DoD's $333M L3Harris contract for aircraft parts saw no competition, raising value concerns

Contract Overview

Contract Amount: $332,922,009 ($332.9M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2016-11-23

End Date: 2017-12-31

Contract Duration: 403 days

Daily Burn Rate: $826.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF ACAT III BIG SAFARI JM GOCO

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $332.9 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IGF::CT::IGF ACAT III BIG SAFARI JM GOCO Key points: 1. The contract's value is substantial, representing a significant investment in aircraft parts. 2. Lack of competition suggests potential for overpayment and reduced innovation. 3. Performance risks are moderate given the nature of aircraft parts supply. 4. This contract falls within the broader aerospace and defense sector. 5. The sole-source nature limits opportunities for broader market engagement. 6. The contract duration and delivery order structure indicate ongoing support needs.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of aircraft parts. Without competitive bids, it's difficult to ascertain if the $333 million represents a fair market price. The cost-plus-fixed-fee (CPFF) contract type can sometimes lead to higher costs if not carefully managed, as the contractor is reimbursed for allowable costs plus a fixed fee. Further analysis would require detailed cost breakdowns and comparisons to similar, competitively awarded contracts for comparable aircraft parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The absence of a competitive bidding process means that L3Harris Technologies Integrated Systems L.P. was the only provider considered. This lack of competition limits the government's ability to explore alternative suppliers, potentially negotiate better pricing, and benefit from a wider range of innovative solutions. The rationale for a sole-source award would need to be thoroughly documented to justify the absence of competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of Defense and its aviation units, ensuring the availability of critical aircraft parts. The services delivered include the supply of 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' essential for maintaining airworthiness. The geographic impact is primarily within Texas, where the contractor is located, but the ultimate impact is on Air Force operations nationwide. Workforce implications include employment at L3Harris Technologies and its supply chain, supporting specialized manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices and reduced value for money.
Sole-source awards can stifle innovation by not engaging a broader market.
The CPFF contract type requires rigorous oversight to control costs.
Limited transparency into the pricing structure due to non-competitive nature.

Positive Signals

L3Harris Technologies is an established defense contractor with a track record.
The contract ensures the supply of critical components for military aircraft.
The contract is for a specific, defined need within the Air Force's operations.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on the manufacturing and supply of aircraft parts. The market for military aircraft components is characterized by high technical requirements, stringent quality control, and often long production cycles. Spending in this area is critical for national security and maintaining operational readiness. Comparable spending benchmarks would involve analyzing other sole-source or competitively awarded contracts for similar aircraft parts or support services within the DoD.

Small Business Impact

The contract data indicates that small business participation was not a stated requirement or outcome ('sb': false, 'ss': false). This suggests that there were no specific set-asides for small businesses, nor is there explicit information on subcontracting plans to small businesses. Consequently, the direct impact on the small business ecosystem for this particular award appears minimal, and opportunities for small business subcontracting may have been missed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Given the sole-source nature and CPFF structure, rigorous oversight of cost allowability, performance, and adherence to contract terms is crucial. The Inspector General's office for the Department of Defense may also conduct audits or investigations into contract spending and performance, particularly if concerns regarding waste, fraud, or abuse arise. Transparency is limited by the lack of competitive bidding.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Manufacturing
Defense Logistics Support
Air Force Procurement
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Cost-plus contract type

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $332.9 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. IGF::CT::IGF ACAT III BIG SAFARI JM GOCO

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P..

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 $332.9 million.

What is the period of performance?

Start: 2016-11-23. End: 2017-12-31.

What is the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically occurs when only one responsible source is available or capable of meeting the government's needs. Common justifications include unique capabilities, urgent requirements where competition is not feasible, or when a specific technology or system is proprietary. Without further documentation from the awarding agency (Department of the Air Force), the precise reason for this sole-source determination remains unknown. However, such awards are subject to strict regulations and require a documented justification and approval (J&A) process to ensure the government is obtaining fair value and that competition was genuinely not possible.

How does the Cost Plus Fixed Fee (CPFF) contract type impact value for money in this context?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. While this structure can be useful for research and development or when cost estimation is difficult, it carries inherent risks for value for money, especially in a sole-source scenario. The contractor has less incentive to control costs aggressively, as most incurred expenses are reimbursed. The fixed fee, however, provides some predictability in profit. For taxpayers, ensuring robust oversight of allowable costs and fair negotiation of the fixed fee is paramount to mitigate potential overspending. Without competition, the baseline for 'fairness' is harder to establish.

What are the potential risks associated with awarding a $333 million contract without competition?

Awarding a contract of this magnitude ($333 million) without competition presents several significant risks. Firstly, the government may not achieve the best possible price, as there is no competitive pressure to drive down costs. This can lead to overpayment and inefficient use of taxpayer funds. Secondly, the lack of competition can stifle innovation, as potential alternative solutions or more cost-effective methods from other suppliers are not explored. Thirdly, it can create a perception of favoritism or lack of transparency, potentially eroding public trust. Finally, it limits the government's leverage in future negotiations and contract renewals.

Can the performance of L3Harris Technologies Integrated Systems L.P. on this contract be assessed?

Assessing the performance of L3Harris Technologies Integrated Systems L.P. on this specific contract requires access to performance reports, delivery records, and quality metrics that are typically not publicly available. The contract was awarded in late 2016 and completed in late 2017, indicating a relatively short performance period. While the data shows the contract was for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' the specific nature of these parts and their criticality would influence performance expectations. Without detailed government performance evaluations or contractor debriefs (if applicable), a definitive assessment is not possible from the provided summary data.

What is the historical spending pattern for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' within the Department of the Air Force?

The provided data focuses on a single contract and does not offer historical spending patterns for the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category within the Department of the Air Force. To analyze historical spending, one would need access to broader procurement databases that track spending over multiple fiscal years for this specific Product Service Code (PSC) or equivalent categories. Such an analysis would reveal trends in contract values, types of awards (competed vs. sole-source), key contractors, and overall investment in this area, providing context for the $333 million award.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 10001 JACK FINNEY BLVD, GREENVILLE, TX, 75402

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $332,922,009

Exercised Options: $332,922,009

Current Obligation: $332,922,009

Subaward Activity

Number of Subawards: 80

Total Subaward Amount: $32,666,302

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline