DoD's $570M Contract for Air Transportation Support Awarded to L-3 Communications in 1999
Contract Overview
Contract Amount: $570,277,097 ($570.3M)
Contractor: L-3 Communications Integrated Systems L.P.
Awarding Agency: Department of Defense
Start Date: 1999-10-25
End Date: 2007-06-29
Contract Duration: 2,804 days
Daily Burn Rate: $203.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Place of Performance
Location: LEXINGTON, FAYETTE County, KENTUCKY, 40516
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $570.3 million to L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P. for work described as: Key points: 1. Contract value of $570.3M over its lifetime. 2. Awarded via full and open competition, suggesting market availability. 3. Contract type is Cost Plus Award Fee (CPAF), which can incentivize performance but also lead to cost overruns. 4. No small business participation noted.
Value Assessment
Rating: fair
The contract's Cost Plus Award Fee structure allows for costs plus an incentive fee, which can be effective but requires careful oversight to manage costs. The award fee component aims to incentivize contractor performance, but the final cost is dependent on achieved metrics.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors were likely considered. This method generally promotes competitive pricing and allows the government to select the best value offering.
Taxpayer Impact: The use of full and open competition is generally favorable for taxpayers as it aims to secure competitive pricing. However, the CPAF structure requires diligent oversight to ensure costs remain reasonable.
Public Impact
Significant taxpayer investment of over $570 million for specialized air transportation support. Potential for performance incentives to drive efficiency in critical support activities. Lack of small business involvement may limit broader economic impact and competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- CPAF contract type can lead to higher costs if not managed effectively.
- No small business participation.
Positive Signals
- Awarded through full and open competition.
- Incentive fee structure may drive performance.
Sector Analysis
This contract falls under 'Other Support Activities for Air Transportation,' a niche within the broader aerospace and defense sector. Spending in this area is critical for maintaining operational readiness and logistical capabilities for military forces.
Small Business Impact
The contract data indicates that small businesses were not involved in this award. This suggests that the scope or nature of the services required may have favored larger, specialized contractors, potentially missing opportunities for small business engagement.
Oversight & Accountability
The Cost Plus Award Fee structure necessitates robust government oversight to ensure contractor performance aligns with award criteria and to control costs. Regular reviews and audits would be crucial for accountability.
Related Government Programs
- Other Support Activities for Air Transportation
- Department of Defense Contracting
- U.S. Special Operations Command Programs
Risk Flags
- Potential for cost overruns due to CPAF structure.
- Lack of small business participation.
- Long contract duration (1999-2007) may indicate evolving needs not fully captured initially.
- Specific performance metrics for award fee are not detailed.
Tags
other-support-activities-for-air-transpo, department-of-defense, ky, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $570.3 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 $570.3 million.
What is the period of performance?
Start: 1999-10-25. End: 2007-06-29.
How effectively did the award fee structure incentivize performance and control costs over the contract's duration?
The effectiveness of the award fee structure is contingent on the clarity and measurability of the performance metrics defined in the contract. Without detailed insight into these metrics and the contractor's actual performance against them, it's difficult to definitively assess cost control. However, CPAF contracts generally aim to balance cost reimbursement with performance incentives, requiring active government management to realize intended benefits.
What were the primary risks associated with the Cost Plus Award Fee structure for this specific air transportation support contract?
The primary risks with a CPAF contract include potential for cost escalation if performance targets are easily met or if the government's oversight is insufficient to challenge incurred costs. There's also a risk that the award fee criteria might not perfectly align with the most critical operational needs, leading to contractor focus on incentivized areas rather than overall mission success.
How did the 'full and open competition' process ensure the best value was achieved for this significant expenditure?
Full and open competition theoretically ensures best value by allowing all qualified sources to bid, fostering a competitive environment that drives down prices and encourages innovation. The government's evaluation process, based on defined criteria (technical, cost, past performance), then selects the offer that provides the optimal balance. The success in achieving best value depends heavily on the thoroughness of the solicitation and the rigor of the evaluation.
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
Offers Received: 5
Pricing Type: COST PLUS AWARD FEE (R)
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
Contract Characteristics
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 1999-10-25
Current End Date: 2007-06-29
Potential End Date: 2007-06-29 00:00:00
Last Modified: 2008-05-23
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