DoD's $93.6M R&D contract for surveillance sensors awarded to L3 Technologies shows fair value with 6 bidders

Contract Overview

Contract Amount: $93,590,346 ($93.6M)

Contractor: L3 Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-06-20

End Date: 2020-03-31

Contract Duration: 2,111 days

Daily Burn Rate: $44.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF WIDE AREA 6-DEGREE PAYLOAD (WASP) / FIELD OF VIEW BATTLESPACE INFRARED SURVIELLANCE SENSOR (FOV BIRSS) R&D - BAA AWARD

Place of Performance

Location: WILMINGTON, MIDDLESEX County, MASSACHUSETTS, 01887

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $93.6 million to L3 TECHNOLOGIES, INC. for work described as: IGF::OT::IGF WIDE AREA 6-DEGREE PAYLOAD (WASP) / FIELD OF VIEW BATTLESPACE INFRARED SURVIELLANCE SENSOR (FOV BIRSS) R&D - BAA AWARD Key points: 1. The contract's value appears reasonable given the R&D nature and the number of competing bids. 2. Full and open competition suggests a healthy market for this technology. 3. The definitive contract type with a Cost Plus Fixed Fee structure indicates potential for cost overruns, a common R&D risk. 4. This contract falls within the Research and Development sector, focusing on advanced surveillance capabilities. 5. The duration of the contract (2111 days) is substantial for an R&D project, suggesting a complex development cycle. 6. The award to L3 Technologies, a known defense contractor, aligns with industry norms for specialized R&D.

Value Assessment

Rating: good

The contract's total value of $93.6 million over approximately 5.8 years suggests a significant investment in advanced surveillance technology. Benchmarking R&D contracts is challenging due to unique specifications and development risks. However, the presence of six bidders indicates a competitive environment that likely helped to moderate pricing. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for R&D, carries inherent risks of cost growth, which warrants close monitoring. Compared to other large-scale defense R&D efforts, the per-year expenditure appears within a reasonable range for developing sophisticated sensor systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with six bids received. This level of competition is generally positive, suggesting that multiple capable vendors were interested and able to participate. A larger number of bidders typically leads to better price discovery and can drive innovation as companies vie for the award. The agency's decision to pursue full and open competition indicates confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely resulted in a more competitive price than a sole-source or limited competition award. It also signals that taxpayer funds are being used in a manner that encourages market efficiency.

Public Impact

The Department of Defense, specifically the Department of the Army, is the primary beneficiary, seeking to enhance battlefield surveillance capabilities. The contract will deliver advanced infrared surveillance sensors, improving situational awareness for military personnel. The geographic impact is primarily within the defense sector, potentially affecting operational readiness across various theaters. Workforce implications include specialized R&D roles for engineers and scientists at L3 Technologies and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can lead to cost overruns if not managed diligently.
The long contract duration (2111 days) increases the risk of technological obsolescence or shifting requirements.
Reliance on a single contractor for a critical technology development phase can create dependency.

Positive Signals

Full and open competition with six bidders suggests a competitive market and potentially fair pricing.
The award to a known defense contractor like L3 Technologies indicates a selection based on established capabilities.
The focus on R&D for advanced surveillance aligns with stated defense modernization priorities.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on advanced physical sciences and engineering for defense applications. The North American Industry Classification System (NAICS) code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' categorizes this work. The defense R&D market is characterized by significant government investment, long development cycles, and a need for highly specialized expertise. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of R&D, but the $93.6 million awarded reflects a substantial commitment to developing next-generation sensor technology.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. The award to L3 Technologies, a large defense contractor, suggests that the primary focus was on technical capability rather than small business participation. Further analysis would be needed to determine if L3 Technologies has a robust small business subcontracting plan in place.

Oversight & Accountability

Oversight for this definitive contract would typically be managed by the contracting officer and program management office within the Department of the Army. The Cost Plus Fixed Fee structure necessitates close financial oversight to monitor expenditures against the fixed fee and ensure compliance with contract terms. Transparency is generally maintained through contract reporting mechanisms, though specific details of R&D progress may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) Projects
Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Advanced Sensor Technology Development
Army Research Laboratory Contracts
Tactical Technology Development

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Long contract duration may lead to technological obsolescence or requirement changes.
Dependence on a single contractor for critical R&D.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $93.6 million to L3 TECHNOLOGIES, INC.. IGF::OT::IGF WIDE AREA 6-DEGREE PAYLOAD (WASP) / FIELD OF VIEW BATTLESPACE INFRARED SURVIELLANCE SENSOR (FOV BIRSS) R&D - BAA AWARD

Who is the contractor on this award?

The obligated recipient is L3 TECHNOLOGIES, 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 $93.6 million.

What is the period of performance?

Start: 2014-06-20. End: 2020-03-31.

What is the track record of L3 Technologies in delivering similar R&D projects for the Department of Defense?

L3 Technologies (now L3Harris Technologies after merging with Harris Corporation) has a significant track record in developing and producing advanced technologies for the Department of Defense, including sensor systems, electronic warfare capabilities, and communication systems. Their experience spans numerous complex R&D and production contracts. While specific performance metrics for past R&D projects are often proprietary or difficult to isolate, their continued success in winning competitive defense contracts suggests a generally positive performance history. The company's size and established presence in the defense industrial base indicate a capacity to handle large-scale, technologically challenging projects like the WASP/FOV BIRSS program. However, a detailed review of past performance on similar CPFF contracts would be necessary for a comprehensive assessment.

How does the total contract value of $93.6 million compare to other R&D contracts for advanced surveillance sensors?

The $93.6 million total contract value for the WASP/FOV BIRSS R&D project is substantial, reflecting the complexity and cutting-edge nature of developing advanced infrared surveillance sensors. Benchmarking R&D contracts is inherently difficult due to the unique specifications, technological risks, and development timelines involved. However, this figure appears to be within the expected range for major defense R&D initiatives focused on developing novel sensor platforms. For context, other significant defense R&D programs can range from tens of millions to billions of dollars, depending on the scope, duration, and technological maturity. The fact that this contract was competed among six bidders suggests that the perceived value and potential return on investment were attractive enough to draw significant industry interest, implying the pricing was likely competitive within this specialized market segment.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this R&D project?

The primary risk associated with the Cost Plus Fixed Fee (CPFF) contract type for this R&D project is the potential for cost growth. While the contractor is reimbursed for allowable costs, the fixed fee provides a ceiling on their profit. If the contractor incurs costs significantly higher than anticipated, they may absorb some of the overrun beyond the fixed fee, potentially impacting their motivation or leading to disputes. Conversely, if costs are well-managed, the contractor achieves their target profit. For the government, the risk lies in the potential for costs to escalate beyond initial projections, even with the fixed fee incentive. Effective oversight, detailed cost tracking, and clear definition of work are crucial to mitigate these risks and ensure the project stays within budget expectations.

What is the expected impact of this contract on the development of future battlefield surveillance technologies?

This contract is expected to have a significant impact on the development of future battlefield surveillance technologies by advancing the capabilities of infrared sensors. The WASP (Wide Area 6-Degree Payload) and FOV BIRSS (Field of View Battlespace Infrared Surveillance Sensor) project aims to enhance situational awareness through improved detection and tracking of targets in various conditions. Successful development could lead to more persistent surveillance, better target identification, and integration with other command and control systems. This could influence future military doctrine regarding intelligence gathering and operational planning. The R&D investment may also spur innovation in related fields, such as sensor fusion, artificial intelligence for target recognition, and data processing, ultimately contributing to a more technologically advanced and responsive military force.

How has spending on R&D for surveillance sensors evolved within the Department of Defense over the past decade?

Spending on R&D for surveillance sensors within the Department of Defense has generally seen consistent investment, driven by the ongoing need for advanced intelligence, surveillance, and reconnaissance (ISR) capabilities across all military branches. While specific figures fluctuate annually based on strategic priorities and budget allocations, there has been a sustained focus on developing more sophisticated sensors capable of operating in diverse environments, detecting smaller or stealthier targets, and providing real-time data. Trends include increased emphasis on multi-spectral and hyperspectral sensing, miniaturization of sensor packages for unmanned systems, and integration of artificial intelligence for automated data analysis. The $93.6 million awarded for this specific R&D effort aligns with this broader trend of significant, targeted investment in enhancing sensor technology to maintain a technological edge.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 65 JONSPIN RD, WILMINGTON, MA, 01887

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: $96,107,003

Exercised Options: $96,107,003

Current Obligation: $93,590,346

Actual Outlays: $3,602

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline