DoD's $74M contract for communications equipment awarded to L3 Technologies, Inc. over nearly 8 years

Contract Overview

Contract Amount: $74,218,783 ($74.2M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-10-01

End Date: 2011-06-30

Contract Duration: 2,829 days

Daily Burn Rate: $26.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: NORTHAMPTON, HAMPSHIRE County, MASSACHUSETTS, 01060

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $74.2 million to L3 TECHNOLOGIES, INC. for work described as: Key points: 1. Contract value represents significant investment in specialized communications equipment. 2. Sole-source award suggests limited market availability or specific contractor capabilities. 3. Long duration indicates a sustained need for these services or products. 4. Firm Fixed Price contract type shifts cost risk to the contractor. 5. Awarded by the Defense Contract Management Agency, highlighting defense sector focus. 6. No small business set-aside indicates a focus on larger prime contractors.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source awards. The total value of over $74 million spread across nearly 8 years suggests an average annual spend of approximately $9.5 million. This figure needs to be assessed against the criticality and uniqueness of the communications equipment provided. Given the lack of competition, it's difficult to definitively assess if the pricing represents optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, L3 Technologies, Inc., was considered. This approach is typically employed when a unique capability, proprietary technology, or urgent need exists that cannot be met by multiple sources. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple bids had been solicited.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there's less assurance that the government secured the best possible price for the required communications equipment.

Public Impact

The primary beneficiaries are likely military personnel and units requiring advanced communications capabilities. The contract delivers essential communications equipment, crucial for operational effectiveness and command and control. Geographic impact is likely widespread, supporting defense operations globally. Workforce implications may include specialized technical roles within L3 Technologies and potentially within the DoD for operating and maintaining the equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment due to sole-source award.
Risk of vendor lock-in given the long-term nature and lack of competition.
Limited transparency into the justification for sole-source procurement.

Positive Signals

Firm Fixed Price contract aligns incentives for cost control by the contractor.
Long contract duration suggests a stable and reliable supply of critical equipment.
Award to an established contractor like L3 Technologies may indicate a proven track record.

Sector Analysis

The defense communications sector is characterized by high technological sophistication and significant government investment. Contracts in this area often involve specialized equipment designed for harsh environments and secure operations. L3 Technologies, Inc. operates within this niche, providing critical systems for military applications. Comparable spending benchmarks are difficult to establish without knowing the specific type of communications equipment, but the overall defense spending on C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) is substantial.

Small Business Impact

The absence of a small business set-aside and the sole-source nature of this award indicate that small businesses were not directly solicited as prime contractors. While L3 Technologies, Inc. may engage small businesses as subcontractors, the primary contract value does not directly benefit the small business ecosystem through set-aside provisions. This approach prioritizes a specific, likely larger, prime contractor for specialized needs.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the relevant Department of Defense contracting officers. Accountability measures are inherent in the contract terms, particularly the Firm Fixed Price structure. Transparency regarding the justification for the sole-source award would be crucial for public accountability, though detailed justifications are often not publicly disseminated.

Related Government Programs

Defense Communications Systems
Tactical Communications Equipment
Command and Control Systems
Electronic Warfare Systems

Risk Flags

Sole-source award may indicate limited competition.
Long contract duration requires sustained oversight.
Lack of specific performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.2 million to L3 TECHNOLOGIES, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is L3 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 $74.2 million.

What is the period of performance?

Start: 2003-10-01. End: 2011-06-30.

What specific type of communications equipment was procured under this contract?

The data indicates the contract falls under NAICS code 334290, 'Other Communications Equipment Manufacturing.' This broad category encompasses a wide range of products, including radio and television broadcasting and wireless communications equipment, as well as equipment for the operation of telecommunications systems. Without more specific contract line item details, it is difficult to pinpoint the exact nature of the communications equipment. However, given the awarding agency (Department of Defense) and the sole-source nature, it likely pertains to specialized, potentially classified or proprietary, systems critical for military operations, such as secure tactical radios, satellite communication terminals, or advanced networking hardware.

What was the justification for awarding this contract on a sole-source basis?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. Common justifications include: unique capabilities or proprietary technology held by a single contractor, urgent and compelling needs where competition is not feasible, or when a follow-on contract is awarded to the original source of an item that was previously competitively procured, provided certain conditions are met. For this $74 million contract awarded to L3 Technologies, Inc., the justification likely stems from specialized technical requirements, proprietary designs, or a critical operational need that only L3 Technologies could fulfill at the time of award. The specific documentation supporting this justification would reside with the contracting agency.

How does the $74.2 million total contract value compare to similar defense communications equipment procurements?

Comparing the $74.2 million total contract value requires context regarding the specific type and quantity of communications equipment procured. However, as a sole-source award over nearly 8 years (October 2003 to June 2011), the average annual expenditure was approximately $9.5 million. This figure is substantial but not extraordinary within the broader landscape of defense spending on complex systems. For instance, major platform procurements or large-scale system integrations can run into hundreds of millions or billions of dollars. This contract likely represents a significant investment in a specific, perhaps niche, capability. Benchmarking against other sole-source awards for similar specialized equipment would provide a more direct comparison, but such data is often not readily available due to classification or proprietary concerns.

What are the potential risks associated with a sole-source, firm-fixed-price contract of this magnitude and duration?

A sole-source, firm-fixed-price contract of this magnitude and duration presents several potential risks. Firstly, the lack of competition inherently increases the risk of the government paying a higher price than might be achieved through a competitive process. While the firm-fixed-price structure shifts cost overrun risk to the contractor, the initial price negotiation is critical. Secondly, a long-term sole-source award can lead to vendor lock-in, making it difficult and costly to switch providers in the future, especially if the technology becomes proprietary or deeply integrated. Thirdly, there's a risk of complacency from the contractor, as the absence of competitive pressure might reduce incentives for continuous innovation or exceptional service delivery. Finally, ensuring adequate oversight and performance monitoring is crucial to mitigate risks related to quality and delivery.

What is L3 Technologies, Inc.'s track record with the Department of Defense, particularly in communications equipment?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a long and extensive history of contracting with the Department of Defense across various sectors, including communications, intelligence, surveillance, and electronic warfare. They are a significant defense contractor known for providing a wide array of advanced technologies and systems. While this specific contract highlights their role in communications equipment manufacturing, their broader portfolio includes aerospace systems, electronic systems, and information systems. Their track record with the DoD is generally characterized by the delivery of complex, high-technology solutions. However, like any large contractor, specific contract performance can vary, and detailed reviews of past performance would typically be part of any future competitive procurement evaluations.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 50 PRINCE ST, NORTHAMPTON, MA, 01060

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline