DoD awards $1.7B contract for NGJ LB CB1 Development to L3 Technologies, Inc

Contract Overview

Contract Amount: $169,552,755 ($169.6M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-08-26

End Date: 2029-08-24

Contract Duration: 1,824 days

Daily Burn Rate: $93.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: R&D

Official Description: NGJ LB CB1 DEVELOPMENT

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $169.6 million to L3 TECHNOLOGIES, INC. for work described as: NGJ LB CB1 DEVELOPMENT Key points: 1. Contract awarded through full and open competition, suggesting a robust market. 2. Cost Plus Incentive Fee (CPIF) contract type introduces performance-based incentives. 3. Long duration of 1824 days indicates a significant, multi-year development effort. 4. The contract is for Research and Development in Biotechnology, a critical sector. 5. Awarded by the Department of the Navy, highlighting defense-related R&D focus. 6. The contract value of $1.7B represents a substantial investment in this area.

Value Assessment

Rating: good

The contract value of $1.7 billion for a 5-year R&D effort in biotechnology appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar large-scale defense R&D contracts is challenging due to the specialized nature of biotechnology. However, the CPIF contract type suggests an effort to control costs through performance incentives, which is a positive sign for value for money. Further analysis would require detailed cost breakdowns and comparison to industry R&D investment benchmarks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited and allowed to bid. The presence of two bidders (no: 2) suggests a competitive environment, though the exact number of proposals received and the evaluation process would provide a clearer picture of the competition's intensity. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and ensures the government receives the best possible value by considering a wide range of solutions.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the broader national security apparatus, which will receive advancements in biotechnology. The contract will deliver research and development services aimed at enhancing specific defense capabilities. The geographic impact is primarily within Utah (sn: UTAH), where the contractor is located, but the technological advancements could have national implications. Workforce implications include potential job creation in specialized biotechnology research and development roles within L3 Technologies, Inc. and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can sometimes lead to cost overruns if not managed rigorously, as the contractor is reimbursed for costs plus a fee that can increase with performance.
The long contract duration of nearly five years presents a risk of technological obsolescence or shifting strategic priorities.
The specialized nature of biotechnology R&D means that success is not guaranteed, and the government may not achieve its desired outcomes despite significant investment.

Positive Signals

Awarded through full and open competition, indicating a competitive process that should yield good value.
The use of an incentive fee structure encourages contractor performance and efficiency.
The contract is with a known entity, L3 Technologies, Inc., suggesting a degree of contractor reliability.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on biotechnology. The biotechnology market is characterized by high innovation, significant investment, and long development cycles. Government spending in this area, particularly for defense applications, is crucial for maintaining technological superiority. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of defense-specific biotech R&D, but the $1.7 billion figure signifies a major program investment.

Small Business Impact

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

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. The Cost Plus Incentive Fee structure necessitates close monitoring of costs and performance against defined metrics. Transparency will depend on the reporting requirements stipulated in the contract and any public disclosures made by the agency. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Biotechnology Research and Development Programs
Advanced Defense Technologies
Naval Research and Development Contracts
National Security Innovation Fund

Risk Flags

Long contract duration may lead to technological obsolescence.
CPIF contracts require diligent oversight to manage costs effectively.
Biotechnology R&D is inherently high-risk with uncertain outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $169.6 million to L3 TECHNOLOGIES, INC.. NGJ LB CB1 DEVELOPMENT

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 $169.6 million.

What is the period of performance?

Start: 2024-08-26. End: 2029-08-24.

What is L3 Technologies, Inc.'s track record with similar large-scale R&D contracts, particularly within the Department of Defense?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a significant history of performing complex R&D and production contracts for the Department of Defense across various domains, including aerospace, communications, and electronic warfare. While specific biotechnology R&D contract performance data for this exact entity and scale is not detailed here, their overall track record suggests experience with large, technically demanding projects. The company's financial stability and past performance reviews, typically assessed during the bidding process, would have been critical factors in this award. A deeper dive into their contract history, including any past performance issues or successes in R&D, would provide further context on their suitability for this specific biotechnology development effort.

How does the $1.7 billion contract value compare to other biotechnology R&D investments by the DoD or similar agencies?

The $1.7 billion contract value for a 5-year biotechnology R&D effort is substantial and indicates a high-priority program for the Department of the Navy. While precise comparisons are difficult due to the specialized nature of defense-focused biotechnology and the proprietary nature of R&D investments, this figure suggests a significant commitment. For context, major federal agencies like the National Institutes of Health (NIH) fund numerous biotechnology research projects, but often through grants and smaller contracts spread across many institutions. Large, single-award development contracts of this magnitude are more common in defense acquisition for developing specific technological capabilities rather than broad scientific exploration. This award likely represents a significant portion of the Navy's strategic investment in this particular area of biotechnology.

What are the key performance indicators (KPIs) and incentive structures within this Cost Plus Incentive Fee (CPIF) contract?

The specific Key Performance Indicators (KPIs) and incentive fee structures for this NGJ LB CB1 Development contract are not publicly detailed in the provided data. However, in a CPIF contract, the government reimburses the contractor for allowable costs plus a fee that is adjusted based on performance against pre-defined targets. These targets typically relate to technical objectives, schedule milestones, or cost control. For this biotechnology R&D contract, KPIs could include achieving specific research breakthroughs, demonstrating prototype functionality, meeting certain performance metrics for a developed technology, or adhering to development timelines. The incentive fee would likely be structured to reward exceeding targets and penalize falling short, aiming to align the contractor's profit motive with the government's desired outcomes.

What are the potential risks associated with the long contract duration (1824 days) for a biotechnology R&D project?

A contract duration of 1824 days (approximately 5 years) for a biotechnology R&D project carries several inherent risks. Firstly, the rapid pace of scientific advancement in biotechnology means that technologies developed early in the contract could become outdated or superseded by newer innovations before the project concludes. Secondly, strategic priorities within the Department of Defense can shift over a five-year period due to geopolitical changes or evolving threat assessments, potentially rendering the developed technology less relevant or requiring significant pivots. Thirdly, maintaining contractor focus and motivation over such an extended period can be challenging. Finally, long-term funding stability for R&D projects can be subject to annual appropriations and budget reviews, introducing financial uncertainty.

What is the significance of the 'Research and Development in Biotechnology (except Nanobiotechnology)' classification (NA: 541714) for this contract?

The NAICS code 541714, 'Research and Development in Biotechnology (except Nanobiotechnology),' precisely defines the scope of work for this contract. It signifies that the contract is focused on scientific inquiry and experimentation within the field of biotechnology, excluding areas specifically related to nanotechnology. This classification helps ensure that the contract is awarded to entities with the appropriate expertise and capabilities in biological sciences, genetic engineering, pharmaceutical development, or other related biotech fields. It also guides the government's procurement process by setting clear expectations for the type of research and development services required, differentiating it from other R&D categories like materials science or computer engineering.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in Biotechnology (except Nanobiotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001919R0069

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116

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: $587,386,007

Exercised Options: $587,386,007

Current Obligation: $169,552,755

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $32,403,335

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline