L3Harris awarded $268.7M for Counter Communication Systems, facing no competition
Contract Overview
Contract Amount: $268,740,964 ($268.7M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2016-11-03
End Date: 2022-08-19
Contract Duration: 2,115 days
Daily Burn Rate: $127.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: COUNTER COMMUNICATION SYSTEMS BLOCK 10.2 PRODUCTION (CCS BLOCK 10.2)
Place of Performance
Location: PALM BAY, BREVARD County, FLORIDA, 32905
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $268.7 million to L3HARRIS TECHNOLOGIES, INC. for work described as: COUNTER COMMUNICATION SYSTEMS BLOCK 10.2 PRODUCTION (CCS BLOCK 10.2) Key points: 1. Contract awarded to a single vendor, raising questions about price discovery and potential overpayment. 2. The 'Not Competed' designation suggests a lack of market research or a specific justification for sole-sourcing. 3. A Cost Plus Fixed Fee contract type can incentivize cost overruns if not managed rigorously. 4. The contract duration of 2115 days (approx. 5.8 years) indicates a long-term commitment to this specific vendor. 5. The absence of small business involvement raises concerns about broader economic impact. 6. Performance context is limited without specific delivery metrics or quality assessments.
Value Assessment
Rating: questionable
Benchmarking the value of this $268.7 million contract is challenging due to the lack of competitive bids. The Cost Plus Fixed Fee (CPFF) structure, while allowing for flexibility, can lead to higher costs compared to fixed-price contracts if not closely monitored. Without comparable contract data or detailed cost breakdowns, it's difficult to definitively assess if the pricing represents fair market value. The absence of competition suggests potential risks of inflated costs and reduced efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was designated as 'Not Competed,' indicating that a full and open competition was not conducted. The sole awardee, L3Harris Technologies, Inc., was selected without offering other potential vendors an opportunity to bid. This approach is typically used when only one source can fulfill the requirement, or for specific reasons outlined in federal acquisition regulations. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.
Taxpayer Impact: Taxpayers may be exposed to higher costs due to the absence of competitive pressure. Without competing offers, the government cannot be assured it is receiving the most cost-effective solution available in the market.
Public Impact
The primary beneficiaries are the Department of Defense, which receives critical communication systems. The contract supports the production of Counter Communication Systems (CCS) Block 10.2. The geographic impact is primarily within Florida, where L3Harris Technologies, Inc. is located. Workforce implications include job retention and creation within L3Harris and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher prices and reduced innovation.
- Cost Plus Fixed Fee contract type carries inherent risks of cost overruns.
- No indication of small business participation or subcontracting goals.
- Limited transparency on the specific justification for sole-sourcing.
- Performance metrics and quality assurance details are not publicly available.
Positive Signals
- Award to an established defense contractor with existing capabilities.
- Contract addresses a specific defense need for communication systems.
- Long-term contract provides stability for production and delivery.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on electronic systems manufacturing. The North American Industry Classification System (NAICS) code 334511 covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. The defense electronics market is characterized by high barriers to entry, significant R&D investment, and long procurement cycles. Spending in this area is driven by national security requirements and technological advancements.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no information provided regarding subcontracting plans or goals. The absence of small business set-asides means that opportunities for small businesses to participate in this significant defense contract are likely limited, potentially impacting the broader small business defense industrial base.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions. The specific oversight mechanisms, accountability measures, and transparency assessments are not detailed in the provided data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Defense Communications Systems
- Electronic Warfare Systems
- Command and Control Systems
- Tactical Communication Equipment
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of transparency on justification
- No small business participation indicated
Tags
defense, department-of-defense, l3harris-technologies, sole-source, not-competed, cost-plus-fixed-fee, production, communication-systems, florida, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $268.7 million to L3HARRIS TECHNOLOGIES, INC.. COUNTER COMMUNICATION SYSTEMS BLOCK 10.2 PRODUCTION (CCS BLOCK 10.2)
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 $268.7 million.
What is the period of performance?
Start: 2016-11-03. End: 2022-08-19.
What is the specific justification for awarding this contract on a sole-source basis to L3Harris Technologies, Inc.?
The provided data states the contract was 'NOT COMPETED,' indicating a sole-source award. Federal Acquisition Regulation (FAR) Part 6 outlines circumstances under which full and open competition is not required, such as when only one responsible source can provide the supplies or services, or when a national security exception applies. Without further documentation or agency justification, the precise reason for not competing this $268.7 million contract remains unclear. This lack of transparency can raise concerns about whether the government explored all viable options to ensure the best value was obtained for taxpayers.
How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost compared to other contract types?
A Cost Plus Fixed Fee (CPFF) contract reimburses the contractor for allowable costs incurred, plus a fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is uncertainty in the costs. While it allows for flexibility and encourages contractor engagement in uncertain environments, it can incentivize cost overruns as the contractor is guaranteed to cover costs and receive a fixed profit. This contrasts with fixed-price contracts, where the contractor bears more risk for cost overruns but also has a greater incentive to control costs to maximize profit. Rigorous oversight and cost controls are crucial for CPFF contracts to prevent excessive spending.
What are the potential risks associated with awarding a contract of this magnitude without competition?
Awarding a contract of $268.7 million without competition presents several risks. Firstly, the government may not achieve the best possible price due to the absence of market competition, potentially leading to overpayment. Secondly, a lack of competition can reduce the incentive for the contractor to innovate or improve efficiency, as there is no direct pressure from rivals. Thirdly, it limits the government's ability to explore alternative solutions or technologies that other vendors might offer. Finally, it can create a perception of favoritism or lack of due diligence, even if the sole-source justification is valid.
What is the historical spending pattern for Counter Communication Systems (CCS) with L3Harris Technologies, Inc. or similar systems?
The provided data focuses on a single contract for CCS Block 10.2 Production. To assess historical spending patterns, one would need to analyze prior contracts for CCS or related communication systems awarded to L3Harris Technologies, Inc. and other prime contractors. This would involve examining contract values, types, durations, and competition levels over several fiscal years. Without access to a broader contract database or specific historical data for this program, it is not possible to establish a trend or benchmark current spending against past performance or market norms.
What performance metrics or deliverables are associated with this contract, and how is performance being measured?
The provided data indicates the contract is for 'PRODUCTION' of Counter Communication Systems Block 10.2. However, specific performance metrics, key performance indicators (KPIs), or detailed deliverables are not included. Typically, production contracts would outline requirements for quantity, quality, delivery schedules, and technical specifications. The effectiveness of the oversight and the assessment of value for money would heavily depend on the rigor of the performance monitoring and acceptance criteria established within the contract's statement of work and associated quality assurance provisions.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
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: L3harris Technologies, Inc
Address: 2400 PALM BAY RD NE, PALM BAY, FL, 32905
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: $268,740,964
Exercised Options: $268,740,964
Current Obligation: $268,740,964
Actual Outlays: $1,071,210
Subaward Activity
Number of Subawards: 85
Total Subaward Amount: $26,822,963
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-11-03
Current End Date: 2022-08-19
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2024-07-31
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