DoD awards $126.8M for electronics and communication equipment, with L3 Technologies as prime contractor

Contract Overview

Contract Amount: $126,785,688 ($126.8M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 1997-10-01

End Date: 2009-06-01

Contract Duration: 4,261 days

Daily Burn Rate: $29.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199812!1700!1001!D0231!SPACE AND NAVAL WARFARE SYSTEMS !N0003998C3007 !A!*!* !19971001!19990130!008898884!008898884!008898843!N!06401!L-3 COMMUNICATIONS CORPORATION!600 3RD AVE FL 35 !NEW YORK !NY!10016!67000!035!49!SALT LAKE CITY !SALT LAKE !UTAH !0001!+000000800000!N!N!000000000000!AC64!RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !3669!3!C!S!*!B!A!*!A !N!J!2!001!B!* !Z!Y!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84116

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $126.8 million to L3 TECHNOLOGIES, INC. for work described as: 199812!1700!1001!D0231!SPACE AND NAVAL WARFARE SYSTEMS !N0003998C3007 !A!*!* !19971001!19990130!008898884!008898884!008898843!N!06401!L-3 COMMUNICATIONS CORPORATION!600 3RD AVE FL 35 !NEW YORK !NY!10016!67000!035!49!SALT LAKE CITY !SALT L… Key points: 1. Contract value of $126.8M represents a significant investment in advanced electronics and communication systems. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (over 11 years) indicates a long-term need for these specialized systems. 4. The primary focus on RDTE/Electronics & Communication Equipment points to research and development in a critical defense sector. 5. The award to L3 Technologies, a major defense contractor, highlights the concentration of specialized capabilities within large firms. 6. The contract's scope includes search, detection, navigation, guidance, and related instrument manufacturing.

Value Assessment

Rating: good

The total contract value of $126.8 million over its extended period suggests a substantial investment. Benchmarking this against similar contracts for advanced electronics and communication systems would be necessary for a precise value-for-money assessment. However, the firm fixed-price nature of the contract provides cost certainty for the government, which is a positive indicator. The long duration implies a sustained need and potentially a well-defined scope that allowed for predictable pricing.

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 data does not specify the number of bidders, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The government's decision to use full and open competition suggests confidence in the market's ability to provide the required specialized systems.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it is expected to drive down costs through market forces and encourage a wider range of potential suppliers to offer their best pricing.

Public Impact

The primary beneficiaries are the Department of Defense, which receives advanced electronics and communication equipment essential for its operations. The contract supports the development and delivery of systems for search, detection, navigation, and guidance. The geographic impact is primarily within the United States, with potential implications for defense readiness and national security. The contract supports a highly specialized segment of the defense industrial base, potentially impacting a skilled workforce in electronics engineering and manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extended contract duration of over 11 years could introduce risks related to technological obsolescence or changing requirements.
Reliance on a single large contractor, L3 Technologies, may limit future competition or flexibility if not managed carefully.
The specific nature of RDTE/Electronics & Communication Equipment can involve inherent risks in research and development outcomes.

Positive Signals

The use of full and open competition suggests a robust market engagement and potential for competitive pricing.
The firm fixed-price contract type provides cost predictability for the government.
The award to a known entity like L3 Technologies indicates a contractor with established capabilities in this specialized field.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on the manufacturing and research & development of advanced electronics and communication equipment. The market for such specialized defense systems is characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this area is critical for maintaining military technological superiority. Comparable spending benchmarks would typically involve other large-scale R&D and production contracts for similar defense systems awarded by various military branches.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss=false, sb=false). As a large-value contract awarded to a major defense contractor, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specifically mandated or pursued by the prime contractor. The focus on specialized R&D and electronics manufacturing may also limit the types of small businesses that could participate.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense, likely through the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures are inherent in the firm fixed-price contract type, which places the cost risk on the contractor. Transparency is generally maintained through contract award databases, though specific project details might be sensitive. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Electronics
Communication Systems
Research and Development Contracts
Naval Warfare Systems
Advanced Technology Manufacturing

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for scope creep over the extended performance period.
Reliance on a single large contractor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $126.8 million to L3 TECHNOLOGIES, INC.. 199812!1700!1001!D0231!SPACE AND NAVAL WARFARE SYSTEMS !N0003998C3007 !A!*!* !19971001!19990130!008898884!008898884!008898843!N!06401!L-3 COMMUNICATIONS CORPORATION!600 3RD AVE FL 35 !NEW YORK !NY!10016!67000!035!49!SALT LAKE CITY !SALT LAKE !UTAH !0001!+000000800000!N!N!000000000000!AC64!RDTE/ELECTRONICS & COMMUNICATION EQ-DEMO/VALID !A7 !ELECTRONICS AND COMMUNICATION !2000!NOT DISCERNABLE OR CLASSIFIED !3669!3!C!S!*!B!A!*!A !N!J!2!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 $126.8 million.

What is the period of performance?

Start: 1997-10-01. End: 2009-06-01.

What is the historical spending trend for similar electronics and communication equipment contracts within the Department of Defense?

Analyzing historical spending trends for similar electronics and communication equipment contracts within the Department of Defense requires access to comprehensive contract databases. Generally, spending in this area fluctuates based on technological advancements, geopolitical conditions, and specific military modernization programs. Contracts for advanced systems often span multiple years and can involve significant R&D components, leading to substantial annual outlays. For instance, major upgrades to radar systems, secure communication networks, or navigation equipment can represent billions of dollars in cumulative spending over a decade. The trend is often towards more sophisticated, integrated, and software-defined systems, reflecting a shift from hardware-centric to capability-driven procurement. Specific trends would need to be identified by querying databases for relevant Product Service Codes (PSCs) and contract types over time.

How does the per-unit cost of the systems procured under this contract compare to industry benchmarks?

Determining the per-unit cost comparison for this contract is challenging without specific details on the units being procured. The contract value of $126.8 million is for a broad scope encompassing R&D and manufacturing of electronics and communication equipment, likely involving complex systems rather than simple, mass-produced items. Per-unit costs for advanced defense systems, especially those involving research and development, are highly variable and depend on factors like customization, technological sophistication, quantity, and lifecycle support. Industry benchmarks for such specialized equipment are often proprietary or difficult to ascertain due to the unique nature of defense contracts. A meaningful comparison would require identifying specific comparable systems, their quantities, and their pricing from other government contracts or commercial equivalents, which is not directly available from the provided data.

What is L3 Technologies' track record with similar Department of Defense contracts?

L3 Technologies (now part of L3Harris Technologies) has a substantial track record with the Department of Defense, having secured numerous contracts across various defense domains. Their expertise typically lies in areas such as electronic systems, communications, sensors, and intelligence, surveillance, and reconnaissance (ISR) platforms. Historical data indicates L3 has been a significant supplier of advanced technologies and integrated systems to the DoD. Performance on past contracts would vary, as is common with large contractors; reviews of specific contract performance metrics, past performance evaluations, and any significant disputes or awards would provide a more detailed picture. However, their continued success in winning large-value contracts suggests a generally positive standing and capability in meeting DoD requirements.

What are the potential risks associated with the long duration (over 11 years) of this contract?

The extended duration of this contract, spanning from 1997 to 2009 (over 11 years), presents several potential risks. Firstly, technological obsolescence is a significant concern; the pace of innovation in electronics and communication systems is rapid, and systems developed or procured early in the contract period may become outdated before its conclusion. Secondly, requirements may evolve over such a long timeframe due to changes in military strategy, threat assessments, or operational needs, potentially rendering the original scope of work less relevant or requiring costly modifications. Thirdly, managing a contract over such an extended period can lead to 'contract creep,' where scope changes or additions are made without adequate adjustments to cost or schedule, impacting overall value. Finally, long-term contracts can sometimes reduce flexibility for the government to adopt newer, potentially more cost-effective technologies that emerge during the contract's life.

How does the firm fixed-price (FFP) contract type influence the government's risk exposure?

The firm fixed-price (FFP) contract type significantly shifts the cost risk from the government to the contractor, L3 Technologies, in this case. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This provides the government with maximum cost certainty and predictability, making budgeting more straightforward. If the contractor's costs exceed the agreed-upon price, they absorb the loss. Conversely, if their costs are lower, they retain the profit. This structure incentivizes the contractor to manage their costs efficiently and perform the work effectively to maximize their profit margin. The primary risk for the government with FFP contracts lies in ensuring the initial price is fair and reasonable, and that the contract adequately defines the scope to prevent disputes or the need for costly change orders.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)

Address: 600 3RD AVE, NEW YORK, NY, 10016

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline