Department of Defense awards $13.2M contract for navigation systems, with Elbit America Inc. as the sole provider

Contract Overview

Contract Amount: $13,238,055 ($13.2M)

Contractor: Elbitamerica, Inc.

Awarding Agency: Department of Defense

Start Date: 2007-12-18

End Date: 2009-07-31

Contract Duration: 591 days

Daily Burn Rate: $22.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DO 11 FOR HUDS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76179

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $13.2 million to ELBITAMERICA, INC. for work described as: DO 11 FOR HUDS Key points: 1. The contract's value of $13.2 million appears reasonable given the specialized nature of navigation systems. 2. Sole-source award indicates a lack of competition, potentially impacting price efficiency. 3. The contract duration of 591 days suggests a focused, short-term requirement. 4. Fixed-price contract type shifts risk to the contractor, potentially leading to higher initial bids. 5. The award is for a specific system, implying a need for specialized manufacturing capabilities. 6. Texas is the place of performance, suggesting regional economic impact.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the navigation systems procured. However, the $13.2 million award for a 591-day duration suggests a moderate investment. The firm fixed-price contract type implies that the contractor bears the cost overrun risk, which can sometimes lead to higher initial pricing to account for contingencies. Without comparable sole-source awards for similar systems, a definitive value-for-money assessment is difficult, but the price appears within a plausible range for specialized defense equipment.

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 a unique capability or proprietary technology is required, or in urgent situations where competition is not feasible. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. This raises questions about whether the best possible price was achieved.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, there's less assurance that the price reflects the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are the Department of the Army, receiving critical navigation systems for its operations. The contract delivers specialized Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing capabilities. The geographic impact is concentrated in Texas, where the contractor, Elbit America Inc., is located and where performance is expected. Workforce implications include employment opportunities at Elbit America Inc. and potentially its subcontractors within Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to no-bid award.
Potential for contractor lock-in if the technology is proprietary and difficult to replace.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Award to an established company (Elbit America Inc.) suggests a degree of reliability.
Specific system manufacturing indicates a focused and potentially high-quality deliverable.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a niche within the broader aerospace and defense industry. This sector is characterized by high technological barriers to entry, significant R&D investment, and stringent quality and performance requirements. Spending in this area is critical for national security and advanced military operations. Comparable spending benchmarks are difficult to establish without knowing the exact system, but defense spending on navigation and guidance systems is substantial globally.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Elbit America Inc. is a significant defense contractor, and it is unlikely that a sole-source award of this nature would involve subcontracting opportunities specifically targeted at small businesses unless explicitly mandated. The primary impact on the small business ecosystem would be indirect, through potential competition for components or services if Elbit America Inc. chooses to source them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, the justification for the procurement method would be subject to review. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's performance or execution.

Related Government Programs

Defense Navigation Systems
Aeronautical and Nautical Instruments
Military Guidance Systems
Sole-Source Defense Contracts
Elbit Systems Ltd. (Parent Company)

Risk Flags

Sole-source award
Lack of competition
Potential for price inefficiency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.2 million to ELBITAMERICA, INC.. DO 11 FOR HUDS

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 $13.2 million.

What is the period of performance?

Start: 2007-12-18. End: 2009-07-31.

What is Elbit America Inc.'s track record with the Department of Defense for similar navigation systems?

Elbit America Inc., a subsidiary of Elbit Systems Ltd., has a significant history of supplying defense electronics and systems to the U.S. Department of Defense. While specific details on their track record for this exact navigation system are not provided in the data, the company is known for its expertise in areas such as electro-optics, command and control, and intelligence, surveillance, and reconnaissance (ISR) systems. Their involvement in numerous defense contracts suggests a capacity to meet military specifications and delivery schedules. However, a deeper dive into past performance reviews, contract modifications, and on-time delivery rates for comparable systems would be necessary for a comprehensive assessment of their track record on this specific award.

How does the $13.2 million contract value compare to similar navigation system procurements by the DoD?

Direct comparison of the $13.2 million contract value is challenging without knowing the precise specifications and capabilities of the navigation systems procured. However, the award amount for a 591-day duration suggests a moderate investment. The sole-source nature of this award means that competitive pricing pressures were absent, which could lead to a higher price than if multiple bids were solicited. To benchmark effectively, one would need to identify other sole-source or competitively awarded contracts for similar navigation, guidance, or aeronautical/nautical instrument systems procured by the DoD or other federal agencies. Factors like technological sophistication, quantity, and required performance standards would heavily influence price comparisons.

What are the primary risks associated with this sole-source contract award?

The primary risk associated with this sole-source contract is the lack of price competition. Without multiple bidders, the Department of Defense may not have secured the most cost-effective solution, potentially leading to overpayment. There's also a risk of contractor dependency; if Elbit America Inc. is the only provider of this specific technology, the DoD could face challenges in future procurements or upgrades. Furthermore, sole-source awards can sometimes indicate a lack of market availability or a highly specialized, proprietary technology, which might limit future sourcing options. Ensuring robust oversight and clear performance metrics becomes crucial to mitigate these risks and ensure value delivery.

What is the expected program effectiveness and impact of these navigation systems?

The effectiveness and impact of these navigation systems are expected to enhance the operational capabilities of the Department of the Army. Advanced navigation systems are critical for mission success, improving accuracy, safety, and efficiency in various operational environments, including air, land, and sea. They enable precise positioning, route planning, and situational awareness, which are vital for troop deployment, reconnaissance, and logistical support. The specific impact will depend on the systems' technological sophistication and how they are integrated into existing military platforms. Successful delivery and performance of these systems should contribute to improved mission readiness and effectiveness for the units utilizing them.

How does this $13.2 million award fit into the historical spending patterns for navigation systems by the DoD?

This $13.2 million award represents a specific procurement within the broader category of navigation systems for the Department of Defense. The DoD historically spends billions of dollars annually on a wide array of defense systems, including navigation, guidance, and control technologies. Awards for such systems can range from small, specialized components to large, complex platform integrations. This particular contract, being a sole-source award for a specific system over approximately two years, is likely a component of a larger modernization or sustainment effort. Analyzing its place requires comparing it against the total budget allocated for navigation and related technologies, as well as the frequency and value of other contracts within this domain.

What are the implications of the 'DO' award type for this contract?

The 'DO' award type typically signifies a 'Direct Order' or a similar designation within the context of specific government contracting vehicles, often related to defense priorities or specific programs. In this case, it suggests that the contract was likely issued under an existing framework agreement, a priority rating system, or a specific directive that allows for direct issuance without a full, open competition process. This can expedite the acquisition of critical items. The implications include a potentially faster procurement timeline but also reinforce the non-competitive nature of this specific award, as it bypasses standard competitive bidding procedures typically associated with other award types like 'FA' (Full and Open) or 'CS' (Competitive Sources).

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, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,238,055

Exercised Options: $13,238,055

Current Obligation: $13,238,055

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ05D0552

IDV Type: IDC

Timeline