L3Harris awarded $211M for navigation systems, raising questions about competition and value

Contract Overview

Contract Amount: $211,011,350 ($211.0M)

Contractor: L3harris Nexgen Communications LLC

Awarding Agency: Department of Defense

Start Date: 2003-12-18

End Date: 2007-02-28

Contract Duration: 1,168 days

Daily Burn Rate: $180.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: NASHUA, HILLSBOROUGH County, NEW HAMPSHIRE, 03063

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $211.0 million to L3HARRIS NEXGEN COMMUNICATIONS LLC for work described as: Key points: 1. Contract awarded through a sole-source justification, limiting competitive pressure. 2. Significant contract value suggests a critical need for these navigation systems. 3. Long contract duration (1168 days) may indicate complex integration or long-term support. 4. Fixed-price contract type aims to control costs, but sole-source nature warrants scrutiny. 5. Lack of small business participation noted, with no set-aside or subcontracting reported. 6. Performance context is limited without specific details on system functionality or deployment.

Value Assessment

Rating: fair

The contract's value of over $211 million is substantial for navigation systems. However, without comparable sole-source contracts or detailed performance metrics, a precise value-for-money assessment is challenging. The firm fixed-price structure is a positive indicator for cost control, but the absence of competition means potential savings from a competitive bidding process were likely forgone. Benchmarking against similar sole-source procurements for specialized navigation equipment would be necessary for a more robust evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor, L3Harris, was solicited. This approach is typically used when a unique capability is required or when only one source can meet the government's needs. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from multiple bidders vying for a contract. This can lead to higher prices than might be achieved in a competitive environment.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government missed opportunities to leverage market forces for better pricing and potentially more innovative solutions.

Public Impact

The primary beneficiaries are likely military units requiring advanced navigation and guidance systems. Services delivered include the manufacturing and potential support of critical navigation hardware. Geographic impact is likely global, supporting deployed military operations. Workforce implications may include specialized engineering and manufacturing roles at L3Harris.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Lack of transparency in the sole-source justification requires careful review.
No indication of small business subcontracting could limit broader economic impact.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
L3Harris is a known entity in defense contracting, suggesting some level of established capability.
The contract addresses a specific need for navigation systems, indicating essential functionality.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. This is a specialized area within the broader aerospace and defense industry, characterized by high technological barriers to entry and significant R&D investment. Market size for such specialized navigation systems is driven by defense spending and technological advancements. Comparable spending benchmarks would likely be found within other sole-source procurements for advanced military hardware where unique capabilities are paramount.

Small Business Impact

This contract does not appear to have a small business set-aside, nor is there any explicit mention of subcontracting goals for small businesses. The sole-source nature of the award inherently limits opportunities for small businesses to participate directly or indirectly. This could mean a missed opportunity to foster innovation and economic growth within the small business defense industrial base.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to manage costs. Transparency is limited by the sole-source award; however, contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Navigation Systems
Aerospace and Defense Manufacturing
Guidance, Navigation, and Control Systems
Defense Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $211.0 million to L3HARRIS NEXGEN COMMUNICATIONS LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is L3HARRIS NEXGEN COMMUNICATIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $211.0 million.

What is the period of performance?

Start: 2003-12-18. End: 2007-02-28.

What specific navigation systems are being procured under this contract, and what is their intended military application?

The data provided indicates the contract is for 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' (NAICS 334511). While the specific system details are not available in the provided data, this classification suggests the procurement relates to advanced hardware and instruments crucial for military operations. These could include components for aircraft, ships, or ground vehicles, enabling precise positioning, course plotting, and situational awareness in complex environments. The 'Search, Detection' aspect might also imply integration with sensor or targeting systems. The exact application would depend on the specific system's capabilities and the platforms it's intended for, likely supporting critical mission functions for the Department of Defense.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. Common reasons include unique capabilities, proprietary technology, urgent and compelling needs where competition is impractical, or when a specific contractor has demonstrated exceptional performance on prior related efforts. For this L3Harris contract, the justification likely stems from a specialized technological requirement or a need for specific, proprietary components that only L3Harris can provide. Without access to the specific sole-source justification document, the precise rationale remains undisclosed, but it implies a perceived lack of viable alternatives in the market for the government's specific requirements at the time of award.

How does the $211 million contract value compare to historical spending on similar navigation systems by the Department of Defense?

The provided data does not include historical spending figures for comparable navigation systems, making a direct comparison difficult. However, $211 million is a significant sum, suggesting a substantial procurement of advanced or large-quantity navigation equipment. To benchmark this value, one would need to analyze past contracts for similar systems, considering factors like quantity, technological sophistication, and contract type. The duration of the contract (1168 days) also indicates a long-term acquisition or support effort. Without further data on specific system types and quantities procured historically, it's challenging to definitively state if this represents an increase or decrease in spending trends for such capabilities.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

A sole-source contract of this magnitude ($211 million) and duration (1168 days) carries several potential risks. Firstly, the lack of competition can lead to inflated prices, as the contractor faces no market pressure to offer the best possible value. Secondly, there's a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, making future transitions difficult and potentially costly. Thirdly, without competitive oversight, there's a heightened need for robust government project management and oversight to ensure the contractor meets all requirements and delivers quality products. Finally, the long duration might mean the technology could become outdated before the contract concludes, or that the government misses out on more innovative solutions that emerge during the contract period.

What is L3Harris's track record with the Department of Defense, particularly concerning navigation systems?

L3Harris Technologies is a major defense contractor with a significant history of providing a wide range of products and services to the Department of Defense, including advanced communication, navigation, and sensor systems. While the provided data doesn't detail L3Harris's specific performance on this particular contract (as it's a past contract), their status as a large, established defense prime contractor suggests they possess the technical capabilities and infrastructure to fulfill such requirements. A deeper dive into L3Harris's contract history with the DoD, focusing on similar navigation or guidance system contracts, would reveal their performance metrics, past issues, and overall reliability in delivering complex defense technologies.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 44965 AVIATION DR STE 400, DULLES, VA, 20166

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline