DoD's $457.7M SINCGARS radio acquisition by L3Harris Technologies shows fair value despite limited competition

Contract Overview

Contract Amount: $457,749,757 ($457.7M)

Contractor: L3harris Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-06-04

End Date: 2015-01-31

Contract Duration: 2,067 days

Daily Burn Rate: $221.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AQUISITION FOR SINCGARS BASELINE RADIO, VAA/INC AND RFPA

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46818

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $457.7 million to L3HARRIS TECHNOLOGIES, INC. for work described as: AQUISITION FOR SINCGARS BASELINE RADIO, VAA/INC AND RFPA Key points: 1. The contract's firm-fixed-price structure provides cost certainty for the government. 2. While L3Harris was the sole awardee, the contract was competed on a full-and-open basis. 3. The duration of the contract (2009-2015) suggests a long-term need for these communication systems. 4. The acquisition falls within the broader defense communications equipment manufacturing sector. 5. Performance was managed by the Defense Contract Management Agency, indicating standard oversight. 6. The absence of small business set-asides means direct impact on this sector is minimal.

Value Assessment

Rating: good

The total value of $457.7 million over approximately 6.5 years suggests a significant investment in critical communication hardware. Benchmarking this against similar large-scale defense radio procurements is challenging without more granular data on unit quantities and specific technical configurations. However, the firm-fixed-price nature of the contract generally indicates that the contractor assumed the risk for cost overruns, which can be favorable for the government if managed effectively. The contract's value appears substantial but within the expected range for major defense system acquisitions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit offers. Despite this broad initial competition, only one offer was received and accepted. This outcome, while technically meeting the 'full and open' criteria, raises questions about the actual level of competition achieved for this specific requirement. It could indicate that only one company possessed the necessary capabilities or that market conditions limited the number of interested bidders.

Taxpayer Impact: A single offer, even from a full and open competition, may limit the government's ability to secure the most competitive pricing. Taxpayers may not benefit from the full price discovery that multiple competing bids typically provide.

Public Impact

The primary beneficiaries are U.S. Army and Marine Corps personnel requiring reliable battlefield communication. The contract delivered SINCGARS (Single Channel Ground and Airborne Radio System) baseline radios, a critical component for tactical operations. The geographic impact is national, supporting deployed forces globally, with specific contract administration in Indiana. The acquisition supports jobs within L3Harris Technologies and its supply chain, primarily in manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition despite full and open solicitation could lead to suboptimal pricing.
Long contract duration might not keep pace with rapidly evolving communication technology.
Reliance on a single supplier for a critical system poses a potential supply chain risk.

Positive Signals

Firm-fixed-price contract provides cost certainty and shifts risk to the contractor.
Award to an established defense contractor suggests a high likelihood of meeting technical requirements.
Standard contract management by DCMA implies adherence to established oversight processes.

Sector Analysis

This contract falls within the broader defense electronics and communications equipment manufacturing sector. This sector is characterized by high R&D investment, stringent performance requirements, and long product lifecycles. The SINCGARS system is a mature technology, but its continued importance in military operations necessitates ongoing procurement and sustainment. Comparable spending benchmarks would involve other large-scale radio system procurements for military branches, which often run into hundreds of millions of dollars.

Small Business Impact

The contract details indicate that this was not a small business set-aside, and the prime contractor, L3Harris Technologies, is a large business. There is no explicit information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem for this specific award appears to be minimal, unless L3Harris actively engaged small businesses in its supply chain.

Oversight & Accountability

The contract was administered by the Defense Contract Management Agency (DCMA), which provides contract administration services for the Department of Defense. This typically involves oversight of contractor performance, quality assurance, and compliance with contract terms. The firm-fixed-price nature of the contract implies that financial oversight would focus on ensuring delivery according to specifications rather than managing cost variances. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance metrics are not publicly detailed here.

Related Government Programs

Tactical Radio Systems
Military Communications Equipment
Defense Procurement
Command and Control Systems

Risk Flags

Single Offer Received
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $457.7 million to L3HARRIS TECHNOLOGIES, INC.. AQUISITION FOR SINCGARS BASELINE RADIO, VAA/INC AND RFPA

Who is the contractor on this award?

The obligated recipient is L3HARRIS 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 $457.7 million.

What is the period of performance?

Start: 2009-06-04. End: 2015-01-31.

What is the historical spending trend for SINCGARS radios by the Department of Defense?

Historical spending on SINCGARS radios by the DoD is substantial, reflecting the system's long service life and critical role in tactical communications. While this specific contract accounts for over $457 million between 2009 and 2015, it represents only a portion of the overall investment. The DoD has procured SINCGARS systems for decades, with numerous contracts awarded for initial fielding, upgrades, sustainment, and spare parts. Analyzing total historical spending requires aggregating data across multiple contract vehicles, agencies, and fiscal years. Trends would likely show initial large-scale procurements during system fielding, followed by sustained spending on sustainment, modernization efforts, and replacements as systems age or new requirements emerge. The total lifecycle cost of SINCGARS, including this contract, likely runs into billions of dollars over its operational history.

How does the unit cost of these SINCGARS radios compare to similar systems or previous procurements?

Determining the precise unit cost for the SINCGARS radios procured under this contract is difficult without knowing the exact quantity of radios delivered. The total contract value is $457.7 million. If we assume, for illustrative purposes, that 100,000 radios were procured, the average unit cost would be approximately $4,577. This figure needs to be compared against the original procurement costs when SINCGARS was first introduced, as well as against costs for newer generation tactical radios. Inflation, technological advancements, and different contract terms (e.g., firm-fixed-price vs. cost-plus) make direct comparisons complex. However, for a mature, widely fielded military radio system, a unit cost in the thousands of dollars is generally expected, especially when considering associated logistics, testing, and support.

What are the key performance metrics and success criteria for this SINCGARS radio contract?

Key performance metrics for a SINCGARS radio contract typically revolve around reliability, availability, maintainability, and performance in challenging electromagnetic environments. Specific criteria would likely include meeting or exceeding Mean Time Between Failures (MTBF) rates, ensuring a high percentage of operational availability, and successful integration with other battlefield systems. The contract's firm-fixed-price nature suggests that the primary success criterion for the government is receiving the specified quantity of radios that meet all technical performance specifications by the contracted delivery dates. The Defense Contract Management Agency (DCMA) would likely monitor adherence to technical specifications, quality control processes, and delivery schedules as indicators of successful performance.

What is L3Harris Technologies' track record with SINCGARS or similar communication systems?

L3Harris Technologies, and its predecessor companies, have a significant and long-standing track record in providing communication systems, including SINCGARS, to the U.S. military and allied nations. L3Harris is a major defense contractor known for its expertise in various areas of electronic warfare, communications, and avionics. They have been involved in the production, sustainment, and modernization of SINCGARS radios for many years. Their extensive experience suggests a deep understanding of the system's requirements, manufacturing processes, and operational context. This established presence and history with the SINCGARS platform likely contributed to their ability to win and execute this substantial contract.

Were there any significant risks identified or mitigation strategies employed during the contract performance period?

While the specific risks identified and mitigation strategies for this contract are not detailed in the provided summary, common risks in large defense procurements include technical performance issues, schedule delays, cost overruns (though mitigated by FFP), supply chain disruptions, and obsolescence. Given the firm-fixed-price structure, the primary risk for the government is non-performance or substandard performance by the contractor. L3Harris, as the contractor, would bear the financial risk of cost overruns. Mitigation strategies likely involved robust government oversight by DCMA, clear technical specifications, defined delivery schedules, and potentially performance bonds. The fact that the contract was completed (based on the end date) suggests that major unmitigated risks did not derail the program.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: W15P7T08RJ010

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 7310 INNOVATION BLVD, FORT WAYNE, IN, 46818

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: $458,686,988

Exercised Options: $457,749,757

Current Obligation: $457,749,757

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline