DoD's $190.8M L3Harris contract for navigation systems lacked competition, raising cost concerns
Contract Overview
Contract Amount: $190,819,908 ($190.8M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2015-07-30
End Date: 2017-09-30
Contract Duration: 793 days
Daily Burn Rate: $240.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Defense
Official Description: TRAVEL
Place of Performance
Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014
Plain-Language Summary
Department of Defense obligated $190.8 million to L3HARRIS TECHNOLOGIES, INC. for work described as: TRAVEL Key points: 1. Significant spending on navigation systems by the Department of Defense. 2. L3Harris Technologies, Inc. is the sole awardee, indicating a lack of competition. 3. The contract type is 'COST NO FEE', which can present cost control challenges. 4. The sector is focused on advanced navigation and guidance systems for defense.
Value Assessment
Rating: questionable
The contract's 'COST NO FEE' structure, coupled with a lack of competition, makes it difficult to assess value for money. Without competitive bids, it's hard to benchmark pricing against market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, suggesting a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to drive down prices.
Taxpayer Impact: The absence of competition likely resulted in a higher price than if multiple vendors had vied for the contract, impacting taxpayer funds.
Public Impact
Taxpayers may have overpaid due to the lack of competitive bidding. Reliance on a single contractor for critical navigation systems could pose a supply chain risk. The advanced nature of the systems suggests a significant investment in national defense capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
Positive Signals
- Awarded to a known defense contractor
- Supports critical defense systems
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on advanced navigation and guidance systems. Spending in this area is crucial for military operations, but often involves high R&D costs and specialized production.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this contract. The focus appears to be on a large, established prime contractor.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to ensure the government received fair pricing and that the sole-source justification was robust. Accountability for cost management is crucial with 'COST NO FEE' contracts.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Sole-source award
- Cost-plus contract type
- Potential for inflated pricing
- Limited visibility into cost controls
Tags
search-detection-navigation-guidance-aer, department-of-defense, nj, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $190.8 million to L3HARRIS TECHNOLOGIES, INC.. TRAVEL
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 $190.8 million.
What is the period of performance?
Start: 2015-07-30. End: 2017-09-30.
What was the justification for not competing this significant contract, and was a thorough market analysis conducted to ensure fair pricing?
The justification for not competing this contract is not detailed in the provided data. A thorough market analysis is essential to validate fair pricing, especially in sole-source awards. Without this information, it's difficult to ascertain if taxpayers received optimal value or if alternative solutions were explored.
What are the specific risks associated with relying on a single vendor for these critical navigation systems, particularly concerning future upgrades or supply chain disruptions?
Relying on a single vendor creates significant risks, including potential supply chain vulnerabilities, lack of innovation due to no competitive pressure, and difficulties in negotiating future upgrades or repairs. If L3Harris faces production issues or decides to discontinue a component, the DoD could face substantial delays and increased costs to find an alternative.
How effectively has the 'COST NO FEE' contract structure managed costs, and what mechanisms are in place to ensure contractor efficiency and prevent unnecessary expenditures?
The 'COST NO FEE' structure inherently places the cost risk on the government, making effective cost management crucial. Without specific performance metrics or detailed cost reports, it's challenging to assess efficiency. Robust oversight, regular audits, and clear performance benchmarks are vital to ensure the contractor operates efficiently and taxpayer funds are not wasted.
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
Solicitation ID: N0001914R4007
Offers Received: 1
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc
Address: 77 RIVER RD, CLIFTON, NJ, 07014
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $194,082,834
Exercised Options: $190,819,908
Current Obligation: $190,819,908
Subaward Activity
Number of Subawards: 210
Total Subaward Amount: $421,260,391
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-07-30
Current End Date: 2017-09-30
Potential End Date: 2017-09-30 00:00:00
Last Modified: 2022-07-20
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