Naval Sea Systems Command awarded $139.7M contract for towed sonar array engineering services

Contract Overview

Contract Amount: $46,449,231 ($46.4M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 1996-11-14

End Date: 2013-06-30

Contract Duration: 6,072 days

Daily Burn Rate: $7.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199705!1700!1261!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002496C6214 !A!*!P00006 !19961114!19970930!139693436!139693436!139691877!N!017N4!ALLIEDSIGNAL INC !15825 ROXFORD ST !SYLMAR !CA!91342!77546!037!06!SYLMAR !LOS ANGELES !CALIFORNIA!0001!+000000300000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !2GTP!TOWED SONAR ARRAY !3669!3!*!*!H!B!A!*!D !N!U!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SYLMAR, LOS ANGELES County, CALIFORNIA, 91342

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $46.4 million to L3 TECHNOLOGIES, INC. for work described as: 199705!1700!1261!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002496C6214 !A!*!P00006 !19961114!19970930!139693436!139693436!139691877!N!017N4!ALLIEDSIGNAL INC !15825 ROXFORD ST !SYLMAR !CA!91342!77546!037!06!SYLMAR !LOS AN… Key points: 1. Contract awarded for specialized engineering and technical services related to towed sonar arrays. 2. Significant contract duration of over 5 years suggests a long-term need for these services. 3. The award was not competed, raising questions about potential cost efficiencies and market engagement. 4. Services provided are critical for naval sonar capabilities, impacting fleet readiness. 5. The contractor, AlliedSignal Inc., has a history of providing defense-related services. 6. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully.

Value Assessment

Rating: fair

The contract value of $139.7 million over approximately 60 months represents a substantial investment in specialized engineering services. Without comparable contract data for similar towed sonar array engineering services, a precise value-for-money assessment is challenging. However, the 'not competed' nature of the award suggests potential missed opportunities for competitive pricing, which could have driven down costs. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, also carries inherent risks of cost escalation if not rigorously overseen.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or proprietary technology required for the service. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there is less assurance that the pricing reflects the most efficient cost structure available in the market.

Public Impact

Naval forces benefit from enhanced sonar capabilities through the engineering and technical services provided. The services directly support the development, maintenance, and improvement of towed sonar array systems. This contract contributes to the operational readiness and technological superiority of the U.S. Navy. The contract supports specialized engineering jobs within the defense sector, likely in California where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type increases risk of cost overruns.
Sole-source award limits price discovery and potential cost savings.
Long contract duration may not reflect evolving technological needs or market efficiencies.
Lack of competition could indicate potential barriers to entry for other qualified firms.

Positive Signals

Contract addresses a critical naval capability (towed sonar arrays).
Contractor has a history of providing defense-related services.
Services are essential for maintaining and improving sonar system performance.
Award supports specialized engineering expertise within the defense industrial base.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on specialized engineering and technical services for naval systems. The market for such niche defense services is often characterized by a limited number of highly specialized contractors. Spending in this area is driven by national security requirements and the need for advanced technological capabilities. Comparable spending benchmarks would likely be found within other naval platform support contracts or advanced sonar system development programs.

Small Business Impact

There is no indication in the provided data that this contract included small business set-asides or subcontracting requirements. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for subcontracting opportunities, which is not specified here.

Oversight & Accountability

Oversight for this contract would typically fall under the Naval Sea Systems Command (NAVSEA) and the Defense Contract Management Agency (DCMA). As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to ensure cost control and adherence to technical specifications. Transparency may be limited due to the sole-source nature, but contract performance reviews and audits would be standard oversight mechanisms.

Related Government Programs

Naval Sonar Systems
Towed Array Sonar
Defense Engineering Services
Naval Sea Systems Command Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Sole-source award may limit cost efficiency.
CPFF contract type carries inherent cost overrun risk.
Lack of detailed performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.4 million to L3 TECHNOLOGIES, INC.. 199705!1700!1261!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002496C6214 !A!*!P00006 !19961114!19970930!139693436!139693436!139691877!N!017N4!ALLIEDSIGNAL INC !15825 ROXFORD ST !SYLMAR !CA!91342!77546!037!06!SYLMAR !LOS ANGELES !CALIFORNIA!0001!+000000300000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !2GTP!TOWED SONAR ARRAY !3669!3!*!*!H!B!A!*!D !N!U!1!0

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 $46.4 million.

What is the period of performance?

Start: 1996-11-14. End: 2013-06-30.

What is the specific technical nature of the 'ENGINEERING TECHNICAL SERVICES' provided under this contract for towed sonar arrays?

The provided data indicates the contract is for 'ENGINEERING TECHNICAL SERVICES' related to 'TOWED SONAR ARRAY'. While specific details are not elaborated, this typically encompasses a range of activities including design, development, testing, integration, maintenance, and lifecycle support for towed sonar systems. These systems are crucial for naval vessels to detect submarines and other underwater objects. The services likely involve complex acoustic engineering, signal processing, hardware integration, and software development to ensure the optimal performance and reliability of these sophisticated arrays in various operational environments.

Why was this contract awarded on a sole-source basis instead of being competed?

The contract was awarded on a sole-source basis, as indicated by 'CT: NOT COMPETED'. This implies that the Naval Sea Systems Command determined that only one responsible source, AlliedSignal Inc. (now part of Honeywell), was capable of providing the required engineering technical services for the towed sonar array. Reasons for sole-sourcing often include unique technical expertise, proprietary technology, existing system integration knowledge, or urgent requirements where competition is not feasible. Without further documentation from the agency justifying the sole-source determination, the precise rationale remains speculative but points to a perceived lack of alternatives.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost to taxpayers?

The Cost Plus Fixed Fee (CPFF) contract type allows the contractor to recover all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some cost certainty for the contractor's profit, the total cost to the government can fluctuate significantly based on the actual costs incurred. This structure can incentivize contractors to incur costs, as they are reimbursed for them, potentially leading to higher overall expenditures compared to fixed-price contracts if not managed with stringent oversight. Taxpayers bear the risk of cost overruns, making effective government monitoring of contractor expenses and performance critical.

What is the historical spending trend for similar towed sonar array engineering services by the Department of Defense?

The provided data only details this specific contract awarded in 1996. To assess historical spending trends for similar services, a broader analysis of Department of Defense (DoD) procurement data would be necessary. This would involve searching for other contracts related to towed sonar arrays, sonar systems, and naval engineering services across different fiscal years and agencies within the DoD. Without access to such a comprehensive dataset, it is impossible to establish a historical spending trend. However, given the critical nature of sonar technology for naval operations, it is reasonable to assume consistent, albeit potentially fluctuating, investment in this area over time.

What is the track record of AlliedSignal Inc. in providing defense-related engineering services prior to and during this contract period?

AlliedSignal Inc. was a major aerospace and automotive company with a significant defense sector prior to its merger with Honeywell in 1999. During the period of this contract (1996-2013), AlliedSignal, and subsequently Honeywell, had a well-established track record in providing complex engineering, manufacturing, and technical services to the U.S. military. They were known for their work in avionics, propulsion systems, and other advanced technologies. Their involvement in naval systems, including sonar-related components or services, would align with their broad capabilities in defense contracting. The successful award and execution of this substantial contract suggest a positive performance history relevant to naval engineering needs.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract that indicate its effectiveness?

The provided data snippet does not include specific performance metrics or Key Performance Indicators (KPIs) for this contract. Typically, such details would be found within the contract's statement of work (SOW) or performance work statement (PWS). For engineering technical services, KPIs might include factors like on-time delivery of technical reports, successful completion of system upgrades or modifications, adherence to technical specifications, system reliability improvements, and responsiveness to technical queries. The absence of this information in the summary data limits the ability to quantitatively assess the contract's effectiveness beyond its successful award and duration.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L-3 Communications Holdings, Inc.

Address: 15825 ROXFORD ST, SYLMAR, CA, 91342

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline