DoD spent over $50M on optical sighting and ranging equipment from L3 Technologies, Inc

Contract Overview

Contract Amount: $50,395,010 ($50.4M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-05-31

End Date: 2013-03-01

Contract Duration: 2,101 days

Daily Burn Rate: $24.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: OPTICAL SIGHTING AND RANGING EQUIPMENT

Place of Performance

Location: NORTHAMPTON, HAMPSHIRE County, MASSACHUSETTS, 01060

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $50.4 million to L3 TECHNOLOGIES, INC. for work described as: OPTICAL SIGHTING AND RANGING EQUIPMENT Key points: 1. The contract value of over $50 million represents a significant investment in advanced optical systems. 2. Competition was conducted under 'full and open competition after exclusion of sources,' suggesting a specific justification for limiting the initial pool. 3. The contract type is 'firm fixed price,' which typically shifts cost risk to the contractor. 4. The duration of the contract was substantial, spanning over 2100 days, indicating a long-term need. 5. The product service code is not specified, making direct comparisons to similar equipment challenging. 6. The contractor, L3 Technologies, Inc., is a major defense contractor, implying experience with complex government requirements.

Value Assessment

Rating: fair

Benchmarking the value of this contract is difficult without more specific details on the exact nature of the 'optical sighting and ranging equipment.' However, a $50 million expenditure over approximately six years suggests a substantial procurement. The firm fixed price contract type indicates that the government aimed to lock in costs, but the ultimate value for money depends on the performance and longevity of the equipment delivered. Without comparable contract data for similar systems, a precise value assessment is limited.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This procurement method implies that while the competition was intended to be open, certain sources were excluded, likely due to specific technical requirements, security concerns, or prior relationships. The number of bidders is not specified, making it difficult to assess the breadth of competition. This limited competition could potentially impact price discovery, as a smaller pool of bidders might lead to less aggressive pricing.

Taxpayer Impact: The exclusion of sources, even in an otherwise open competition, may have limited the potential for the most competitive pricing for taxpayers. The government secured the equipment, but the cost-effectiveness could have been enhanced with broader participation.

Public Impact

The Department of Defense is the primary beneficiary, receiving advanced optical sighting and ranging equipment. This equipment is crucial for enhancing the situational awareness and targeting capabilities of military personnel. The contract supports the defense industrial base, particularly in the specialized manufacturing of advanced optics. Personnel operating the equipment, likely in combat or training roles, will benefit from improved performance and accuracy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price negotiation.
Lack of specific product details hinders value-for-money assessment.
Long contract duration could lead to obsolescence if technology advances rapidly.

Positive Signals

Firm fixed price contract shifts cost risk to the contractor.
Award to a major defense contractor suggests capability and experience.
Significant investment indicates a critical need for advanced defense technology.

Sector Analysis

The market for optical sighting and ranging equipment is a specialized segment within the broader defense electronics and aerospace industry. This sector is characterized by high research and development costs, stringent performance requirements, and long product lifecycles. Companies operating in this space often possess unique technological capabilities. Spending in this area is driven by the continuous need for military modernization and enhanced battlefield effectiveness. Comparable spending benchmarks are difficult to establish without knowing the precise technical specifications of the equipment procured.

Small Business Impact

There is no indication that this contract involved small business set-asides. The nature of advanced defense equipment procurement often favors large, established contractors with specialized manufacturing capabilities and extensive experience. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The impact on the broader small business ecosystem is likely minimal unless L3 Technologies, Inc. actively engaged small businesses for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm fixed price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is generally maintained through contract award databases, though specific performance details and justifications for source exclusions may be less publicly accessible.

Related Government Programs

Military Optics Procurement
Defense Targeting Systems
Advanced Sensor Technology
Naval Systems
Aeronautical Systems

Risk Flags

Limited competition justification unclear
Potential for technology obsolescence over contract duration
Lack of detailed product specifications hinders value assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.4 million to L3 TECHNOLOGIES, INC.. OPTICAL SIGHTING AND RANGING EQUIPMENT

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 $50.4 million.

What is the period of performance?

Start: 2007-05-31. End: 2013-03-01.

What specific types of optical sighting and ranging equipment were procured under this contract?

The provided data classifies the procurement under NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing) and describes the product as 'OPTICAL SIGHTING AND RANGING EQUIPMENT.' However, the exact specifications, such as magnification, range capabilities, sensor types (e.g., infrared, laser), and intended platforms (e.g., infantry, vehicle, aircraft), are not detailed. This lack of specificity makes it challenging to understand the technological sophistication and intended military applications of the equipment.

How did the 'full and open competition after exclusion of sources' process impact the final price compared to a standard full and open competition?

The 'full and open competition after exclusion of sources' clause suggests that while the competition was intended to be open, certain potential bidders were excluded from the outset. The reasons for exclusion are not provided but could stem from unique technical requirements, security clearances, or proprietary technology. This limitation on the bidder pool could potentially reduce competitive pressure, leading to higher prices than might have been achieved in a truly unrestricted full and open competition. Without knowing the number of bidders and the specific exclusions, it's difficult to quantify the exact price impact, but it implies a trade-off between ensuring specific capabilities and maximizing price competition.

What is the track record of L3 Technologies, Inc. in delivering similar optical sighting and ranging equipment to the DoD?

L3 Technologies, Inc. (now part of L3Harris Technologies) is a major defense contractor with a long history of supplying a wide range of advanced technologies, including electro-optical and infrared systems, sensors, and targeting solutions, to the U.S. military and allied nations. They have consistently been awarded significant contracts for complex defense systems. While specific details on their performance for this particular $50 million contract are not provided, their general track record suggests they possess the technical expertise and manufacturing capacity to deliver sophisticated optical and ranging equipment. Past performance reviews and contract compliance data would offer a more granular assessment.

How does the $50.4 million expenditure compare to historical DoD spending on similar optical systems?

Comparing this $50.4 million expenditure requires understanding the specific type and quantity of optical sighting and ranging equipment procured. The DoD invests billions annually in various sensor and targeting systems. If this contract represents a large-scale procurement of a critical system for multiple platforms, it might be considered a significant but not necessarily outlier investment. However, without detailed product specifications and a clear understanding of the contract's scope (e.g., number of units, technological generation), it's difficult to benchmark this specific amount against broader historical spending trends for similar categories of equipment. The duration of the contract (over 2100 days) suggests a sustained investment rather than a one-off purchase.

What are the potential risks associated with a firm fixed price contract for advanced optical equipment over a long duration?

A firm fixed price (FFP) contract shifts the risk of cost overruns to the contractor, which can be beneficial for the government by providing cost certainty. However, for advanced optical equipment procured over a long duration (2101 days in this case), there are potential risks. If the contractor underestimated costs or if material prices increase significantly, they might cut corners on quality or performance to maintain profitability, potentially impacting the equipment's effectiveness. Conversely, if the contractor significantly overestimates costs due to uncertainty, the government might pay a premium. Furthermore, rapid technological advancements during the contract period could render the procured equipment less capable or obsolete by the time of delivery or shortly thereafter, representing a risk of acquiring outdated technology.

What is the significance of the NAICS code 334511 in understanding this contract's scope?

NAICS code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' provides a broad industrial classification for the contractor's activities related to this procurement. It indicates that the equipment falls under the umbrella of sophisticated systems used for locating, tracking, and orienting. This includes a wide array of instruments, from radar and sonar systems to GPS devices and, relevantly here, optical sighting and ranging equipment. While it confirms the high-tech nature of the product, it doesn't specify the exact application (e.g., for infantry rifles, vehicle turrets, aircraft targeting pods) or the specific technologies employed (e.g., thermal imaging, laser rangefinding, night vision).

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: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002406R6282

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

Financial Breakdown

Contract Ceiling: $50,693,670

Exercised Options: $50,693,670

Current Obligation: $50,395,010

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline