DoD awards $86M for M734A1/M783 fuzes to L3Harris, amid concerns over limited competition
Contract Overview
Contract Amount: $86,004,288 ($86.0M)
Contractor: L3harris Fuzing and Ordnance Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-06-09
End Date: 2026-04-30
Contract Duration: 1,056 days
Daily Burn Rate: $81.4K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THE PURPOSE OF DELIVERY ORDER W15QKN23F0396 IS FOR THE PURCHASE OF M734A1 AND M783 FUZES.
Place of Performance
Location: CINCINNATI, CLERMONT County, OHIO, 45245
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $86.0 million to L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC. for work described as: THE PURPOSE OF DELIVERY ORDER W15QKN23F0396 IS FOR THE PURCHASE OF M734A1 AND M783 FUZES. Key points: 1. Contract awarded to L3Harris for critical ammunition fuzes. 2. Limited competition raises questions about price discovery and value. 3. Potential risk associated with reliance on a single supplier for essential components. 4. Spending falls within the Ammunition Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $86M for fuzes appears high given the limited competition. Benchmarking against similar contracts for ammunition components is difficult without more data on unit costs and specific product features.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competitive field. This method may restrict price discovery and potentially lead to higher costs for taxpayers.
Taxpayer Impact: The limited competition raises concerns about whether the government secured the best possible price for these essential fuzes, potentially impacting taxpayer value.
Public Impact
Ensures supply of critical components for military operations. Potential for increased costs due to restricted competition. Highlights the importance of robust market research for defense procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Potential for price inflation
- Sole-source-like award
Positive Signals
- Secures essential munitions components
- Awarded to established defense contractor
Sector Analysis
This contract falls under the Ammunition (except Small Arms) Manufacturing sector. Spending benchmarks for this specific type of fuze are not readily available, but the defense industry often sees significant investment in munitions.
Small Business Impact
The contract was not awarded to a small business. There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The 'exclusion of sources' clause warrants further scrutiny to ensure the justification for limiting competition was sound and that adequate oversight was in place to protect taxpayer interests.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition
- Potential for price overruns
- Lack of transparency in source exclusion
- Supply chain vulnerability
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, oh, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $86.0 million to L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC.. THE PURPOSE OF DELIVERY ORDER W15QKN23F0396 IS FOR THE PURCHASE OF M734A1 AND M783 FUZES.
Who is the contractor on this award?
The obligated recipient is L3HARRIS FUZING AND ORDNANCE SYSTEMS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $86.0 million.
What is the period of performance?
Start: 2023-06-09. End: 2026-04-30.
What was the specific justification for excluding other potential sources in this procurement, and how was the pricing determined to be fair and reasonable?
The justification for excluding other sources is critical. Typically, such exclusions are based on factors like proprietary technology, existing infrastructure, or urgent, unavoidable needs. Without this specific justification, it's difficult to assess the fairness of the pricing. A thorough review would involve comparing the proposed price against historical data, independent cost estimates, and market research to ensure it aligns with industry standards and represents good value.
What are the long-term risks associated with awarding a significant contract for essential fuzes under limited competition?
The primary long-term risk is the potential for sustained higher costs due to a lack of competitive pressure. This can also lead to a reduced incentive for the awarded contractor to innovate or improve efficiency. Furthermore, over-reliance on a single supplier can create vulnerabilities in the supply chain, especially during geopolitical instability or unexpected demand surges, potentially impacting national security readiness.
How does this contract contribute to the overall readiness and effectiveness of the Department of Defense's ammunition capabilities?
This contract directly contributes to readiness by ensuring the supply of critical fuzes for specific munitions. The M734A1 and M783 fuzes are essential components, and their availability is vital for maintaining the operational capacity of the armed forces. However, the method of procurement, particularly the limited competition, raises questions about the cost-effectiveness and long-term sustainability of this contribution.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3975 MC MANN RD, CINCINNATI, OH, 45245
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $86,004,288
Exercised Options: $86,004,288
Current Obligation: $86,004,288
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15QKN23D0019
IDV Type: IDC
Timeline
Start Date: 2023-06-09
Current End Date: 2026-04-30
Potential End Date: 2026-04-30 12:04:00
Last Modified: 2025-08-27
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