DoD's $30.8M MIDS JTRS MMI2 Contract Awarded to L3 Technologies Raises Competition Concerns

Contract Overview

Contract Amount: $30,822,204 ($30.8M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-03-02

End Date: 2022-04-29

Contract Duration: 1,154 days

Daily Burn Rate: $26.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MIDS JTRS MMI2

Place of Performance

Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.8 million to L3 TECHNOLOGIES, INC. for work described as: MIDS JTRS MMI2 Key points: 1. Significant contract value of over $30.8 million awarded to a single vendor. 2. Lack of competition raises questions about potential overpricing and value for taxpayer money. 3. The contract falls under the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' sector. 4. Potential risks include limited innovation and reduced leverage in future negotiations due to sole-source award.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a definitive pricing assessment difficult. Without comparative data from other similar contracts or competitive bids, it's hard to determine if the $30.8 million represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for the government as there is no competitive pressure to drive down prices.

Taxpayer Impact: The lack of competition in this sole-source award potentially results in higher costs for taxpayers, as the government may not have secured the best possible price.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. Limited visibility into the specific components and services procured under this contract. Potential for reduced technological advancement if alternative solutions were not explored. The Department of the Navy's reliance on a single vendor for this equipment could pose a supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Cost-plus-fixed-fee contract type
No small business participation reported

Positive Signals

Contract awarded to a known entity (L3 Technologies)
Specific equipment type identified (MIDS JTRS MMI2)

Sector Analysis

This contract falls within the 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing' sector. Spending in this area can vary widely, but competitive procurement is generally expected to yield better value.

Small Business Impact

There is no indication of small business participation in this contract. Sole-source awards often bypass opportunities for small businesses to compete and contribute.

Oversight & Accountability

The lack of competition suggests potential gaps in oversight regarding procurement strategies. Further review is needed to understand why this contract was not competed and if adequate justification exists.

Related Government Programs

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award lacks competition.
Potential for inflated costs due to lack of price discovery.
Cost-plus-fixed-fee structure offers limited cost control.
No reported small business participation.
Potential for vendor lock-in and reduced innovation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.8 million to L3 TECHNOLOGIES, INC.. MIDS JTRS MMI2

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 $30.8 million.

What is the period of performance?

Start: 2019-03-02. End: 2022-04-29.

What specific justification was provided for the sole-source award of the MIDS JTRS MMI2 contract, and does it align with federal procurement regulations?

The provided data indicates the contract was 'NOT COMPETED,' suggesting a sole-source justification was applied. Federal regulations (like FAR Part 6) allow for sole-source procurements under specific circumstances, such as when only one responsible source can provide the required supplies or services. A thorough review of the justification document is necessary to confirm its validity and ensure it meets the stringent criteria for non-competitive awards.

How does the cost-plus-fixed-fee structure, combined with the sole-source nature, impact the government's ability to ensure cost-effectiveness for this $30.8 million award?

The cost-plus-fixed-fee (CPFF) structure allows the contractor to recover allowable costs plus a predetermined fixed fee representing profit. When combined with a sole-source award, this structure inherently reduces the government's leverage to control costs, as there's no competitive pressure to minimize expenses. The fixed fee provides the contractor with a guaranteed profit margin regardless of cost efficiencies, potentially leading to higher overall expenditures compared to a competitively bid contract.

What are the potential long-term implications for the Department of the Navy regarding technological advancement and vendor lock-in due to this non-competed award?

A sole-source award can lead to vendor lock-in, where the government becomes dependent on a single supplier for critical equipment. This can stifle innovation, as the incumbent contractor may have less incentive to develop cutting-edge solutions. Furthermore, it limits the Navy's ability to explore alternative technologies or benefit from competitive advancements in the market, potentially resulting in outdated systems or higher future procurement costs.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003914R0021

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc.

Address: 640 N 2200 W, SALT LAKE CITY, UT, 84116

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: $32,481,389

Exercised Options: $32,481,389

Current Obligation: $30,822,204

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $1,400,175

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0003915D0008

IDV Type: IDC

Timeline