DoD awards $61.1M for electro-optical sighting systems, with L3 Technologies securing the sole-source contract

Contract Overview

Contract Amount: $61,116,109 ($61.1M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-07-20

End Date: 2017-12-31

Contract Duration: 2,356 days

Daily Burn Rate: $25.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK 20 ELECTRO OPTICAL SIGHTING SYSTEM (EOSS) ACB12 PROCUREMENTS AND ENGINEERING SERVICES.

Place of Performance

Location: NORTHAMPTON, HAMPSHIRE County, MASSACHUSETTS, 01060

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $61.1 million to L3 TECHNOLOGIES, INC. for work described as: MK 20 ELECTRO OPTICAL SIGHTING SYSTEM (EOSS) ACB12 PROCUREMENTS AND ENGINEERING SERVICES. Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Fixed-price contract structure shifts performance risk to the contractor. 3. Long contract duration (2011-2017) suggests a stable, long-term requirement. 4. Focus on specialized optical instruments indicates a niche but critical defense capability. 5. Contract value falls within a moderate range for defense procurement of similar systems.

Value Assessment

Rating: fair

The contract value of $61.1 million for electro-optical sighting systems appears moderate for specialized defense equipment. Without direct comparable sole-source awards for the exact MK 20 EOSS, benchmarking is challenging. However, the fixed-price nature suggests that the contractor bore the risk of cost overruns. Further analysis would require understanding the system's complexity and the market for such niche optical instruments.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, L3 Technologies, Inc., was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when only one source is capable of meeting the requirement. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces.

Taxpayer Impact: The absence of competition for this $61.1 million contract means taxpayers may have paid a premium compared to a competitively bid scenario. Price discovery was limited, potentially leading to higher costs than if multiple vendors had vied for the contract.

Public Impact

End-users within the Department of Defense benefit from advanced sighting systems for enhanced targeting and situational awareness. The contract supports the procurement and engineering services for the MK 20 Electro-Optical Sighting System (EOSS). Geographic impact is primarily within military operational theaters where these systems are deployed. Workforce implications include specialized engineering and manufacturing roles within L3 Technologies and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification requires careful review.
Long-term contract duration could lead to vendor lock-in if not managed effectively.

Positive Signals

Fixed-price contract shifts cost overrun risk to the contractor.
Procurement of specialized optical systems addresses critical defense needs.
Contract awarded to an established defense contractor with relevant expertise.

Sector Analysis

The defense sector heavily relies on specialized optical and electronic systems for surveillance, targeting, and navigation. The market for such niche components is often characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this area is driven by evolving military requirements and the need for technological superiority. Comparable spending benchmarks would involve other procurements of advanced sighting systems or electro-optical payloads for military platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, L3 Technologies, Inc., is a large business. There is no explicit information provided regarding subcontracting plans to small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless L3 Technologies voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and inspection agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods and services at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, but contract details and performance should be available through federal procurement databases.

Related Government Programs

Defense Optics Procurement
Electro-Optical Systems
Military Sighting Systems
L3 Technologies Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award limits competition.
Potential for higher costs due to lack of competitive bidding.
Need for robust government oversight to ensure quality on fixed-price contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.1 million to L3 TECHNOLOGIES, INC.. MK 20 ELECTRO OPTICAL SIGHTING SYSTEM (EOSS) ACB12 PROCUREMENTS AND ENGINEERING SERVICES.

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 $61.1 million.

What is the period of performance?

Start: 2011-07-20. End: 2017-12-31.

What is the specific justification for the sole-source award of the MK 20 EOSS contract to L3 Technologies, Inc.?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the agency's needs. For the MK 20 EOSS, this could be due to proprietary technology held by L3 Technologies, unique manufacturing capabilities, or a lack of other qualified vendors possessing the necessary expertise and infrastructure. The Department of Defense would have conducted a source selection process to determine if competition was truly not feasible. Without access to the specific justification documentation (e.g., a Justification and Approval document), the precise reasons remain speculative but likely center on unique technical requirements or intellectual property.

How does the $61.1 million contract value compare to similar electro-optical sighting systems procured by the DoD?

Benchmarking the $61.1 million value for the MK 20 EOSS requires comparing it to similar, specialized electro-optical sighting systems. Given the 'not competed' status and the specific designation (MK 20 EOSS), it suggests a unique or highly specialized system. While exact comparisons are difficult without knowing the system's specific capabilities, resolution, and intended use, procurements for advanced targeting pods, infrared sights, or other complex optical systems for military platforms can range from tens to hundreds of millions of dollars. The value appears moderate for a sole-source, specialized defense system, but a true value assessment would necessitate detailed technical specifications and market analysis of comparable systems.

What are the key performance risks associated with a firm-fixed-price contract for complex defense electronics like the MK 20 EOSS?

The primary performance risk for the government in a firm-fixed-price (FFP) contract is that the contractor may be incentivized to reduce quality or cut corners to maintain profitability if cost overruns occur. For complex defense electronics like the MK 20 EOSS, this could manifest as defects in optical clarity, sensor performance, durability, or reliability. While the FFP structure shifts financial risk to the contractor, the government relies on robust inspection and acceptance testing to ensure the delivered system meets all specifications. The long duration of this contract (2011-2017) could exacerbate these risks if not managed with diligent oversight and quality assurance processes.

What is the historical spending trend for electro-optical sighting systems within the Department of Defense?

Historical spending on electro-optical sighting systems within the DoD is substantial and generally trends upwards, driven by continuous technological advancements and evolving battlefield requirements. The DoD consistently invests in advanced optics for various platforms, including infantry weapons, vehicles, and aircraft. While specific figures for 'electro-optical sighting systems' as a distinct category can fluctuate based on major program procurements and modernization efforts, the overall defense budget allocation for sensor and targeting technologies remains a significant portion. This $61.1 million award represents a single instance within a broader, ongoing investment in such capabilities.

What is the track record of L3 Technologies, Inc. in delivering complex electro-optical systems to the government?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a long-standing and extensive track record of delivering complex electro-optical and sensor systems to the U.S. government, particularly the Department of Defense. They are a major defense contractor known for their expertise in areas such as electro-optical/infrared (EO/IR) systems, targeting pods, reconnaissance systems, and other advanced sensor technologies. Their history includes numerous contracts for similar systems across various military branches. While specific performance details for every contract are not publicly available, their continued success in winning and executing large defense contracts suggests a generally reliable performance history in this domain.

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: 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, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $62,797,553

Exercised Options: $61,459,354

Current Obligation: $61,116,109

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline