Homeland Security spent $51.2M on AS350B3 helicopters, a purchase not competed

Contract Overview

Contract Amount: $51,221,136 ($51.2M)

Contractor: Airbus Helicopters, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2007-08-16

End Date: 2009-03-30

Contract Duration: 592 days

Daily Burn Rate: $86.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AS350B3 LIGHT ENFORCEMENT HELICOPTERS

Place of Performance

Location: GRAND PRAIRIE, TARRANT County, TEXAS, 75052

State: Texas Government Spending

Plain-Language Summary

Department of Homeland Security obligated $51.2 million to AIRBUS HELICOPTERS, INC. for work described as: AS350B3 LIGHT ENFORCEMENT HELICOPTERS Key points: 1. The contract for AS350B3 helicopters was awarded without competition, raising questions about potential cost savings. 2. A fixed-price contract was used, which shifts some risk to the government but can provide cost certainty. 3. The contract duration was 592 days, indicating a medium-term need for these aircraft. 4. The primary contractor, Airbus Helicopters, Inc., is a major player in the aerospace industry. 5. The purchase falls under Aircraft Engine and Engine Parts Manufacturing, suggesting a focus on operational readiness. 6. The contract was awarded to a single source, limiting opportunities for price discovery through bidding.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bidding. The fixed-price nature provides some cost certainty, but without comparison to other offers, it's difficult to assess if the $51.2 million represents a fair market price. The unit price, if calculable, would need to be compared against industry standards for similar helicopter models and configurations to determine value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in urgent situations. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium for these helicopters due to the absence of competitive pressure. Without bids from other suppliers, it is harder to ensure the most cost-effective solution was secured.

Public Impact

U.S. Customs and Border Protection benefits from the acquisition of these specialized helicopters for its law enforcement operations. The AS350B3 helicopters are likely used for border surveillance, patrol, and interdiction missions. The geographic impact is primarily focused on areas requiring aerial support for border security, potentially across Texas and other border states. The acquisition supports the operational capabilities of federal law enforcement personnel involved in border protection.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to a higher price than could have been achieved through bidding.
Sole-source awards can indicate potential single points of failure in supply chains or market access.
Fixed-price contracts can sometimes lead to less flexibility if requirements change significantly during performance.
The specific operational effectiveness and maintenance costs of these helicopters are not detailed, posing a potential risk if they are higher than anticipated.

Positive Signals

The contract specifies a firm fixed price, providing budget certainty for the government.
Airbus Helicopters is a reputable manufacturer with a known track record in producing reliable aircraft.
The acquisition directly supports a critical national security mission for U.S. Customs and Border Protection.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. The market for specialized law enforcement helicopters is a niche within this sector. Spending on such assets is driven by national security needs and technological advancements. Comparable spending benchmarks would involve analyzing procurements of similar aircraft by other federal agencies or international partners.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of the procurement (helicopters) and the sole-source award, it is unlikely that subcontracting opportunities for small businesses were a primary consideration or explicitly mandated. Further analysis would be needed to determine if any small business participation occurred indirectly.

Oversight & Accountability

Oversight for this contract would fall under the Department of Homeland Security's internal review processes and potentially the Government Accountability Office (GAO) if protests or audits were initiated. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arose during the contract's lifecycle.

Related Government Programs

Homeland Security Aircraft Procurement
Border Patrol Aviation Assets
Law Enforcement Helicopter Contracts
Department of Defense Rotary Wing Aircraft

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for overpayment
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $51.2 million to AIRBUS HELICOPTERS, INC.. AS350B3 LIGHT ENFORCEMENT HELICOPTERS

Who is the contractor on this award?

The obligated recipient is AIRBUS HELICOPTERS, 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 $51.2 million.

What is the period of performance?

Start: 2007-08-16. End: 2009-03-30.

What is the typical lifespan and operational cost of an AS350B3 helicopter in a law enforcement role?

The typical lifespan of an AS350B3 helicopter, like most aircraft, depends heavily on maintenance, operational tempo, and environmental factors. Generally, airframes can last for tens of thousands of flight hours, often exceeding 20-30 years with proper care. Operational costs include fuel, routine maintenance (inspections, component replacements), unscheduled repairs, pilot salaries, and hangarage. For a law enforcement role, which can involve demanding flight profiles and extended flight times, these costs can be significant. While specific figures vary, annual operating costs for similar helicopters can range from several hundred thousand to over a million dollars, encompassing everything from direct flight expenses to major overhauls. Without detailed usage data from CBP, precise figures for this contract's operational phase are speculative but would be a critical factor in the total cost of ownership beyond the initial procurement.

How does the $51.2 million expenditure compare to other recent helicopter procurements by federal agencies?

Comparing the $51.2 million expenditure requires identifying similar helicopter types and quantities procured by federal agencies. The AS350B3 is a light utility helicopter, often used for surveillance, training, and light transport. If this $51.2 million represents a single aircraft, it would be exceptionally high, suggesting it includes extensive customization, advanced sensor packages, or a fleet of aircraft. If it represents multiple units, the per-unit cost becomes the critical benchmark. For instance, the U.S. Army's recent procurements of Black Hawk helicopters (a medium utility helicopter) have involved contracts in the hundreds of millions for dozens of aircraft, indicating a higher per-unit cost but for a more capable platform. Light helicopters like the Bell 407 or older models might be procured for $5-15 million depending on configuration. The sole-source nature of this DHS contract makes direct comparison difficult, but it warrants scrutiny to ensure the price aligns with market rates for comparable light utility/surveillance helicopters, especially considering the AS350B3 is a mature platform.

What specific capabilities does the AS350B3 offer that made it the sole choice for U.S. Customs and Border Protection?

The AS350B3, now known as the H125, is recognized for its performance in hot and high-altitude conditions, a significant advantage for operations in diverse border terrains. Its key capabilities include excellent maneuverability, a relatively spacious cabin for personnel or equipment, and a good power-to-weight ratio, making it suitable for surveillance and patrol missions. It can be equipped with various mission equipment such as electro-optical/infrared (EO/IR) cameras, searchlights, and communication systems. The 'sole-source' justification would likely hinge on specific performance requirements that only the H125 could meet, perhaps related to payload capacity with specific sensor packages, endurance in challenging environments, or existing pilot/maintenance training infrastructure already in place for this model within CBP. Without the official justification documentation, the precise technical reasons remain unconfirmed, but these performance attributes are typical selling points for this helicopter type in demanding roles.

What are the risks associated with a sole-source contract for critical assets like law enforcement helicopters?

Sole-source contracts for critical assets like law enforcement helicopters carry several inherent risks. Primarily, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most competitive bid. This means taxpayers may overpay for the asset. Secondly, it limits the government's options if the chosen contractor fails to perform adequately, experiences financial difficulties, or if better alternatives emerge later. There's also a reduced incentive for the contractor to innovate or provide exceptional service, as they have a guaranteed sale. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or missed opportunities for other qualified vendors, including small businesses. Finally, reliance on a single source can create vulnerabilities in the supply chain for parts and maintenance, especially if the contractor faces production issues or decides to discontinue the model.

How has spending on light enforcement helicopters evolved for DHS over the past decade?

Analyzing DHS spending on light enforcement helicopters over the past decade requires examining procurement data across its various components, including U.S. Customs and Border Protection (CBP) and the U.S. Coast Guard. Spending patterns are influenced by evolving threats, technological advancements, and budget allocations. Historically, agencies like CBP have relied on a mix of fixed-wing and rotary-wing aircraft for surveillance and interdiction. The AS350/H125 series has been a popular choice due to its versatility and performance. Over the last ten years, there has been a trend towards acquiring more advanced surveillance platforms, including helicopters with enhanced sensor suites and longer endurance. Spending may have fluctuated based on fleet modernization needs, the retirement of older assets, and the introduction of new capabilities. Without specific aggregated data for 'light enforcement helicopters' across DHS, it's difficult to provide precise figures, but the overall trend likely reflects a sustained investment in aerial capabilities to support border security and maritime patrol missions, with periodic large capital expenditures for fleet upgrades or replacements.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing

Product/Service Code: AEROSPACE CRAFT LAUNCHING, LANDING, GROUND HANDLING AND SERVICING EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HSBP1007R1043

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Airbus U.S. Space & Defense, Inc. (UEI: 403284867)

Address: 2701 FORUM DR, GRAND PRAIRIE, TX, 75052

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $51,221,136

Exercised Options: $51,221,136

Current Obligation: $51,221,136

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline