Air Force awarded $61.7M contract for electronic components, with L3 Technologies as the prime contractor

Contract Overview

Contract Amount: $61,734,136 ($61.7M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 1999-10-01

End Date: 2004-12-30

Contract Duration: 1,917 days

Daily Burn Rate: $32.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200004!5700!000015!GJ05 !WR-ALC/LRK !F0960400C0011 !A!*!P00001 !19991001!20021230!008983355!008898884!008898843!N!06401!L 3 COMMUNICATIONS CORPORATION!640 N 2200 W !SALT LAKE CITY !UT!84116!67000!035!49!SALT LAKE CITY !SALT LAKE !UTAH !0001!+000000805787!N!N!000000000000!5999!MISC ELECTRICAL & ELECTRONIC COMPONENTS !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!C!B!N!Z!D !N!U!1!001!N!6A!A!N!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!B!N!*!*!*!Y!*!

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $61.7 million to L3 TECHNOLOGIES, INC. for work described as: 200004!5700!000015!GJ05 !WR-ALC/LRK !F0960400C0011 !A!*!P00001 !19991001!20021230!008983355!008898884!008898843!N!06401!L 3 COMMUNICATIONS CORPORATION!640 N 2200 W !SALT LAKE CITY !UT!84116!67000!035!49!SALT LAKE CITY !SAL… Key points: 1. Contract awarded for miscellaneous electrical and electronic components, indicating a need for specialized parts. 2. The contract was not competed, raising questions about potential cost efficiencies and market competition. 3. Prime contractor L3 Technologies has a significant presence in defense contracting, suggesting established capabilities. 4. The contract duration of over 3 years suggests a sustained requirement for these components. 5. The award was made by the Department of the Air Force, highlighting a specific military procurement need. 6. The contract type is Cost Plus Fixed Fee, which can sometimes lead to cost overruns if not managed carefully.

Value Assessment

Rating: fair

The total award amount of $61.7 million for miscellaneous electrical and electronic components over approximately 5 years is difficult to benchmark without specific component details. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can be less cost-effective than fixed-price contracts if cost controls are not stringent. Without detailed breakdowns of the fixed fee and the cost ceiling, a precise value-for-money assessment is challenging. However, the duration and the nature of specialized components suggest a potentially complex and necessary procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source procurement. This means that only one contractor, L3 Technologies, Inc., was solicited for this requirement. The lack of competition means that the government did not explore potential alternative sources or leverage a competitive bidding process to potentially secure lower prices or more innovative solutions. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits the opportunity for other businesses to compete for and win government contracts.

Public Impact

The primary beneficiaries are likely the Department of the Air Force, which receives the necessary electronic components for its operations. The contract delivers miscellaneous electrical and electronic components, crucial for maintaining and operating various Air Force systems. The geographic impact is centered around the contractor's location in Salt Lake City, Utah, and the Air Force units receiving the components. The contract supports jobs within L3 Technologies, Inc., particularly in areas related to the manufacturing, assembly, and distribution of electronic components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher prices than a competitively bid contract.
Cost Plus Fixed Fee contract type carries inherent risks of cost escalation if not closely monitored.
The specific nature of 'miscellaneous electrical & electronic components' lacks detail, making it hard to assess true necessity and value.
The contract was awarded in 1999, and its current relevance and pricing benchmarks may be outdated.

Positive Signals

L3 Technologies, Inc. (now L3Harris Technologies) is a well-established defense contractor with a track record in electronics.
The contract duration suggests a stable and ongoing need for these components within the Air Force.
The award was made to a single, presumably capable, supplier, potentially ensuring supply chain continuity for critical parts.

Sector Analysis

This contract falls within the broader defense electronics sector, a significant segment of the federal procurement landscape. The market for specialized electronic components is often characterized by high barriers to entry due to technical expertise, research and development costs, and stringent quality requirements. While specific market size data for 'miscellaneous electrical & electronic components' is not readily available, the overall defense electronics market is substantial, with billions spent annually by the DoD. This contract represents a portion of that spending, fulfilling a specific need for the Air Force.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. Furthermore, the prime contractor, L3 Technologies, Inc., is a large corporation, suggesting that subcontracting opportunities for small businesses might exist. However, the extent and nature of these subcontracting opportunities are not detailed in the award information. Without specific subcontracting plans or goals, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates close monitoring of costs incurred by the contractor to ensure they align with the contract's objectives and the fixed fee. Transparency is limited by the sole-source nature and the lack of detailed public reporting on cost breakdowns. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Procurement
Air Force Supply Chain Management
Defense Electronics Procurement
Cost Plus Fixed Fee Contracts
Sole Source Procurements

Risk Flags

Sole-source award lacks competitive pricing pressure.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Broad and undefined scope for 'miscellaneous components'.
Contract awarded over 20 years ago, potentially outdated pricing and technology.
Lack of transparency regarding specific components and their necessity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.7 million to L3 TECHNOLOGIES, INC.. 200004!5700!000015!GJ05 !WR-ALC/LRK !F0960400C0011 !A!*!P00001 !19991001!20021230!008983355!008898884!008898843!N!06401!L 3 COMMUNICATIONS CORPORATION!640 N 2200 W !SALT LAKE CITY !UT!84116!67000!035!49!SALT LAKE CITY !SALT LAKE !UTAH !0001!+000000805787!N!N!000000000000!5999!MISC ELECTRICAL & ELECTRONIC COMPONENTS !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!C!B!N!Z!D !N!U!

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $61.7 million.

What is the period of performance?

Start: 1999-10-01. End: 2004-12-30.

What is the specific nature and function of the 'MISC ELECTRICAL & ELECTRONIC COMPONENTS' procured under this contract?

The provided data classifies the product service code as '5999' for MISCELLANEOUS ELECTRICAL & ELECTRONIC COMPONENTS. This is a broad category that can encompass a wide array of items, from resistors and capacitors to more complex sub-assemblies or specialized electronic parts. Without further details or access to the contract's statement of work, it is impossible to ascertain the precise function or criticality of these components. They could be for aircraft systems, ground support equipment, communication devices, or other military applications. The lack of specificity in the description makes it challenging to assess the true value and necessity of the procurement.

How does the $61.7 million award compare to similar procurements for electronic components by the Air Force or other DoD branches?

Benchmarking this $61.7 million award is difficult without knowing the specific types and quantities of electronic components involved. The 'MISC ELECTRICAL & ELECTRONIC COMPONENTS' classification is very broad. If these were standard, high-volume components, the price might be considered high given the lack of competition. However, if they are highly specialized, custom-designed, or require unique manufacturing processes, the price could be justified. Comparing it to other contracts would require identifying procurements with similar Product Service Codes (PSCs) and contract types, as well as understanding the technical specifications and quantities. The sole-source nature further complicates direct price comparisons.

What are the potential risks associated with a sole-source, Cost Plus Fixed Fee contract for electronic components?

A sole-source award eliminates competitive pressure, potentially leading to higher prices and reduced innovation. The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility, carries risks of cost overruns. The contractor is reimbursed for allowable costs plus a fixed fee representing profit. If cost controls are weak or the scope of work expands without adequate adjustments, the total cost to the government can exceed initial estimates. For electronic components, which can be subject to technological obsolescence or supply chain disruptions, these risks are amplified. Close government oversight is crucial to manage these risks effectively.

What was L3 Technologies, Inc.'s performance history with the Air Force prior to and during this contract period (1999-2004)?

Assessing L3 Technologies, Inc.'s performance history requires accessing historical contract data and performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) from the period of 1999-2004. L3 Technologies, Inc. (now part of L3Harris Technologies) has a long history as a defense contractor. Generally, large, established companies like L3 have a mixed performance record across their numerous contracts. Without specific data related to this particular contract (F0960400C0011), it's impossible to definitively state their performance. However, the fact that they were awarded this sole-source contract suggests they were considered a capable provider at the time, potentially possessing unique qualifications or fulfilling a critical need.

How has federal spending on 'MISC ELECTRICAL & ELECTRONIC COMPONENTS' (PSC 5999) evolved since this contract was awarded?

Federal spending on PSC 5999, 'MISCELLANEOUS ELECTRICAL & ELECTRONIC COMPONENTS,' has likely seen significant fluctuations and overall growth since this contract was awarded in 1999. Technological advancements, evolving military requirements, and increased global demand for electronic components contribute to this trend. The Department of Defense, particularly the Air Force, Navy, and Army, are major consumers of such components for aircraft, ships, vehicles, and communication systems. Analyzing historical spending data from sources like USAspending.gov would reveal trends, identify major agencies and contractors in this category, and highlight shifts in technology and procurement strategies over the past two decades.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 640 N 2200 W, SALT LAKE CITY, UT, 90

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline