DoD's $724M contract for air transportation support awarded to L-3 Communications Integrated Systems L.P

Contract Overview

Contract Amount: $723,969,572 ($724.0M)

Contractor: L-3 Communications Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2003-04-28

End Date: 2008-01-25

Contract Duration: 1,733 days

Daily Burn Rate: $417.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $724.0 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P. for work described as: Key points: 1. Contract value exceeds $723 million over its duration. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Contract type is Cost Plus Award Fee, which incentivizes performance but can lead to higher costs. 4. Duration of 1733 days indicates a long-term service requirement. 5. The contract is for 'Other Support Activities for Air Transportation', a critical but broad category. 6. Geographic location of performance is Kentucky.

Value Assessment

Rating: fair

The contract's total value of over $723 million for nearly five years of support is substantial. Without specific performance metrics or comparable contracts for similar specialized air transportation support, a precise value-for-money assessment is challenging. The Cost Plus Award Fee structure allows for contractor incentives but also carries the risk of cost overruns if not managed tightly. Benchmarking this against other DoD support contracts would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition', indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding environment, which typically leads to better price discovery and potentially more favorable terms for the government. The number of bidders is not specified, but the open competition is a positive sign for market responsiveness.

Taxpayer Impact: A competitive award process generally benefits taxpayers by driving down prices and encouraging efficiency from the winning contractor.

Public Impact

This contract directly supports U.S. Special Operations Command (SOCOM) aviation readiness and operational capabilities. It ensures the availability of critical air transportation support services, likely for specialized missions. The primary beneficiaries are SOCOM personnel and the successful execution of their diverse operational requirements. Work is performed in Kentucky, potentially creating or sustaining jobs in the region. The services provided are essential for maintaining the operational effectiveness of specialized air assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to higher final costs compared to fixed-price contracts if performance targets are consistently met or exceeded.
The broad nature of 'Other Support Activities' could lead to scope creep if not precisely defined and managed.
Long contract durations can sometimes reduce flexibility to adopt newer technologies or approaches if the market evolves rapidly.

Positive Signals

Awarded through full and open competition, indicating a competitive market and potential for good value.
The Cost Plus Award Fee structure incentivizes contractor performance, aiming for high-quality service delivery.
The contract supports a critical national security mission for U.S. Special Operations Command.

Sector Analysis

This contract falls within the broader aerospace and defense services sector, specifically focusing on support activities for air transportation. This sector is characterized by high technological requirements, stringent regulatory oversight, and significant government spending. The market includes a range of large defense contractors and specialized service providers. Spending in this area is often driven by operational tempo and the need to maintain complex aviation fleets and infrastructure.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While the prime contractor is L-3 Communications Integrated Systems L.P., a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the specific requirements outlined in the contract and the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Special Operations Command (SOCOM) contracting and program management offices. As a Cost Plus Award Fee contract, performance monitoring and evaluation are crucial to ensure the government receives the intended value and that award fees are justified. Transparency would be facilitated through contract reporting mechanisms, and potential issues could be addressed by SOCOM's Inspector General.

Related Government Programs

Special Operations Forces Support Contracts
Air Mobility Command Services
Department of Defense Aviation Maintenance Contracts
Logistics and Support Services for Military Operations

Risk Flags

Cost Plus Award Fee contract type requires careful monitoring to manage costs.
Long contract duration may present risks of technological obsolescence or changing requirements.
Specialized nature of support could limit competition or create contractor dependency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $724.0 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $724.0 million.

What is the period of performance?

Start: 2003-04-28. End: 2008-01-25.

What specific types of 'Other Support Activities for Air Transportation' are covered under this contract?

The contract details for 'Other Support Activities for Air Transportation' (NAICS code 488190) are broad and can encompass a wide range of services. These typically include maintenance, repair, overhaul (MRO) of aircraft and related equipment, ground support services, air traffic control support, aerial port operations, logistics management, and potentially specialized training related to air transportation. Given the award to U.S. Special Operations Command, these services likely pertain to unique or specialized aviation assets and operational requirements critical for special operations missions, potentially including modifications, specialized equipment integration, or support for unconventional aviation platforms.

How does the Cost Plus Award Fee (CPAF) structure compare to other contract types for similar services?

Cost Plus Award Fee (CPAF) contracts are used when the government requires a high level of performance and flexibility, but the exact costs are difficult to predict upfront. Unlike fixed-price contracts, CPAF reimburses the contractor for allowable costs and includes a base fee plus an award fee based on performance against defined criteria. This structure incentivizes the contractor to exceed minimum performance standards. However, it can be more expensive than fixed-price contracts if performance targets are consistently met or exceeded, and it requires robust government oversight to manage costs and ensure fair award fee determinations. For routine, well-defined services, fixed-price contracts might offer better cost certainty for the government.

What is the typical performance history of L-3 Communications Integrated Systems L.P. with the Department of Defense?

L-3 Communications Integrated Systems L.P. (now part of L3Harris Technologies) has a long history of contracting with the Department of Defense across various service and product lines. Historically, the company has been a significant provider of aerospace systems, communications, and electronic solutions. Performance reviews and past performance data are critical components of the source selection process for new contracts. While specific details of past performance on individual contracts are often proprietary or found in government source selection documents, L3Harris Technologies generally holds a substantial portfolio of DoD contracts, indicating a capacity to meet complex requirements. Any concerns or exceptional performance would typically be documented in past performance evaluations used during bidding.

What are the potential risks associated with a contract of this duration and value for specialized air support?

Contracts with a duration of nearly five years and a value exceeding $723 million carry inherent risks. For specialized air support, these include the potential for technological obsolescence if the supported platforms or systems evolve rapidly. Cost overruns are a risk, particularly with CPAF contracts, if performance incentives drive costs higher than anticipated or if unforeseen operational demands arise. Contractor performance degradation over time, personnel turnover, and shifts in government requirements or priorities also pose risks. Furthermore, the specialized nature of the support might limit the pool of alternative providers, potentially increasing reliance on the incumbent contractor and reducing flexibility.

How does spending on 'Other Support Activities for Air Transportation' compare across different DoD agencies or branches?

Spending on 'Other Support Activities for Air Transportation' can vary significantly across Department of Defense agencies and branches based on their specific missions and aviation assets. For instance, the Air Force, with its large transport and combat air fleets, likely represents a substantial portion of this spending. Naval aviation commands and Army aviation units also require extensive support services. U.S. Special Operations Command (SOCOM), as the recipient of this particular contract, would have unique and often highly specialized requirements for its diverse range of aircraft, potentially involving different types of support compared to conventional forces. Benchmarking SOCOM's spending in this category against broader DoD trends would require detailed analysis of agency-specific budgets and contract awards.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

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

Address: 5749 BRIAR HILL RD, LEXINGTON, KY, 06

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline