Army awards $16.5M for navigation systems, with Elbit America securing the sole-source contract
Contract Overview
Contract Amount: $16,527,506 ($16.5M)
Contractor: Elbitamerica, Inc.
Awarding Agency: Department of Defense
Start Date: 2010-09-16
End Date: 2017-05-31
Contract Duration: 2,449 days
Daily Burn Rate: $6.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: HUD COMPONENTS
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76179
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $16.5 million to ELBITAMERICA, INC. for work described as: HUD COMPONENTS Key points: 1. The contract value of $16.5 million for navigation systems represents a significant investment in military technology. 2. Elbit America, Inc. was the sole awardee, indicating a lack of broader market competition for this specific requirement. 3. The contract duration of approximately 2449 days (over 6 years) suggests a long-term need for these systems. 4. The fixed-price contract type aims to control costs, but the absence of competition raises questions about optimal pricing. 5. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector for these instruments. 6. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) or similar framework.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable contract data. The firm fixed-price structure suggests an attempt to manage costs, but without competitive bids, it's difficult to ascertain if the $16.5 million represents optimal value for the government. The duration of the contract (over 6 years) implies a substantial commitment, and the absence of competition could lead to higher prices than if multiple vendors had vied for the business. Further analysis would require access to internal cost data or more detailed market research on similar navigation systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Elbit America, Inc., was solicited. This approach is typically used when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process. This can potentially lead to higher costs for taxpayers as there is no direct incentive for the contractor to offer the lowest possible price.
Taxpayer Impact: Sole-source awards limit opportunities for other businesses and can result in higher prices for the government compared to competitive procurements, potentially increasing the financial burden on taxpayers.
Public Impact
The primary beneficiaries are the U.S. Army personnel who will utilize the advanced navigation systems, enhancing operational capabilities. The contract delivers critical Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing capabilities. The contract is associated with Texas (ST: TX, SN: TEXAS), suggesting potential manufacturing or support activities within the state. The award supports the defense industrial base, potentially impacting jobs and technological development within the specialized manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially leading to higher costs.
- Lack of transparency in the sole-source justification process.
- Long contract duration could mask inefficiencies or price increases over time.
- Limited visibility into the specific technological advancements or obsolescence risks associated with the systems.
Positive Signals
- Firm fixed-price contract type provides cost certainty for the government.
- Award to an established contractor (Elbit America) suggests a degree of reliability.
- Focus on critical navigation systems indicates support for essential military functions.
Sector Analysis
The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, classified under NAICS code 334511. This is a specialized segment of the defense industrial base focused on high-technology components. The market for such systems is often characterized by high barriers to entry due to R&D costs and stringent performance requirements. Comparable spending benchmarks are difficult to establish without more specific details on the system's capabilities, but defense spending in advanced electronics and navigation is substantial.
Small Business Impact
This contract does not appear to have a small business set-aside (SS=false, SB=false). As a sole-source award, it bypasses the typical competitive processes where small businesses might have opportunities to bid or subcontract. There is no explicit indication of subcontracting plans for small businesses within the provided data. This award does not directly contribute to the small business contracting goals of the agency.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a delivery order under a potentially larger contract vehicle, oversight might be integrated into existing program reviews. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Defense Logistics Agency (DLA) Navigation Systems
- Air Force Navigation and Guidance Systems
- Navy Aviation Electronics Systems
- Army Aviation Support Equipment
- Department of Defense Research and Development
Risk Flags
- Sole-source award lacks competitive pricing.
- Long contract duration may not reflect current market value.
- Limited public data on specific system capabilities.
- Potential for vendor lock-in due to sole-source nature.
Tags
defense, department-of-the-army, navigation-systems, sole-source, firm-fixed-price, delivery-order, elbit-america, texas, manufacturing, defense-electronics, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.5 million to ELBITAMERICA, INC.. HUD COMPONENTS
Who is the contractor on this award?
The obligated recipient is ELBITAMERICA, 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 $16.5 million.
What is the period of performance?
Start: 2010-09-16. End: 2017-05-31.
What specific navigation systems are being procured under this contract, and what are their key performance characteristics?
The provided data indicates the contract is for 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' under NAICS code 334511. However, the specific type of navigation systems (e.g., GPS receivers, inertial navigation units, radar systems) and their detailed performance characteristics are not specified. Elbit America is known for a wide range of defense electronics, including avionics and navigation solutions. Without further details, it's impossible to ascertain the exact technology being acquired or its specific capabilities beyond the general classification.
What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?
The data explicitly states the contract was 'NOT COMPETED' and identifies the award type as 'sole-source'. Government contracts are typically awarded sole-source when only one responsible source is available or capable of meeting the agency's needs. This could be due to unique technological requirements, proprietary technology, or urgent and compelling circumstances. The specific justification document (e.g., a Justification and Approval document) would contain the detailed rationale, which is not provided in this data snippet. Without this document, the precise reasons for foregoing competition remain unknown.
How does the awarded price of $16.5 million compare to market rates or similar systems procured competitively?
Directly comparing the $16.5 million award to market rates or similar competitively procured systems is difficult without knowing the exact specifications and quantities of the navigation systems. As a sole-source award, there is no competitive benchmark established through this specific procurement. To assess value, one would need to research other government contracts for similar navigation equipment, considering factors like technology maturity, performance, and quantity. Elbit America's pricing for other sole-source or competitively awarded contracts for comparable systems could also serve as a reference point, but such data is not included here.
What is Elbit America's track record with the Department of the Army and for similar navigation system contracts?
Elbit America, Inc. is a known defense contractor with a history of supplying various systems to the U.S. military, including the Army. While the provided data confirms they received this specific $16.5 million contract, it does not detail their broader performance history, past issues, or successes with the Army or in delivering navigation systems. A comprehensive assessment would require reviewing contract databases for other awards to Elbit America, their performance ratings (e.g., CPARS), and any relevant past performance information related to navigation or similar electronic systems.
What are the potential risks associated with a long-term (2449 days) sole-source contract for navigation systems?
A long-term sole-source contract for navigation systems carries several potential risks. Firstly, the lack of competition throughout the contract's duration (over 6 years) may prevent the government from benefiting from potential price reductions or technological advancements offered by other vendors. Secondly, there's a risk of vendor lock-in, where the government becomes heavily reliant on a single supplier, potentially limiting future flexibility. Thirdly, without competitive pressure, the contractor may have less incentive to innovate or maintain the highest levels of efficiency and quality over the extended period. Finally, if the technology becomes obsolete or a superior alternative emerges, the government might be contractually obligated to continue purchasing a less effective system.
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: FIRE CONTROL EQPT.
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Elbit Systems Ltd (UEI: 514421098)
Address: 4700 MARINE CREEK PKWY, FORT WORTH, TX, 76179
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $16,527,506
Exercised Options: $16,527,506
Current Obligation: $16,527,506
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W58RGZ10D0242
IDV Type: IDC
Timeline
Start Date: 2010-09-16
Current End Date: 2017-05-31
Potential End Date: 2017-05-31 12:05:00
Last Modified: 2018-10-17
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