DoD awards $76.6M for NRE - KUWAIT, with L3Harris Technologies Inc. as sole provider
Contract Overview
Contract Amount: $76,597,578 ($76.6M)
Contractor: L3harris Technologies, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-11-08
End Date: 2026-06-30
Contract Duration: 2,426 days
Daily Burn Rate: $31.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NRE - KUWAIT
Place of Performance
Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014
Plain-Language Summary
Department of Defense obligated $76.6 million to L3HARRIS TECHNOLOGIES, INC. for work described as: NRE - KUWAIT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of over 2400 days suggests a long-term need. 3. Cost Plus Fixed Fee contract type may incentivize cost overruns. 4. No small business set-aside indicates potential for large prime contractor. 5. The contract is for Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. 6. Awarded by the Department of the Navy, indicating a defense-related procurement.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and specific application (NRE - KUWAIT). Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The Cost Plus Fixed Fee structure, while allowing for flexibility, can sometimes lead to higher overall costs compared to fixed-price contracts if not managed rigorously. Further analysis would require understanding the specific deliverables and the contractor's cost structure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, L3Harris Technologies, Inc., was considered. This significantly limits the opportunity for price discovery and competition, potentially leading to higher costs for the government. The absence of multiple bids means there was no direct comparison of capabilities or pricing from other potential suppliers.
Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding processes.
Public Impact
The Department of Defense benefits from specialized systems and instruments for search, detection, and navigation. Personnel involved in naval operations, particularly in Kuwait, will utilize the systems procured under this contract. The contract supports advanced technological capabilities crucial for national security. The geographic impact is focused on operations related to Kuwait.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
- Lack of transparency in the sole-source justification requires scrutiny.
- Long contract duration may lead to scope creep or outdated technology if not managed effectively.
Positive Signals
- L3Harris Technologies is a known entity in defense contracting, suggesting established capabilities.
- The contract addresses specific, potentially critical, operational needs for the Navy.
- The fixed fee component provides some cost certainty for the contractor's effort.
Sector Analysis
This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on specialized navigation and detection systems. The market for such systems is often characterized by high barriers to entry due to technological complexity and stringent quality requirements. Comparable spending in this niche can vary widely, but significant government investment is typical for advanced defense instrumentation.
Small Business Impact
The contract does not indicate any small business set-aside provisions. This suggests that the prime contract was awarded to a large business, L3Harris Technologies, Inc. While large prime contractors are often required to subcontract a portion of their work to small businesses, the absence of a specific set-aside on the prime contract itself means that opportunities for small businesses are dependent on the prime's subcontracting plan and may not be maximized.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the Cost Plus Fixed Fee contract terms, requiring detailed reporting and auditing of costs. Transparency may be limited due to the sole-source nature, but contract modifications and performance reviews should be documented. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Naval Navigation Systems
- Defense Electronics Manufacturing
- Search and Detection Equipment
- Aeronautical and Nautical Instruments
Risk Flags
- Sole-source award requires justification.
- Cost Plus Fixed Fee contract type can lead to cost overruns.
- Long contract duration may result in technology obsolescence.
Tags
defense, department-of-defense, department-of-the-navy, l3harris-technologies, sole-source, cost-plus-fixed-fee, nre-kuwait, search-detection-navigation-guidance-aeronautical-and-nautical-system-and-instrument-manufacturing, new-jersey, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $76.6 million to L3HARRIS TECHNOLOGIES, INC.. NRE - KUWAIT
Who is the contractor on this award?
The obligated recipient is L3HARRIS 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 $76.6 million.
What is the period of performance?
Start: 2019-11-08. End: 2026-06-30.
What is the specific justification for awarding this contract on a sole-source basis to L3Harris Technologies, Inc.?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source is available, or when there is a compelling urgency, or for reasons of industrial mobilization or national security. For this contract, the justification would likely stem from unique technological capabilities, proprietary systems, or a critical need that only L3Harris could fulfill within the required timeframe and specifications. A detailed review of the contract file and associated documentation would be necessary to ascertain the precise rationale.
How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and potential cost for the government?
The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not clearly defined or is subject to change, offering flexibility. The government agrees to pay the contractor's actual costs plus a fixed fee, representing profit. While the fixed fee provides some cost certainty for the contractor's profit, the government bears the risk of cost overruns if actual costs exceed estimates. This contrasts with fixed-price contracts, where the contractor assumes more risk for cost overruns but the government has greater price certainty. CPFF contracts require robust oversight to ensure costs are reasonable and allocable.
What are the potential implications of the long contract duration (over 2400 days) on technology obsolescence and program management?
A contract duration exceeding 2400 days (approximately 6.7 years) presents significant risks related to technology obsolescence. Systems and components procured may become outdated before the contract's end, requiring costly upgrades or replacements. Effective program management is crucial to mitigate this. This includes proactive technology refresh strategies, incorporating clauses for modernization, and continuous monitoring of technological advancements in the field. Without such measures, the government risks acquiring systems that are no longer state-of-the-art or are difficult to maintain due to parts unavailability.
Are there any performance metrics or key performance indicators (KPIs) associated with this contract to measure L3Harris Technologies' success?
The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) for this contract. However, for a Cost Plus Fixed Fee contract, performance is typically evaluated based on the contractor's ability to deliver the required goods or services within the agreed-upon scope, schedule, and quality standards, while managing costs effectively. Specific KPIs would likely be detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS) and could include metrics related to system functionality, reliability, delivery timelines for milestones, and adherence to technical specifications.
What is the historical spending pattern for similar 'NRE - KUWAIT' related procurements by the Department of the Navy?
The provided data is specific to a single contract and does not offer historical spending patterns for 'NRE - KUWAIT' related procurements. To analyze historical spending, one would need access to a broader dataset of federal contracts, filtering by agency (Department of the Navy), keywords (like 'Kuwait', 'NRE', or specific system types), and contract type. Without this broader context, it's impossible to determine if this $76.6 million award represents an increase, decrease, or consistent level of spending compared to previous periods or similar requirements.
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: 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: $76,597,578
Exercised Options: $76,597,578
Current Obligation: $76,597,578
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001916G0003
IDV Type: BOA
Timeline
Start Date: 2019-11-08
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2025-09-09
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