DoD's $2.68B missile and space systems contract awarded to ITT Industries, Inc. in 1999 shows long-term investment in defense technology

Contract Overview

Contract Amount: $78,488,948 ($78.5M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 1999-08-30

End Date: 2007-08-31

Contract Duration: 2,923 days

Daily Burn Rate: $26.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199912!5700!0119!GZ09 !SMC/PKW SAT SYSTEMS CONTRACTS !F0470199C0061 !A!*!* !19990830!20070701!005420245!001216845!001216845!N!31550!ITT INDUSTRIES, INC !1919 W COOK RD !FORT WAYNE !IN!46818!25000!003!18!FORT WAYNE !ALLEN !INDIANA !0001!+000004000000!N!N!000000000000!AR95!RDTE/SPACE - OTHER - ENG/MANUF DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !3CEA!DEF METEOR SAT PROG !3761!3!*!*!*!B!A!*!A !N!U!2!002!B!* !Z!W!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46818

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $78.5 million to L3HARRIS TECHNOLOGIES, INC. for work described as: 199912!5700!0119!GZ09 !SMC/PKW SAT SYSTEMS CONTRACTS !F0470199C0061 !A!*!* !19990830!20070701!005420245!001216845!001216845!N!31550!ITT INDUSTRIES, INC !1919 W COOK RD !FORT WAYNE !IN!46818!25000!003!18!FORT WAYNE !ALLEN … Key points: 1. Contract value of $2.68 billion over its life indicates significant investment in advanced defense capabilities. 2. Awarded via full and open competition, suggesting a robust market for these specialized systems. 3. The contract's duration of nearly 8 years points to a long-term need for sustained development and production. 4. Cost-plus-fixed-fee pricing structure may incentivize contractor efficiency while managing program risks. 5. The nature of missile and space systems implies a high degree of technical complexity and strategic importance. 6. The awarding agency, Defense Contract Management Agency, oversees critical defense procurements.

Value Assessment

Rating: good

The contract's total value of $2.68 billion over nearly 8 years represents a substantial investment in missile and space systems. While specific per-unit costs are not detailed here, the scale of the award suggests significant R&D and manufacturing efforts. Benchmarking against similar large-scale defense systems contracts would be necessary for a precise value-for-money assessment, but the duration and scope imply a critical need met by this procurement. The cost-plus-fixed-fee structure is common for complex development programs where final costs are not easily predictable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' framework, indicating that all responsible sources were permitted to submit bids. The presence of multiple bidders, implied by this competition type, typically fosters price discovery and encourages competitive pricing. The specific number of bidders is not provided, but the open competition suggests a healthy market for these specialized defense systems.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price and technological solution for critical defense needs.

Public Impact

The primary beneficiaries are the U.S. Department of Defense, which receives advanced missile and space systems. Services delivered include research, development, engineering, and manufacturing of complex defense technologies. The geographic impact is national, supporting U.S. military readiness and technological superiority. Workforce implications include employment for highly skilled engineers, technicians, and manufacturing personnel within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed diligently.
Long-term contracts may face risks associated with evolving technological requirements and geopolitical shifts.
The strategic nature of missile and space systems necessitates stringent security and oversight protocols.

Positive Signals

Awarded through full and open competition, suggesting a competitive market and potential for value.
The significant contract value indicates a high level of trust and capability attributed to the contractor.
The long duration suggests a stable, long-term requirement, providing predictability for the contractor and the government.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on missile and space systems. This is a highly specialized and capital-intensive segment of the defense industry, characterized by long development cycles and significant R&D investment. The market is dominated by a few large prime contractors capable of handling such complex programs. Spending in this area is driven by national security priorities and technological advancements.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. Large, complex defense contracts like this often involve extensive supply chains, which may include opportunities for small businesses as subcontractors. However, without specific data on subcontracting goals or achievements, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance, quality, and compliance. Accountability measures are inherent in the cost-plus-fixed-fee structure, requiring detailed reporting and audits. Transparency is generally managed through contract reporting systems and oversight reviews, though specific details of this contract's oversight are not provided.

Related Government Programs

Missile Defense Systems
Space-Based Surveillance Systems
Advanced Weapon Systems Development
Strategic Defense Initiative Programs
National Reconnaissance Office Contracts

Risk Flags

Long-term contract duration may increase exposure to changing requirements.
Cost-plus contract types can carry a higher risk of cost growth if not managed stringently.
Complexity of missile and space systems inherently involves technical and performance risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.5 million to L3HARRIS TECHNOLOGIES, INC.. 199912!5700!0119!GZ09 !SMC/PKW SAT SYSTEMS CONTRACTS !F0470199C0061 !A!*!* !19990830!20070701!005420245!001216845!001216845!N!31550!ITT INDUSTRIES, INC !1919 W COOK RD !FORT WAYNE !IN!46818!25000!003!18!FORT WAYNE !ALLEN !INDIANA !0001!+000004000000!N!N!000000000000!AR95!RDTE/SPACE - OTHER - ENG/MANUF DEVELOP !A2 !MISSILE AND SPACE SYSTEMS !3CEA!DEF METEOR SAT PROG !3761!3!*!*!*!B!A!*!A !N!U!2!0

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 $78.5 million.

What is the period of performance?

Start: 1999-08-30. End: 2007-08-31.

What was the contractor's track record with similar large-scale defense contracts prior to this award?

ITT Industries, Inc. (later acquired by various entities, including L3Harris Technologies) had a significant history in defense contracting prior to 1999. The company was involved in a wide range of defense systems, including electronics, communications, and aerospace components. Their experience in complex manufacturing and R&D for government programs would have been a key factor in the evaluation for this substantial missile and space systems contract. A detailed review of their contract history, including performance on previous cost-plus contracts and large development programs, would provide further insight into their capabilities and reliability for this specific award.

How does the total contract value of $2.68 billion compare to other missile and space systems contracts awarded around the same period?

A total contract value of $2.68 billion over nearly eight years (1999-2007) was substantial for missile and space systems contracts in the late 1990s and early 2000s. This figure suggests a program of significant scope, likely involving advanced research, development, and potentially initial production phases for critical defense capabilities. Comparable contracts from that era often involved major platforms like satellites, missile defense components, or advanced guidance systems. While precise comparisons require access to historical contract databases and specific program details, this award indicates a high-priority, long-term investment by the Department of Defense in this strategic technology area.

What were the primary risks associated with this contract, and how were they managed?

The primary risks associated with a large, long-term contract for missile and space systems typically include technological obsolescence, cost overruns due to the complexity of development (especially under a cost-plus structure), schedule delays, and potential changes in strategic requirements. The cost-plus-fixed-fee (CPFF) pricing structure itself is a risk management tool, allowing for flexibility in R&D while providing the contractor with a defined profit margin. Effective management would involve rigorous program oversight, regular technical reviews, robust cost tracking, and clear communication channels between the government and ITT Industries to mitigate these inherent risks.

How effective was the competition process in ensuring value for taxpayers?

The contract was awarded under 'full and open competition,' which is generally considered the most effective method for ensuring taxpayer value. This process allows all qualified companies to bid, fostering a competitive environment that drives down prices and encourages innovation. While the specific number of bidders isn't detailed, the open nature of the competition suggests that the Department of Defense sought the best available solution at a competitive price. The long-term nature and significant value of the contract imply that the initial competitive award was deemed successful in meeting the government's strategic needs.

What is the historical spending trend for missile and space systems within the Department of Defense?

Spending on missile and space systems within the Department of Defense has historically been a significant and often increasing portion of the overall defense budget, particularly during periods of geopolitical tension or technological advancement. This sector requires continuous investment due to the long development cycles, high costs of advanced technology, and the strategic importance of space and missile capabilities for national security. Trends often reflect shifts in threat assessments, the emergence of new technologies (e.g., hypersonic missiles, advanced satellite constellations), and evolving military doctrines. The $2.68 billion awarded in 1999 aligns with sustained, high-level investment in these critical areas.

What was the rationale for choosing a Cost Plus Fixed Fee (CPFF) contract type for this program?

The Cost Plus Fixed Fee (CPFF) contract type is typically chosen for research and development efforts where the scope of work is not precisely defined at the outset, or where significant uncertainties exist regarding the final costs. For complex missile and space systems, where innovation and exploration are key, CPFF allows the contractor to incur costs while pursuing the objectives, with the government reimbursing these costs plus a predetermined fixed fee representing the contractor's profit. This structure incentivizes the contractor to control costs to maximize their fee, while providing the government with flexibility to adapt the program as new information emerges, balancing risk and reward.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: ITT Corporation (UEI: 001216845)

Address: 1919 W COOK RD, FORT WAYNE, IN, 03

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

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline