DoD Awards L3Harris $1.57B for Production Systems, Raising Cost Concerns
Contract Overview
Contract Amount: $1,573,743,464 ($1.6B)
Contractor: L3harris Nexgen Communications LLC
Awarding Agency: Department of Defense
Start Date: 2007-04-06
End Date: 2011-12-16
Contract Duration: 1,715 days
Daily Burn Rate: $917.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: BASIC AWARD OF THE 2.1 PRODUCTION SYSTEMS
Place of Performance
Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03063
Plain-Language Summary
Department of Defense obligated $1.57 billion to L3HARRIS NEXGEN COMMUNICATIONS LLC for work described as: BASIC AWARD OF THE 2.1 PRODUCTION SYSTEMS Key points: 1. Significant contract value of $1.57 billion awarded to L3Harris. 2. Competition was full and open, suggesting potential for competitive pricing. 3. The firm-fixed-price contract type aims to control costs, but the high value warrants scrutiny. 4. The sector is Defense, specifically navigation and guidance systems.
Value Assessment
Rating: questionable
The total award of $1.57 billion is substantial. Without specific per-unit data or comparison points for similar systems, it's difficult to definitively assess value. However, the sheer scale suggests a need for rigorous cost oversight.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery. This method typically allows multiple vendors to bid, driving down costs.
Taxpayer Impact: While competition is present, the large contract value means taxpayers are still exposed to significant expenditure, necessitating careful monitoring of performance and costs.
Public Impact
Taxpayers are funding a major defense system upgrade with a substantial financial commitment. The contract supports advanced navigation and guidance technology, crucial for national security. Potential for job creation within L3Harris and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High contract value requires close monitoring.
- Potential for cost overruns despite fixed-price contract.
- Long duration of contract performance.
Positive Signals
- Awarded under full and open competition.
- Firm-fixed-price contract type.
Sector Analysis
This contract falls within the Defense sector, specifically manufacturing instruments for search, detection, navigation, guidance, aeronautical, and nautical systems. Spending in this sub-sector is driven by defense modernization and technological advancement.
Small Business Impact
The data indicates that the prime contractor is L3Harris, a large corporation. There is no explicit information provided regarding small business participation in this specific contract award.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The firm-fixed-price nature provides some cost control, but ongoing performance and financial oversight are critical.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- High total contract value.
- Potential for cost creep despite fixed-price.
- Long contract duration (over 4 years).
- Lack of detailed cost breakdown.
- Absence of specific performance metrics.
Tags
search-detection-navigation-guidance-aer, department-of-defense, nh, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.57 billion to L3HARRIS NEXGEN COMMUNICATIONS LLC. BASIC AWARD OF THE 2.1 PRODUCTION SYSTEMS
Who is the contractor on this award?
The obligated recipient is L3HARRIS NEXGEN COMMUNICATIONS LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $1.57 billion.
What is the period of performance?
Start: 2007-04-06. End: 2011-12-16.
What is the breakdown of the $1.57 billion award across different system components or phases?
A detailed breakdown of the $1.57 billion award is not provided in the available data. Understanding the allocation across specific system components, research and development, production, and sustainment would offer greater insight into the value proposition and potential cost drivers. This granularity is essential for effective oversight and future procurement planning.
What are the key performance metrics and associated penalties/incentives for L3Harris under this contract?
The provided data does not specify the key performance metrics or any associated penalties or incentives for L3Harris. For a contract of this magnitude and duration, clearly defined performance standards and a robust incentive structure are crucial for ensuring the government receives the expected value and that the contractor is motivated to meet or exceed requirements.
How does the per-unit cost of these production systems compare to industry benchmarks or previous procurements?
Without specific per-unit cost data or access to industry benchmarks for comparable systems, a direct comparison is not possible. The firm-fixed-price nature suggests an attempt to lock in costs, but the overall value assessment hinges on whether this price reflects competitive market rates and the actual cost of producing these advanced navigation and guidance instruments.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: TWO STEP
Solicitation ID: N0002407R6311
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc
Address: 44965 AVIATION DR STE 400, DULLES, VA, 20166
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,574,822,707
Exercised Options: $1,574,822,707
Current Obligation: $1,573,743,464
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2007-04-06
Current End Date: 2011-12-16
Potential End Date: 2011-12-16 00:00:00
Last Modified: 2024-01-05
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