Naval Sea Systems Command awarded $99.7M for optical sighting and ranging equipment, with L3 Technologies as the primary contractor

Contract Overview

Contract Amount: $99,677,485 ($99.7M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-12-21

End Date: 2011-09-30

Contract Duration: 2,474 days

Daily Burn Rate: $40.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: 200503!046515!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C6241 !A!N! !N! ! !20041221!20110930!041491895!041491895!024744476!N!KOLLMORGEN CORPORATION !347 KING ST !NORTHAMPTON !MA!01060!46330!015!25!NORTHAMPTON !HAMPSHIRE !MASS !+000022743121!N!N!000111433587!1240!OPTICAL SIGHTING AND RANGING EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !333314!E! !3! ! ! ! ! !20200930!B! ! !B! !A!N!L!2!002!B! !A!N!F! ! !N!C!N! ! ! !C!C!A!A!000!A!D!N! ! ! !Y!1700!N00024!0001! !

Place of Performance

Location: NORTHAMPTON, HAMPSHIRE County, MASSACHUSETTS, 01060

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $99.7 million to L3 TECHNOLOGIES, INC. for work described as: 200503!046515!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C6241 !A!N! !N! ! !20041221!20110930!041491895!041491895!024744476!N!KOLLMORGEN CORPORATION !347 KING ST !NORTHAMPTON !MA!01060!46330!015!25!NORTHAMPTON !HAMP… Key points: 1. Contract value of nearly $100M suggests a significant need for advanced optical systems within the Navy. 2. The contract was awarded through full and open competition, indicating a robust bidding process. 3. A long performance period of over 7 years implies a complex or ongoing requirement. 4. The primary contractor, L3 Technologies, is a major defense supplier, suggesting established capabilities. 5. The fixed-price incentive contract type aims to balance cost control with performance incentives. 6. The specific product service code (PSC) points to specialized electronics and communication equipment.

Value Assessment

Rating: good

The total award amount of $99,677,484.61 for optical sighting and ranging equipment appears substantial. Benchmarking against similar contracts for advanced defense optics is challenging without more specific technical details. However, the fixed-price incentive structure suggests an effort to manage costs while ensuring performance, which is a positive sign for value. The duration of the contract (over 7 years) also implies a significant, long-term need that the government sought to fulfill through a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The data does not specify the number of bidders, but the competitive nature of the award suggests that multiple companies likely vied for this significant contract. This level of competition is generally expected to drive more favorable pricing and innovative solutions for the government.

Taxpayer Impact: A full and open competition for a contract of this magnitude is beneficial for taxpayers as it increases the likelihood of obtaining the best value through a wide range of offers and potentially lower prices due to market forces.

Public Impact

Naval forces benefit from advanced optical sighting and ranging equipment, enhancing operational capabilities. The contract supports the development and delivery of critical defense electronics and communication equipment. The primary impact is on the Department of Defense's readiness and technological superiority. The contract likely supports a specialized workforce within the defense industry, including engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Fixed-price incentive contracts can lead to cost overruns if performance targets are not met or if scope creep occurs.
The long contract duration increases the risk of technological obsolescence or changing requirements.
Reliance on a single primary contractor, even if competitively selected, can limit future flexibility.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The fixed-price incentive structure aims to align contractor and government interests for cost-effective performance.
The contract is with a well-established defense contractor, indicating a degree of reliability and expertise.

Sector Analysis

This contract falls within the broader defense electronics and communication equipment sector. The market for such specialized optical systems is driven by technological advancements and the evolving needs of military forces worldwide. The value of this contract, nearly $100 million, is significant within this niche, reflecting the high cost of advanced defense technology. Comparable spending benchmarks would typically be found within defense budget allocations for C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems.

Small Business Impact

The provided data does not indicate any specific small business set-asides for this contract. Given the substantial value and specialized nature of optical sighting and ranging equipment, it is likely that the prime contractor, L3 Technologies, would manage subcontracting opportunities. Analysis of subcontracting plans would be necessary to determine the extent of small business participation.

Oversight & Accountability

The contract is managed by the Naval Sea Systems Command (NAVSEA), a key component of the Department of Defense. Oversight mechanisms would include contract performance monitoring, milestone reviews, and financial audits. The Defense Contract Management Agency (DCMA) also plays a role in contract administration. Transparency is generally maintained through contract award databases and reporting requirements, though specific details of performance and cost are often sensitive.

Related Government Programs

Naval Warfare Systems
Defense Electronics Procurement
Optical and Fire Control Systems
Advanced Sensor Technology
Military Communication Equipment

Risk Flags

Long contract duration may increase risk of obsolescence.
Fixed-price incentive contracts can have cost overrun potential.
Specific performance metrics and outcomes not detailed.
Number of bidders not specified for 'full and open' competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $99.7 million to L3 TECHNOLOGIES, INC.. 200503!046515!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C6241 !A!N! !N! ! !20041221!20110930!041491895!041491895!024744476!N!KOLLMORGEN CORPORATION !347 KING ST !NORTHAMPTON !MA!01060!46330!015!25!NORTHAMPTON !HAMPSHIRE !MASS !+000022743121!N!N!000111433587!1240!OPTICAL SIGHTING AND RANGING EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !333314!E! !3! ! ! ! ! !202

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 $99.7 million.

What is the period of performance?

Start: 2004-12-21. End: 2011-09-30.

What is the historical spending pattern for optical sighting and ranging equipment by the Naval Sea Systems Command?

Analyzing historical spending for optical sighting and ranging equipment by NAVSEA requires a review of contract awards over several fiscal years. While this specific contract awarded in 2004 represents a significant investment of nearly $100 million, understanding the broader trend involves examining other contracts under similar Product Service Codes (PSCs) like A7 (Electronics and Communication Equipment) or related categories. Factors influencing spending include technological upgrades, fleet modernization programs, and geopolitical demands. A comprehensive analysis would involve querying databases like FPDS or USAspending to identify the volume, value, and types of contracts awarded for similar equipment over time to discern patterns of investment and potential shifts in procurement strategies.

How does the per-unit cost of the optical sighting and ranging equipment compare to market rates or similar government contracts?

Determining the per-unit cost for this contract is challenging without detailed specifications of the 'optical sighting and ranging equipment' and the quantity procured. The total award of $99.7 million is for a definitive contract with a fixed-price incentive structure, awarded in 2004 and ending in 2011. To compare per-unit costs, one would need to know the exact number of units delivered and their specific capabilities. Market rates for advanced military-grade optical systems can vary widely based on technology, precision, and integration complexity. Government contracts for similar, albeit not identical, systems would serve as the most relevant benchmark. Without specific unit quantities and detailed technical specifications, a precise per-unit cost comparison to market or other government contracts is not feasible from the provided data.

What is the track record of L3 Technologies, Inc. in fulfilling similar defense contracts?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a substantial track record in fulfilling defense contracts, particularly in areas related to electronics, communications, and sensing systems. As a major defense contractor, the company has historically been involved in numerous programs across various branches of the U.S. military. For contracts similar to this one, involving optical sighting and ranging equipment, L3's experience would likely encompass the design, development, and production of sophisticated systems. Performance on past contracts, including adherence to schedules, quality standards, and budget constraints, would be a key indicator of their capability. Government contract databases and performance assessment reports (if publicly available) would provide more granular insights into their specific performance history relevant to this type of procurement.

What are the primary risks associated with this fixed-price incentive contract, and how were they mitigated?

Fixed-price incentive (FPI) contracts, like this one, carry inherent risks for both the government and the contractor. For the government, the primary risk is that the final cost could exceed the target price if the contractor incurs higher-than-expected costs, even with incentive clauses. Conversely, the contractor risks lower profit margins if they exceed cost targets. Mitigation strategies typically involve clearly defined performance targets, objective measurement criteria, and a well-structured sharing formula for cost savings or overruns. The government's oversight and the contractor's robust cost control measures are crucial. The long performance period (over 7 years) also introduces risks related to technological obsolescence or changing operational requirements, which might be mitigated through contract modification clauses or phased procurements.

How does this contract align with the Navy's broader strategic goals for modernization and technological advancement?

This contract for optical sighting and ranging equipment directly aligns with the Navy's strategic goals for enhancing situational awareness, target acquisition, and overall combat effectiveness. Advanced optical systems are critical for platforms operating in complex maritime environments, supporting missions ranging from navigation and surveillance to precision engagement. By investing nearly $100 million in such technology, the Navy signals a commitment to maintaining a technological edge and modernizing its fleet's capabilities. The procurement of state-of-the-art equipment is essential for platforms like surface ships and submarines to effectively operate and maintain superiority in contested domains, supporting broader naval modernization objectives.

What was the rationale for awarding a contract with a duration of over 7 years?

Awarding a contract with a duration exceeding seven years (from December 2004 to September 2011) for optical sighting and ranging equipment typically indicates a long-term, complex, or evolving requirement. Such extended periods are often necessary for the development, integration, testing, and fielding of sophisticated defense systems that may involve multiple production phases or require ongoing support and upgrades. This duration suggests that the equipment might be part of a larger platform integration or a program with a protracted lifecycle. It allows for stable planning and resource allocation for the contractor, potentially leading to efficiencies and economies of scale, while ensuring the Navy has a consistent supply of critical technology over an extended period.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 347 KING 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