Navy awards $58.6M contract for MUSV DD&F to L3 Technologies, Inc., with a 5-year performance period

Contract Overview

Contract Amount: $58,655,312 ($58.7M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-07-13

End Date: 2026-07-13

Contract Duration: 2,191 days

Daily Burn Rate: $26.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: MUSV DD&F

Place of Performance

Location: CAMDEN, CAMDEN County, NEW JERSEY, 08102

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $58.7 million to L3 TECHNOLOGIES, INC. for work described as: MUSV DD&F Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Fixed Price Incentive contract type indicates shared risk between government and contractor. 3. Performance period of 5 years allows for long-term project execution and potential for sustained value. 4. Contractor L3 Technologies, Inc. has a significant presence in the defense sector. 5. The contract is for Ship Building and Repairing, a critical defense capability. 6. Awarded by the Department of the Navy, highlighting a key defense procurement. 7. The contract value of $58.6M falls within a moderate spending range for major defense systems.

Value Assessment

Rating: good

The contract value of $58.6M for MUSV DD&F appears reasonable given the 5-year performance period and the nature of shipbuilding and repair services. Benchmarking against similar complex defense system development and fielding contracts would provide a more precise value-for-money assessment. The Fixed Price Incentive (FPI) contract type suggests that cost efficiencies achieved by the contractor can lead to shared savings, potentially benefiting the government.

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 presence of 5 bids suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are likely being used efficiently by driving down costs through a competitive bidding environment.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational readiness, through the acquisition of the MUSV DD&F system. The services delivered are critical for naval capabilities, likely involving advanced technology development and integration for maritime surveillance. The geographic impact is primarily within New Jersey, where the contractor is located, potentially creating or sustaining jobs in the region. Workforce implications include skilled labor in shipbuilding, engineering, and defense technology within the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in fixed-price incentive contracts if performance targets are not met efficiently.
Long performance period could introduce risks related to technological obsolescence or changing mission requirements.
Dependence on a single contractor for a critical defense capability could pose supply chain risks.

Positive Signals

Award through full and open competition suggests a robust selection process and potential for competitive pricing.
Fixed Price Incentive contract type aligns contractor and government interests towards achieving performance goals cost-effectively.
Contractor's established presence in the defense sector implies experience and capability in delivering complex systems.

Sector Analysis

The Ship Building and Repairing sector is a vital component of the defense industrial base, characterized by high capital investment, specialized labor, and long production cycles. This contract for MUSV DD&F fits within the broader category of defense procurement for naval platforms and systems. Comparable spending benchmarks in this sector often involve multi-year, high-value contracts for complex vessels and associated technologies.

Small Business Impact

While this contract was awarded under full and open competition and does not explicitly mention small business set-asides, the prime contractor, L3 Technologies, Inc., may engage small businesses for subcontracting opportunities. The extent of small business participation will depend on L3's subcontracting plan and the availability of qualified small businesses capable of providing specialized goods or services for this complex project.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Fixed Price Incentive contract type, which links contractor profit to performance outcomes. Transparency is facilitated through contract award announcements and potential reporting requirements, though specific oversight details are not provided.

Related Government Programs

Naval Ship Systems
Maritime Surveillance Platforms
Defense Technology Development
Shipbuilding and Repair Contracts
Unmanned Maritime Systems

Risk Flags

Potential for cost overruns due to FPI contract type.
Risk of technological obsolescence over the 5-year performance period.
Dependence on a single prime contractor for critical capability.
Complexity of integrating advanced technologies in maritime systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.7 million to L3 TECHNOLOGIES, INC.. MUSV DD&F

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $58.7 million.

What is the period of performance?

Start: 2020-07-13. End: 2026-07-13.

What is the historical spending pattern for MUSV DD&F or similar systems by the Department of the Navy?

Historical spending on Maritime Unmanned Surface Vehicles (MUSV) and related Development, Demonstration, and Fielding (DD&F) programs by the Department of the Navy can vary significantly based on program maturity and scope. While specific historical data for MUSV DD&F is not detailed here, the $58.6 million award for a 5-year period suggests a substantial investment in developing and fielding this capability. Prior investments in unmanned systems, naval platforms, and associated technologies provide context. For instance, other unmanned maritime programs have seen multi-year funding cycles ranging from tens to hundreds of millions of dollars, depending on whether they are in research, development, prototyping, or full-rate production phases. Analyzing past budgets allocated to similar naval modernization efforts or unmanned system initiatives would offer a clearer picture of the Navy's commitment and spending trends in this domain.

How does the per-unit cost of the MUSV DD&F compare to market rates or similar government contracts?

Determining a precise per-unit cost for the MUSV DD&F is challenging without knowing the number of units to be delivered under this $58.6 million contract and the specific definition of 'unit' (e.g., a single vessel, a system package). However, given the contract's focus on Development, Demonstration, and Fielding (DD&F), a significant portion of the cost likely pertains to research, design, prototyping, testing, and initial integration rather than mass production. For advanced defense systems, especially those involving novel technologies like unmanned maritime vehicles, per-unit costs can be substantially higher during development phases compared to later production runs. Benchmarking against other government contracts for complex unmanned systems or specialized naval platforms would be necessary for a meaningful comparison. The Fixed Price Incentive (FPI) nature of the contract suggests that cost targets are established, and deviations will impact profit, implying an effort to control per-unit costs.

What is L3 Technologies, Inc.'s track record with similar defense contracts, particularly with the Department of the Navy?

L3 Technologies, Inc. (now part of L3Harris Technologies) has a substantial track record in delivering complex systems and services to the Department of Defense, including the Navy. Their portfolio often includes areas such as intelligence, surveillance, and reconnaissance (ISR) systems, electronic warfare, communications, and advanced maritime solutions. The company has been involved in numerous contracts for naval platforms, sensors, and integrated systems. For contracts similar to MUSV DD&F, which involves development and fielding of maritime capabilities, L3Harris's experience in systems integration, platform modification, and technology insertion would be relevant. A review of their past performance on large-scale naval programs, particularly those involving unmanned systems or advanced sensor integration, would provide insight into their capability to execute this specific contract successfully. Their history with the Navy suggests a familiarity with the service's requirements and procurement processes.

What are the key performance indicators (KPIs) and risk mitigation strategies associated with this contract?

Key performance indicators (KPIs) for a MUSV DD&F contract would likely focus on technical performance (e.g., range, endurance, sensor capabilities, reliability), schedule adherence, and successful demonstration of operational capabilities. Given the Fixed Price Incentive (FPI) contract type, KPIs are intrinsically linked to achieving target cost, performance, and delivery milestones, with profit adjusted based on performance against these targets. Risk mitigation strategies would involve robust program management, thorough testing and evaluation phases, contingency planning for technical challenges, and proactive engagement with the supply chain. The Department of the Navy would also employ contract surveillance and oversight to monitor progress and identify potential issues early. The 5-year duration necessitates managing risks associated with technological evolution and potential shifts in strategic requirements.

How does the competition level (5 bidders) impact the potential value and innovation for this contract?

A competition involving five bidders for the MUSV DD&F contract is generally considered a healthy level of engagement, suggesting that multiple companies possessed the capability and interest to pursue this requirement. This level of competition typically drives down prices as bidders strive to offer the most attractive proposals to win the contract. Furthermore, a diverse set of bidders can foster innovation, as each company may bring unique technical approaches, solutions, or efficiencies to the table. The government can then select the proposal that best balances cost, technical merit, and overall value. The presence of five competitors increases the likelihood that the selected solution will be cost-effective and incorporate advanced or innovative features, ultimately benefiting the taxpayer and the Navy's operational capabilities.

What is the anticipated impact of this contract on the small business ecosystem, considering it's not a set-aside?

While this contract was awarded under full and open competition and is not a small business set-aside, its impact on the small business ecosystem is not necessarily negative. Prime contractors like L3 Technologies, Inc. often rely on a network of subcontractors to fulfill complex requirements. It is probable that L3 Technologies will seek to engage small businesses for specialized components, services, or manufacturing support related to the MUSV DD&F. The extent of this engagement will depend on L3's subcontracting plan and the specific needs of the project. Government agencies typically encourage prime contractors to maximize small business participation in their supply chains, even on non-set-aside contracts. Therefore, this contract could create opportunities for small businesses to contribute to a significant defense program, potentially leading to revenue, experience, and growth within the small business sector.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002419R6302

Offers Received: 5

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 2 FEDERAL ST, CAMDEN, NJ, 08102

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: $283,212,770

Exercised Options: $105,739,252

Current Obligation: $58,655,312

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline