DoD awards $143M contract for SRQ-4/ARQ-58 radio terminals to L3 Technologies
Contract Overview
Contract Amount: $143,208,123 ($143.2M)
Contractor: L3 Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2009-06-12
End Date: 2014-08-31
Contract Duration: 1,906 days
Daily Burn Rate: $75.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: THIS REQUIREMENT IS FOR MANUFACTURING, TESTING, AND DELIVERY OF SRQ-4 (KU) RADIO TERMINAL SETS (RTSS) FOR SHIP SMALL SURFACE COMBATANTS AND ARQ-58 RTS FOR THE MH-60R AIRCRAFT. TAS::17 1804::TAS
Place of Performance
Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $143.2 million to L3 TECHNOLOGIES, INC. for work described as: THIS REQUIREMENT IS FOR MANUFACTURING, TESTING, AND DELIVERY OF SRQ-4 (KU) RADIO TERMINAL SETS (RTSS) FOR SHIP SMALL SURFACE COMBATANTS AND ARQ-58 RTS FOR THE MH-60R AIRCRAFT. TAS::17 1804::TAS Key points: 1. Contract awarded to L3 Technologies for critical radio terminal sets. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Fixed Price Incentive contract type carries some risk for cost overruns. 4. Spending is within the 'Other Aircraft Parts' manufacturing sector.
Value Assessment
Rating: good
The contract value of $143M for radio terminals appears reasonable given the scope. Benchmarking against similar defense electronics contracts would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing and ensures the government receives the best value. The fixed-price incentive structure aims to balance cost control with performance.
Taxpayer Impact: Full and open competition is expected to yield a fair price for taxpayers, though the incentive structure requires monitoring to prevent excessive costs.
Public Impact
Ensures operational readiness for naval surface combatants and MH-60R aircraft. Supports advanced communication capabilities for critical military platforms. Contributes to the defense industrial base for specialized electronics.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Fixed Price Incentive contract type can lead to cost overruns if not managed carefully.
- Potential for obsolescence of radio technology over the contract duration.
Positive Signals
- Awarded under full and open competition.
- Contract supports critical defense platforms.
- Experienced contractor with relevant capabilities.
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, which is a specialized area of defense manufacturing. Spending benchmarks for similar complex electronic systems are typically in the millions to hundreds of millions.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as L3 Technologies is a large corporation. There is no indication of small business subcontracting goals in the provided data.
Oversight & Accountability
The contract was awarded by the Department of the Navy, part of the Department of Defense, which has established oversight mechanisms. However, the effectiveness of oversight for this specific contract is not detailed.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Contract type (FPI) carries inherent cost overrun risk.
- Potential for technology obsolescence within the contract period.
- Lack of detail on specific performance incentives and evaluation criteria.
- No mention of small business subcontracting goals.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ut, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $143.2 million to L3 TECHNOLOGIES, INC.. THIS REQUIREMENT IS FOR MANUFACTURING, TESTING, AND DELIVERY OF SRQ-4 (KU) RADIO TERMINAL SETS (RTSS) FOR SHIP SMALL SURFACE COMBATANTS AND ARQ-58 RTS FOR THE MH-60R AIRCRAFT. TAS::17 1804::TAS
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 Navy).
What is the total obligated amount?
The obligated amount is $143.2 million.
What is the period of performance?
Start: 2009-06-12. End: 2014-08-31.
What is the specific performance incentive tied to the 'Fixed Price Incentive' contract type, and how does it impact the final cost to the government?
The Fixed Price Incentive (FPI) contract type establishes a target cost, target profit, and a price ceiling. If the final cost is below the target, both the contractor and the government share in the savings. If the cost exceeds the target but remains below the ceiling, the contractor's profit is reduced, and the government pays more. The specific sharing ratio and ceiling are crucial for understanding the ultimate cost impact and the incentive for the contractor to control expenses.
How does the technological lifecycle of the SRQ-4 (KU) and ARQ-58 radio terminals align with the contract's duration and potential for future upgrades or replacements?
The contract duration is 1906 days (approximately 5.2 years), ending in August 2014. Given the rapid pace of technological advancement in radio communications, there's a risk that these terminals could become outdated relatively quickly. The government should consider the long-term strategy for these systems, including potential upgrade paths or the timeline for next-generation replacements to ensure sustained operational effectiveness.
What were the key evaluation criteria used during the full and open competition, and how did L3 Technologies' proposal specifically meet or exceed these requirements?
While the data confirms 'full and open competition,' it does not detail the specific evaluation criteria or L3 Technologies' scoring. Typically, criteria for such contracts include technical capability, past performance, management approach, and price. Understanding these factors would provide insight into why L3 Technologies was selected and how their proposal demonstrated superior value or capability compared to other bidders.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0001908R0083
Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)
Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $143,208,123
Exercised Options: $143,208,123
Current Obligation: $143,208,123
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2009-06-12
Current End Date: 2014-08-31
Potential End Date: 2014-08-31 00:00:00
Last Modified: 2017-01-30
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