DHS awards $15M for navigation systems, with a 5-year performance period

Contract Overview

Contract Amount: $15,064,208 ($15.1M)

Contractor: Elbitamerica, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2023-09-01

End Date: 2029-08-31

Contract Duration: 2,191 days

Daily Burn Rate: $6.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DO AWARD

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76136

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $15.1 million to ELBITAMERICA, INC. for work described as: DO AWARD Key points: 1. Value for money appears fair given the long-term nature of the contract. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a fixed-price contract type mitigating cost overrun risks. 4. Performance context is a 5-year delivery order for navigation systems. 5. Sector positioning is within the manufacturing of navigation and guidance instruments.

Value Assessment

Rating: fair

The contract value of $15.06 million over approximately 5 years suggests an annual spend of around $3 million. Benchmarking this against similar contracts for navigation systems is difficult without more specific details on the exact technology and scope. However, the firm fixed-price nature of the award indicates that the government has locked in a price, which can be advantageous if costs rise, but potentially disadvantageous if market prices fall significantly. The value seems reasonable for a long-term supply agreement for specialized equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The data does not specify the number of bidders, but a full and open process generally implies a robust competition. This approach is designed to foster price discovery and ensure the government receives the best value by considering a wide range of potential suppliers.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and innovative solutions, thereby maximizing the value of federal dollars spent.

Public Impact

U.S. Customs and Border Protection benefits from enhanced navigation capabilities. Services delivered include the provision of search, detection, navigation, guidance, aeronautical, and nautical systems and instruments. Geographic impact is primarily within the United States, supporting border security operations. Workforce implications are likely related to the manufacturing and maintenance of these specialized systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the specific navigation system becomes proprietary or difficult to integrate with other systems.
Long-term contract duration could lead to complacency if performance monitoring is not rigorous.
Dependence on a single delivery order for a critical function might pose supply chain risks if the contractor faces production issues.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a competitive market for these navigation systems.
Award to a known entity like Elbit America, Inc. may indicate a track record of performance in this domain.

Sector Analysis

The contract falls within the North American Industry Classification System (NAICS) code 334511, which covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. This sector is characterized by high technological sophistication and often involves specialized components and engineering. Spending in this area is critical for defense, homeland security, and aviation industries. Comparable spending benchmarks would depend on the specific type and quantity of instruments procured, but federal investment in navigation and detection technology is substantial.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, Elbit America, Inc., may engage small businesses as subcontractors, depending on their own supply chain needs and procurement policies. The absence of a small business set-aside means the primary competition was open to all responsible sources, including large businesses.

Oversight & Accountability

Oversight for this contract will primarily be managed by the U.S. Customs and Border Protection (CBP) within the Department of Homeland Security (DHS). Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods and services. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would typically fall under the DHS Office of Inspector General, which investigates fraud, waste, and abuse in DHS programs and contracts.

Related Government Programs

Department of Homeland Security Procurement
Customs and Border Protection Technology
Navigation System Manufacturing
Federal Acquisition Regulations
Defense and Security Equipment Contracts

Risk Flags

Long-term contract duration may require vigilant performance monitoring.
Potential for technological obsolescence over the 5-year performance period.
Dependence on a single delivery order for critical navigation capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $15.1 million to ELBITAMERICA, INC.. DO AWARD

Who is the contractor on this award?

The obligated recipient is ELBITAMERICA, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $15.1 million.

What is the period of performance?

Start: 2023-09-01. End: 2029-08-31.

What is Elbit America, Inc.'s track record with the Department of Homeland Security and similar navigation system contracts?

Elbit America, Inc. is a subsidiary of Elbit Systems Ltd., a global defense electronics company. They have a history of supplying various defense and homeland security systems. While specific details on their past performance with DHS for navigation systems require deeper database analysis, their presence in the defense sector suggests experience with complex government contracts. Reviewing past performance evaluations and contract awards for Elbit America, Inc. within DHS and other federal agencies would provide a clearer picture of their reliability and expertise in delivering similar navigation and detection equipment. This includes examining any past issues related to delivery timelines, product quality, or contract modifications.

How does the $15.06 million contract value compare to similar federal procurements for navigation systems over a 5-year period?

Comparing the $15.06 million contract value, which spans approximately 5 years, to similar federal procurements requires access to detailed contract databases and specific technical requirements. On average, annual spending for navigation systems can vary widely based on complexity, quantity, and technological advancement. A $3 million annual spend (approximately $15M/5 years) for specialized navigation and detection instruments could be considered moderate to high, depending on whether it involves cutting-edge technology, large quantities, or integrated system solutions. Without knowing the exact specifications (e.g., airborne vs. ground-based, sensor types, software integration), a precise benchmark is challenging. However, it falls within the range of significant federal investments in critical operational equipment for agencies like CBP.

What are the primary risks associated with this firm fixed-price contract for navigation systems?

The primary risks associated with this firm fixed-price contract involve potential limitations in flexibility and contractor incentive. While fixed-price contracts protect the government from cost overruns, they can disincentivize the contractor from seeking cost efficiencies or implementing innovative, lower-cost solutions once the price is set. If unforeseen technical challenges arise or material costs increase significantly beyond projections, the contractor might face reduced profit margins, potentially impacting their motivation or leading to disputes. Conversely, if the contractor finds ways to significantly reduce costs below the fixed price, the government may not benefit from those savings. Another risk is ensuring the specified technology remains current and effective throughout the 5-year performance period, as technological obsolescence can occur.

How effective is the 'full and open competition' strategy in ensuring value for money for navigation system procurements?

The 'full and open competition' strategy is generally considered the most effective method for ensuring value for money in federal procurements, including for navigation systems. By allowing all responsible sources to compete, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive bids that reflect fair market prices. This process encourages innovation as contractors strive to differentiate their offerings. Furthermore, it provides a transparent and justifiable basis for contract award, enhancing public trust. While it requires more upfront effort in solicitation and evaluation, the potential for cost savings and access to superior solutions typically outweighs these initial investments, leading to better overall value for taxpayers.

What are the historical spending patterns for navigation systems by U.S. Customs and Border Protection?

Historical spending patterns for navigation systems by U.S. Customs and Border Protection (CBP) would likely show a consistent need for advanced technology to support border surveillance and interdiction operations. CBP utilizes a range of assets, including aircraft, vessels, and ground vehicles, all requiring sophisticated navigation and detection equipment. Spending in this category would fluctuate based on technological upgrades, replacement cycles for aging equipment, and evolving mission requirements. Analyzing past contract awards for similar systems (e.g., radar, sensors, communication equipment, GPS-related technology) would reveal trends in contract types, award values, and key contractors. This data would help contextualize the current $15.06 million award within CBP's broader investment strategy in operational technology.

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: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Elbit Systems Ltd

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: $23,891,646

Exercised Options: $15,064,208

Current Obligation: $15,064,208

Actual Outlays: $4,687,925

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 70B02C23D00000023

IDV Type: IDC

Timeline