DoD's $151M R&D contract for satellite communications experiments awarded to L3 Technologies

Contract Overview

Contract Amount: $151,177,991 ($151.2M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-05-17

End Date: 2027-02-17

Contract Duration: 1,372 days

Daily Burn Rate: $110.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET CALL 003 - MULTI-BAND, MULTI-ORBIT SATELLITE COMMUNICATIONS EXPERIMENTS

Place of Performance

Location: CAMDEN, CAMDEN County, NEW JERSEY, 08103

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $151.2 million to L3 TECHNOLOGIES, INC. for work described as: DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET CALL 003 - MULTI-BAND, MULTI-ORBIT SATELLITE COMMUNICATIONS EXPERIMENTS Key points: 1. Contract focuses on advanced multi-band, multi-orbit satellite communications experiments. 2. Research and Development in Physical, Engineering, and Life Sciences is the primary NAICS code. 3. The contract is a Definitive Contract with a Cost Plus Fixed Fee pricing structure. 4. Performance period spans from May 2023 to February 2027. 5. The contract was awarded under full and open competition. 6. The contractor, L3 Technologies, Inc., is a significant player in the aerospace and defense sector.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to its experimental nature and specific technical objectives. The Cost Plus Fixed Fee structure means costs are reimbursed plus a negotiated profit, which can lead to cost overruns if not managed tightly. Without specific performance metrics or comparable experimental contracts, a definitive value-for-money assessment is difficult. However, the duration and scope suggest a significant investment in future capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The specific number of bidders is not provided, but this procurement method generally fosters competitive pricing and encourages innovation by allowing a wide range of contractors to participate.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining the best value through a competitive process, potentially driving down costs and improving service quality.

Public Impact

The Department of Defense benefits from advancements in satellite communication technology. This contract supports the development of next-generation secure and resilient communication systems for military operations. The geographic impact is primarily within New Jersey where the contractor is located, but the technology developed could have global military applications. Potential workforce implications include specialized R&D roles in engineering and telecommunications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs without strict adherence to budget if oversight is insufficient.
The experimental nature of the work may lead to unforeseen technical challenges and cost increases.
Long contract duration increases exposure to market shifts and technological obsolescence.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
Focus on advanced R&D aligns with strategic defense modernization goals.
Contractor has a significant presence and experience in the aerospace and defense industry.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced physical sciences and engineering related to satellite communications. The market for defense-related satellite communications is substantial, driven by the increasing reliance on space-based assets for intelligence, surveillance, reconnaissance, and command and control. Comparable spending benchmarks would typically be found within other large-scale DoD R&D programs focused on next-generation communication technologies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large-scale R&D effort, it is likely that the prime contractor, L3 Technologies, Inc., will manage subcontracting opportunities. The extent to which small businesses will participate through subcontracting is not detailed but is a common practice in large defense contracts.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures would be tied to the Cost Plus Fixed Fee structure, requiring detailed cost reporting and performance reviews. Transparency is generally maintained through contract award databases and reporting requirements, though specific technical details of the experiments may be sensitive.

Related Government Programs

DoD Satellite Communications Programs
Advanced Research Projects Agency (ARPA) Initiatives
Space Force Technology Development Contracts
National Security Space Programs

Risk Flags

Cost Overrun Risk
Technological Obsolescence
Scope Creep Potential
Long-Term Project Viability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $151.2 million to L3 TECHNOLOGIES, INC.. DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET CALL 003 - MULTI-BAND, MULTI-ORBIT SATELLITE COMMUNICATIONS EXPERIMENTS

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 $151.2 million.

What is the period of performance?

Start: 2023-05-17. End: 2027-02-17.

What is the specific technical objective of these multi-band, multi-orbit satellite communication experiments?

The specific technical objective of these experiments is to explore and validate the capabilities of advanced satellite communication technologies across multiple frequency bands and orbital configurations. This includes assessing the feasibility, performance, and resilience of such systems under various operational conditions relevant to Department of Defense missions. The goal is to enhance secure, high-bandwidth communication links, potentially for tactical operations, intelligence gathering, and global command and control, by leveraging commercial space internet infrastructure in novel ways. The experiments aim to identify optimal architectures and technologies for future military satellite communication systems.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for R&D, and what are its implications for cost control?

The Cost Plus Fixed Fee (CPFF) structure is common for R&D contracts where the scope of work is not fully defined at the outset, making it difficult to establish a firm fixed price. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to complete the work but offers less direct cost control compared to Firm Fixed Price (FFP) contracts. For R&D, it allows flexibility to adapt to evolving technical requirements. However, it places a significant burden on the government to meticulously monitor and audit costs to prevent overruns and ensure fair pricing. The fixed fee component, however, does provide a predictable profit margin for the contractor, unlike cost-plus-award-fee contracts.

What is L3 Technologies, Inc.'s track record with similar Department of Defense R&D contracts, particularly in satellite communications?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a substantial track record with the Department of Defense, including numerous contracts related to aerospace, defense electronics, and communications systems. They have been involved in various satellite programs, electronic warfare, and intelligence, surveillance, and reconnaissance (ISR) systems. While specific details on their past R&D contracts in multi-band, multi-orbit satellite communications experiments are not immediately available in this summary, their broad experience in complex defense systems suggests a strong capability to undertake such research. Their history includes developing and integrating advanced communication technologies for military applications, indicating a relevant background for this specific contract.

What are the potential risks associated with the long performance period (nearly 4 years) for this experimental contract?

The nearly four-year performance period for this experimental contract presents several potential risks. Firstly, technological advancements in the rapidly evolving field of satellite communications could outpace the project's development, potentially rendering the findings obsolete or less impactful by the contract's end. Secondly, market dynamics, including shifts in commercial satellite capabilities or pricing, could affect the relevance or cost-effectiveness of the explored solutions. Thirdly, extended R&D efforts inherently carry the risk of scope creep or unforeseen technical challenges that could lead to schedule delays and cost overruns, especially with a CPFF structure. Finally, maintaining consistent government oversight and technical expertise over such a long duration requires sustained commitment and resources.

How does this contract align with broader DoD strategies for modernizing communication capabilities and leveraging commercial technologies?

This contract directly aligns with broader Department of Defense strategies to modernize communication capabilities by exploring the integration of commercial space internet technologies. The DoD is increasingly seeking to leverage the agility, capacity, and innovation of the commercial sector to supplement and enhance its own resilient communication networks. By conducting experiments across multiple bands and orbits, the DoD aims to understand how commercial assets can provide secure, high-bandwidth, and potentially more cost-effective communication solutions, especially in contested environments. This initiative supports the goal of achieving Joint All-Domain Command and Control (JADC2) by ensuring robust and ubiquitous connectivity.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: FA865017S9300

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1 FEDERAL ST, CAMDEN, NJ, 08103

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

Financial Breakdown

Contract Ceiling: $178,895,640

Exercised Options: $178,895,640

Current Obligation: $151,177,991

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline