DoD's $18.7M Common Flight Safety System contract awarded to L3 Technologies, Inc

Contract Overview

Contract Amount: $18,721,385 ($18.7M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-05-15

End Date: 2027-01-01

Contract Duration: 1,327 days

Daily Burn Rate: $14.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: COMMON FLIGHT SAFETY SYSTEM (CFSS)

Place of Performance

Location: NICEVILLE, OKALOOSA County, FLORIDA, 32578

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to L3 TECHNOLOGIES, INC. for work described as: COMMON FLIGHT SAFETY SYSTEM (CFSS) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of 1327 days indicates a long-term commitment for the delivery of flight safety systems. 4. The contract is for Ammunition (except Small Arms) Manufacturing, a critical component of defense operations. 5. The award is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The contractor, L3 Technologies, Inc., has a significant role in defense manufacturing. 7. The contract is located in Florida, potentially impacting the local economy and workforce.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the parent IDIQ contract's scope and pricing. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control. While CPFF can be appropriate for research and development or when costs are uncertain, it requires robust oversight to ensure the fixed fee remains reasonable and that costs are managed efficiently. Without more data on the specific deliverables and the fixed fee percentage, a definitive value-for-money assessment is difficult, but the contract type warrants careful monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding process where multiple companies likely had the opportunity to compete. The presence of 3 bids (no=3) is a moderate level of competition for a specialized defense system. While more bidders could potentially drive prices lower, three offers generally provide a reasonable basis for price comparison and selection.

Taxpayer Impact: A full and open competition, even with three bidders, is generally favorable for taxpayers as it aims to secure the best value through market forces. This approach helps prevent inflated pricing that might occur in less competitive scenarios.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, receiving critical flight safety systems. The services delivered are related to the manufacturing of ammunition components essential for flight safety. The geographic impact is concentrated in Florida, where the contract is being performed. The contract supports specialized manufacturing jobs within the defense industry in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor spending if not rigorously overseen.
The long contract duration (1327 days) requires sustained oversight to ensure performance remains on track and costs are controlled.
The specific nature of 'Ammunition (except Small Arms) Manufacturing' may involve specialized safety and handling protocols that need strict adherence.

Positive Signals

Awarded through 'Full and Open Competition,' indicating a competitive process.
The contractor, L3 Technologies, Inc., is an established entity in the defense sector.
The contract is a Delivery Order, suggesting it is part of a potentially larger, pre-vetted IDIQ vehicle.

Sector Analysis

The defense manufacturing sector, particularly for specialized components like flight safety systems and ammunition, is characterized by high barriers to entry, stringent quality requirements, and significant government investment. This contract fits within the broader landscape of defense procurement, where companies like L3 Technologies, Inc. play a crucial role in supplying essential materials and systems. Spending in this sub-sector is driven by national security needs and technological advancements, with contracts often being long-term and high-value.

Small Business Impact

The data indicates that small business participation (sb: false) was not a specific set-aside for this contract. There is no explicit information on subcontracting plans for small businesses. Without specific set-aside goals or reporting on subcontracting, the direct impact on the small business ecosystem is unclear, though large prime contractors often engage small businesses for specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures against the estimated costs and ensure the fixed fee is justified. Transparency is typically managed through contract reporting mechanisms and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Ammunition Manufacturing Contracts
Flight Safety Systems Procurement
Defense Ammunition Production Program
Air Force Weapon Systems Support
Cost Plus Fixed Fee Contracts in Defense

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration necessitates sustained performance monitoring.
Potential safety and regulatory risks associated with ammunition manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to L3 TECHNOLOGIES, INC.. COMMON FLIGHT SAFETY SYSTEM (CFSS)

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 $18.7 million.

What is the period of performance?

Start: 2023-05-15. End: 2027-01-01.

What is the historical spending pattern for the Common Flight Safety System (CFSS) program or similar systems procured by the Air Force?

Analyzing historical spending for the Common Flight Safety System (CFSS) program or analogous systems is crucial for contextualizing the current $18.7 million award. Without specific historical data for CFSS, we can look at broader trends in Air Force procurement for flight safety components and ammunition manufacturing. Typically, such systems involve significant R&D and long production runs, leading to multi-year contracts often valued in the tens or hundreds of millions of dollars. Factors influencing historical spending include technological upgrades, threat assessments, operational tempo, and budget allocations. For instance, if previous iterations of flight safety systems were procured under different contract vehicles or by different agencies, direct comparisons might be limited. However, understanding the average cost per unit, the number of systems procured annually, and the typical contract durations for similar defense articles can provide a benchmark. The current award being a Delivery Order under a larger IDIQ suggests a potential for follow-on orders, making the total program spending potentially much higher than this single award.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to industry standards for similar defense manufacturing procurements?

The Cost Plus Fixed Fee (CPFF) contract structure is common in defense procurement, particularly for programs where the scope of work or cost estimation is uncertain at the outset, such as research, development, or complex manufacturing. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to control costs to maximize their profit margin, as the fee is fixed regardless of the final cost. However, it also places a significant burden on the government to meticulously audit costs. Compared to other contract types like Firm-Fixed-Price (FFP), CPFF offers more flexibility but less cost certainty for the government. FFP contracts are preferred when requirements are well-defined, providing greater cost predictability. For specialized defense manufacturing like ammunition components, CPFF might be chosen if the exact materials, processes, or quantities required for optimal flight safety performance are subject to change or require extensive testing. Industry standards suggest that while CPFF is utilized, agencies strive to move towards FFP or other fixed-price variants as requirements become clearer to ensure better value for taxpayer money.

What is L3 Technologies, Inc.'s track record with the Department of Defense, specifically regarding ammunition or flight safety systems?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a substantial and long-standing track record as a prime contractor and supplier to the Department of Defense (DoD) across various sectors, including aerospace, communications, and electronic systems. While specific details on their performance solely for the 'Common Flight Safety System (CFSS)' or ammunition manufacturing might require deeper database dives, the company's overall profile suggests significant experience. They have been involved in numerous complex defense programs, often delivering sophisticated hardware and integrated systems. Their history with the DoD includes contracts for aircraft components, avionics, electronic warfare systems, and command and control systems. Given their broad capabilities, it is plausible they possess the necessary expertise and manufacturing capacity for components related to flight safety and potentially ammunition, although their primary focus might lean more towards electronics and integrated systems. A review of their past performance ratings, any past performance issues, and the scale of their previous DoD contracts would provide a clearer picture of their reliability and capability in this specific domain.

What are the potential risks associated with the 'Ammunition (except Small Arms) Manufacturing' aspect of this contract?

The 'Ammunition (except Small Arms) Manufacturing' designation carries several inherent risks. Firstly, safety is paramount; the manufacturing processes for ordnance involve hazardous materials and potentially explosive components, requiring stringent safety protocols and specialized facilities to prevent accidents. Non-compliance can lead to catastrophic failures, injuries, or fatalities. Secondly, quality control is critical; defects in ammunition components can lead to mission failures or safety hazards during use. Ensuring consistent quality and reliability under a CPFF contract requires robust government oversight of the contractor's quality assurance processes. Thirdly, regulatory compliance is complex, involving environmental regulations related to hazardous waste disposal and security regulations for handling sensitive materials. Finally, supply chain risks exist; disruptions in the availability of raw materials or specialized components could impact production schedules and costs. The CPFF structure necessitates careful monitoring to ensure these risks are managed efficiently without leading to uncontrolled cost increases.

How does the geographic location in Florida (FL) influence the contract's execution and potential economic impact?

The contract's performance location in Florida (FL) has several implications. Florida has a significant defense industry presence, including numerous aerospace and manufacturing companies, which may provide a ready pool of skilled labor and established supply chains relevant to this contract. This proximity could facilitate easier oversight and collaboration between the contractor and government representatives. Economically, the contract injects federal spending into the Florida economy, supporting jobs in manufacturing, engineering, logistics, and related support services. This can have a multiplier effect, benefiting local businesses and communities. However, reliance on a single geographic location can also introduce risks, such as vulnerability to regional economic downturns, natural disasters (like hurricanes, which are common in Florida), or labor disputes specific to the area. The state's business climate and regulatory environment may also influence operational costs and efficiency for the contractor.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA865823RA001

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 2 FEDERAL ST, CAMDEN, NJ, 08102

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: $21,245,379

Exercised Options: $21,245,379

Current Obligation: $18,721,385

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865621DA008

IDV Type: IDC

Timeline