managers. Accountability measures would typically involve performance reviews, acceptance testing, and adherence to contract terms. Transparency is limited due to the sole-source nature of the award; detailed justifications and cost analyses are often not publicly disclosed for such procurements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Satellite Communications Systems
Tactical Communication Networks
Secure Communication Equipment
Defense Communications Infrastructure
Wireless Communication Equipment Manufacturing

Risk Flags

Sole-source award justification unclear
Potential for above-market pricing due to lack of competition
Limited transparency into contract performance and cost controls
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $136.6 million to L3HARRIS TECHNOLOGIES, INC.. LMST AN/USC-65

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $136.6 million.

What is the period of performance?

Start: 1995-07-31. End: 2008-04-30.

What specific capabilities does the LMST AN/USC-65 system provide, and why was it deemed essential for the Department of Defense?

The LMST AN/USC-65 is a specialized satellite communication system. While specific technical details are often classified or proprietary, its designation suggests it is a 'Lightweight Multi-band Satellite Terminal' (LMST) likely designed for robust, secure, and potentially mobile communication across multiple frequency bands. Its essentiality would stem from the need for reliable command and control, intelligence, surveillance, and reconnaissance (ISR) data transmission, and operational coordination in environments where traditional terrestrial communication infrastructure may be unavailable, damaged, or compromised. The 'AN/USC' designation typically refers to US military communication equipment.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data states the contract was 'NOT COMPETED', indicating a sole-source or limited competition award. Common justifications for sole-source awards include: (1) only one responsible source exists due to unique capabilities or proprietary technology; (2) an urgent and compelling need exists that cannot be met by other sources; or (3) specific circumstances, such as follow-on work to a previously competed contract where only the original contractor can provide the necessary integration or compatibility. Without further documentation from the Department of the Army at the time of award, the precise justification remains unknown but would typically require a formal justification and approval (J&A) document outlining the rationale.

How does the $136.6 million total contract value compare to similar defense communication system procurements from the mid-1990s to mid-2000s?

Comparing the $136.6 million total contract value is challenging without knowing the exact system capabilities and the specific period within the contract's lifespan (1995-2008) that the bulk of the spending occurred. However, for specialized, high-technology defense communication systems, particularly those involving satellite terminals and secure transmission capabilities, a value in the tens to hundreds of millions of dollars over a decade was not uncommon during that era. Procurements for major defense platforms or complex electronic systems often reached these figures. The key differentiator here is the sole-source award, which makes direct price comparisons to competitively bid systems less meaningful.

What are the potential risks associated with awarding a long-term, sole-source contract for a critical defense system?

The primary risks associated with long-term, sole-source contracts include: 1) Higher Costs: Lack of competition can lead to prices above fair market value as the contractor faces no pressure to be cost-efficient. 2) Reduced Innovation: Without competitive pressure, the contractor may have less incentive to innovate or improve the product/service. 3) Vendor Lock-in: The government can become dependent on a single vendor, making future transitions difficult and costly. 4) Quality Concerns: While not guaranteed, the absence of competitive benchmarking could potentially mask quality issues. 5) Lack of Transparency: Sole-source justifications can sometimes obscure the true necessity or cost-effectiveness of the procurement.

What was L3Harris Technologies, Inc.'s track record or experience with similar satellite communication systems prior to or during this contract period?

L3Harris Technologies, Inc. (and its predecessor companies like Harris Corporation) has a long and established history in defense electronics and communications, including satellite systems. Prior to and during the period of this contract (1995-2008), Harris Corporation was a significant player in developing and manufacturing advanced communication solutions for military and government applications. They were known for their expertise in areas such as tactical radios, secure communications, and various forms of satellite terminals. Therefore, L3Harris likely possessed the requisite experience and technical capabilities to be considered a capable, and potentially the sole, provider for the LMST AN/USC-65 system.

How has spending on similar defense communication equipment evolved since the expiration of this contract in 2008?

Since 2008, spending on defense communication equipment has continued to evolve, driven by advancements in technology, changing geopolitical landscapes, and new operational requirements. There has been a significant push towards software-defined radios, network-centric warfare capabilities, increased cybersecurity measures, and the integration of commercial off-the-shelf (COTS) technologies where feasible. While specialized satellite communication systems remain critical, there's also a greater emphasis on interoperability, data fusion, and resilient communication architectures. Procurement strategies may also have shifted, with potentially more emphasis on modular designs and lifecycle sustainment, though sole-source awards for highly specialized systems likely persist.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: DAAB0795RA506

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 2400 PALM BAY ROAD NE, PALM BAY, FL, 32905

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $167,005,470

Exercised Options: $167,005,470

Current Obligation: $136,610,943

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: YES

Timeline