DOT's FAA awarded $40.8M to L3 Technologies for management consulting, with a 15-year performance period

Contract Overview

Contract Amount: $40,766,328 ($40.8M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Transportation

Start Date: 2003-03-31

End Date: 2017-09-28

Contract Duration: 5,295 days

Daily Burn Rate: $7.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: LABOR HOURS

Sector: Other

Official Description: OCEANIC INTEGRATED SERVICES

Place of Performance

Location: CAMDEN, CAMDEN County, NEW JERSEY, 08103

State: New Jersey Government Spending

Plain-Language Summary

Department of Transportation obligated $40.8 million to L3 TECHNOLOGIES, INC. for work described as: OCEANIC INTEGRATED SERVICES Key points: 1. Contract value represents a significant investment in administrative management services over a long duration. 2. Full and open competition suggests a robust market for these services, potentially leading to competitive pricing. 3. The contract's extended performance period may indicate a need for sustained support or a strategic partnership. 4. L3 Technologies' role in providing management consulting highlights the importance of external expertise in government operations. 5. The specific NAICS code (541611) points to a focus on general management consulting, a common government need. 6. The contract's duration and value warrant scrutiny for long-term cost-effectiveness and performance.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without more specific service details and comparable contract data. The total award of $40.8 million over approximately 15 years averages to roughly $2.7 million per year, which could be reasonable for comprehensive management consulting services. However, the lack of detailed performance metrics or specific deliverables makes a definitive value assessment difficult. Further analysis would require comparing the scope of work and pricing structure to similar large-scale management consulting contracts awarded by the FAA or other federal agencies.

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 drive down prices and ensure the government receives the best value. The presence of multiple bidders suggests a healthy market for administrative management and general management consulting services, allowing the FAA to select a contractor based on a combination of technical merit and cost.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider selection of qualified contractors, ensuring that federal funds are used efficiently.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving management and administrative consulting services. These services likely support the FAA's operational efficiency, strategic planning, and overall management functions. The contract's performance is based in New Jersey, potentially creating local economic impact through employment and subcontracting. The workforce implications are tied to the specialized skills required for management consulting, potentially involving highly educated professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extended contract duration of 15 years raises questions about long-term cost control and the potential for vendor lock-in.
Without detailed performance metrics, it's difficult to assess the ongoing value and effectiveness of the consulting services provided.
The lack of specific deliverables in the provided data makes it hard to gauge the precise impact and success of the contract.
The contract's significant value necessitates robust oversight to ensure continued alignment with FAA objectives and taxpayer interests.

Positive Signals

The use of full and open competition suggests a commitment to leveraging market forces for optimal service acquisition.
The selection of L3 Technologies, Inc. implies they met the stringent requirements set forth in the competitive bidding process.
The contract's long-term nature, if managed effectively, can provide stability and continuity for critical administrative functions within the FAA.

Sector Analysis

The Administrative Management and General Management Consulting Services sector (NAICS 541611) is a significant part of the federal contracting landscape, with agencies frequently outsourcing specialized expertise. The federal government spends billions annually on consulting services across various domains. This contract fits within that broader trend, where agencies like the FAA leverage external firms to enhance efficiency, implement new strategies, or manage complex projects. Comparable spending benchmarks would typically involve analyzing the average contract value and duration for similar consulting services within the transportation sector or across all federal agencies.

Small Business Impact

The data indicates that 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 primary contractor, L3 Technologies, Inc., is likely a large business. While not a set-aside, large contracts can sometimes include subcontracting goals for small businesses, but this information is not provided. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this prime contract were limited.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Transportation's Office of Inspector General (OIG) and the Federal Aviation Administration's internal oversight mechanisms. Given the contract's long duration and significant value, regular performance reviews, audits, and compliance checks are expected. Transparency would be enhanced through contract reporting systems like FPDS-NG, which track award details and modifications. Accountability measures would be tied to the contract's performance clauses and the contractor's adherence to the Statement of Work.

Related Government Programs

Management and Consulting Services
Administrative Support Services
Federal Aviation Administration Operations
Department of Transportation IT and Professional Services

Risk Flags

Long contract duration may lead to cost inefficiencies if not actively managed.
Lack of specific performance metrics makes value assessment difficult.
Labor hours pricing model carries risk of cost overruns if not closely monitored.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $40.8 million to L3 TECHNOLOGIES, INC.. OCEANIC INTEGRATED SERVICES

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $40.8 million.

What is the period of performance?

Start: 2003-03-31. End: 2017-09-28.

What specific management and administrative consulting services did L3 Technologies, Inc. provide under this contract?

The provided data indicates the contract falls under NAICS code 541611, 'Administrative Management and General Management Consulting Services.' This broad category suggests L3 Technologies likely provided services related to organizational structure, strategic planning, operational efficiency improvements, process optimization, policy development, and potentially human capital management or financial advisory services to the Federal Aviation Administration (FAA). Without access to the specific Statement of Work (SOW) or contract modifications, the precise nature and scope of these services remain unspecified. However, given the FAA's mission, these consulting efforts could have been directed towards improving air traffic control management, enhancing safety protocols, streamlining administrative processes, or supporting major aviation infrastructure projects.

How does the $40.8 million award compare to typical spending on management consulting by the FAA?

Comparing the $40.8 million award to typical FAA spending on management consulting requires analyzing historical spending patterns and the agency's overall budget for such services. The FAA, as a large and complex organization responsible for the safety and efficiency of the national airspace, frequently utilizes external expertise. A $40.8 million contract over approximately 15 years averages to about $2.7 million annually. This figure, while substantial, may be within the expected range for a long-term, comprehensive consulting engagement for an agency of the FAA's size and scope. However, a definitive comparison would necessitate examining the FAA's annual reports, budget allocations for professional services, and databases of previously awarded consulting contracts to establish a benchmark for similar engagements.

What are the potential risks associated with a 15-year contract for management consulting services?

A 15-year contract for management consulting services presents several potential risks. Firstly, there's the risk of 'vendor lock-in,' where the agency becomes overly reliant on a single contractor, potentially stifling internal expertise development and limiting future flexibility. Secondly, over such a long period, the contractor's understanding of the agency's needs might become outdated, or the agency's requirements might evolve significantly, leading to a misalignment between services provided and current needs. Thirdly, long-term contracts can sometimes lead to complacency or reduced urgency from the contractor if not managed with rigorous performance monitoring. Finally, there's the financial risk associated with locking in prices for an extended duration; market rates for consulting services can fluctuate, and the agency might end up paying above market value if the contract doesn't include adequate price adjustment mechanisms.

What does the 'full and open competition' designation imply about the contractor selection process and potential value?

The designation 'full and open competition' signifies that the contract was awarded after a process where all responsible sources were permitted to submit a bid or proposal. This implies that the Federal Aviation Administration (FAA) actively sought out and considered offers from a wide range of potential contractors, rather than restricting the competition. This approach is generally considered the gold standard for federal procurement as it maximizes the opportunity for the government to receive the best possible value by fostering a competitive environment. It suggests that L3 Technologies, Inc. was selected from a pool of qualified bidders based on a thorough evaluation of technical capabilities, past performance, and price, likely resulting in a more cost-effective outcome for taxpayers compared to non-competitive methods.

How has L3 Technologies, Inc. performed on previous federal contracts, particularly with the FAA or DOT?

Assessing L3 Technologies, Inc.'s past performance on federal contracts, especially with the Department of Transportation (DOT) and the Federal Aviation Administration (FAA), is crucial for understanding their reliability and capability in fulfilling this $40.8 million award. While the provided data does not include specific past performance records, a comprehensive analysis would involve reviewing contract databases (like FPDS-NG) for previous awards to L3 Technologies, examining performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and looking for any documented instances of outstanding performance, contract disputes, or terminations. L3 Technologies is a large defense contractor, and their history likely includes numerous government contracts across various agencies, providing a basis for evaluating their track record in delivering complex services.

What is the significance of the contract being a 'Definitive Contract' awarded under 'Labor Hours' pricing?

The contract being a 'Definitive Contract' means it is a fixed-price contract where the price is set and not subject to renegotiation. However, the pricing structure is 'Labor Hours,' which means the total price is based on the actual hours worked by the contractor's personnel at specified hourly rates. This pricing model is typically used when the scope of work is not clearly defined enough to estimate a fixed total price upfront, or when the nature of the work is highly variable. For management consulting, labor hours allow flexibility as the exact number of hours needed can fluctuate based on project demands. The risk here is that the total cost can escalate if more hours are required than initially anticipated, making robust oversight of labor hours and task execution critical for cost control.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

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

Address: 1 FEDERAL ST, CAMDEN, NJ, 08103

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

Financial Breakdown

Contract Ceiling: $40,766,328

Exercised Options: $40,766,328

Current Obligation: $40,766,328

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline