DoD awards $31.6M for ANVIS/HUD systems, raising questions about competition and value

Contract Overview

Contract Amount: $31,645,215 ($31.6M)

Contractor: Elbitamerica, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-09-01

End Date: 2025-06-12

Contract Duration: 2,841 days

Daily Burn Rate: $11.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LARGE CONTRACT FOR PURCHASE OF (6) NSNS ON THE AVIATORS NIGHT VISION IMAGING SYSTEM/HEADS UP DISPLAY SYSTEM (ANVIS/HUD)

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76179

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $31.6 million to ELBITAMERICA, INC. for work described as: LARGE CONTRACT FOR PURCHASE OF (6) NSNS ON THE AVIATORS NIGHT VISION IMAGING SYSTEM/HEADS UP DISPLAY SYSTEM (ANVIS/HUD) Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract's duration of over 7 years suggests a long-term need for these specialized systems. 3. Fixed-price contract type aims to control costs, but sole-source nature may negate savings. 4. Performance is managed by the Defense Contract Management Agency, indicating a focus on delivery. 5. The award to Elbit America, Inc. warrants a review of their track record with similar systems. 6. Lack of competition is a significant risk indicator for potential overpayment. 7. The contract is for a critical aviation component, impacting pilot safety and mission readiness.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source award. Without competitive bids, it's difficult to ascertain if the $31.6 million price reflects fair market value. The fixed-price nature provides some cost certainty, but the absence of competition means taxpayers may not be receiving the best possible price. Further analysis would require comparing this award to any historical sole-source awards for similar systems or to publicly available pricing for comparable technologies, if such data exists.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Elbit America, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they inherently limit price discovery and can lead to higher costs for the government. The lack of competition means there was no market pressure to drive down the price.

Taxpayer Impact: The absence of competition means taxpayers likely paid a premium. Without multiple bids, the government had less leverage to negotiate a lower price, potentially resulting in funds being spent that could have been saved through a competitive process.

Public Impact

Pilots in the Department of Defense will benefit from advanced night vision and heads-up display capabilities, enhancing situational awareness and safety. The contract delivers critical ANVIS/HUD systems essential for aviation operations, supporting national defense missions. The primary geographic impact is within military aviation units, though the specific bases or deployments are not detailed. The contract supports specialized manufacturing and integration roles within the defense industrial base, potentially impacting a skilled workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Long contract duration (over 7 years) increases exposure to potential cost overruns or performance issues.
Lack of transparency in the sole-source justification makes it difficult to assess the necessity of this procurement method.
Reliance on a single supplier could create future dependency and limit options for upgrades or replacements.

Positive Signals

Fixed-price contract type provides cost certainty for the awarded amount.
Award to a known entity (Elbit America, Inc.) suggests a potentially established relationship and understanding of requirements.
The systems procured are critical for aviation safety and mission effectiveness.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on specialized avionics and imaging systems. The market for such niche military equipment is often characterized by limited suppliers due to high research and development costs, stringent performance requirements, and security clearances. Comparable spending benchmarks are difficult to establish without more detailed specifications and competitive data, but the overall defense electronics market is substantial, with significant government investment in advanced technologies.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there information indicating significant subcontracting opportunities for small businesses. The award to Elbit America, Inc., a large defense contractor, suggests that the primary focus is on fulfilling a large-scale requirement directly. This could mean limited direct benefit to the small business ecosystem in this specific procurement, although larger contractors often engage small businesses for component manufacturing or specialized services.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The contract type (Firm Fixed Price) inherently places cost risk on the contractor. Transparency regarding the sole-source justification and the specific performance metrics would be key to assessing accountability. Inspector General involvement would typically occur if performance issues, fraud, or waste were identified.

Related Government Programs

Night Vision Systems
Heads-Up Displays
Avionics Manufacturing
Defense Procurement
Aerospace Systems

Risk Flags

Sole-source award
Lack of competitive bidding
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.6 million to ELBITAMERICA, INC.. LARGE CONTRACT FOR PURCHASE OF (6) NSNS ON THE AVIATORS NIGHT VISION IMAGING SYSTEM/HEADS UP DISPLAY SYSTEM (ANVIS/HUD)

Who is the contractor on this award?

The obligated recipient is ELBITAMERICA, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $31.6 million.

What is the period of performance?

Start: 2017-09-01. End: 2025-06-12.

What is Elbit America, Inc.'s track record with ANVIS/HUD systems and similar defense contracts?

Elbit America, Inc., a subsidiary of Elbit Systems Ltd., has a significant presence in the defense electronics market, including capabilities in electro-optics, avionics, and command and control systems. They have been involved in various programs supplying components and integrated systems for military aircraft. While specific details on their ANVIS/HUD system performance under this particular contract require access to internal DoD performance reports, their broader portfolio suggests experience in this domain. However, the sole-source nature of this award means direct comparison to their competitive bids on other contracts is not possible. A review of past performance evaluations, if publicly available, would provide further insight into their reliability and quality in delivering similar defense technologies.

How does the $31.6 million cost compare to similar ANVIS/HUD system procurements, especially those competed?

Directly comparing the $31.6 million cost is difficult due to the sole-source nature of this award and the lack of specific unit quantities or detailed system specifications provided in the public data. Competitive procurements for similar avionics systems often yield a wide range of prices depending on technological sophistication, quantity, and vendor. Without competitive bids for this specific contract, it's impossible to definitively state if $31.6 million represents a fair market price or if it's inflated due to the lack of competition. Historical data on sole-source awards for comparable systems, if available, would be the most relevant benchmark, but such data is often not publicly accessible. The fixed-price nature suggests a ceiling, but the absence of competitive pressure means the actual price may not reflect optimal value.

What are the primary risks associated with a sole-source award for critical aviation systems like ANVIS/HUD?

The primary risk associated with a sole-source award for critical aviation systems like ANVIS/HUD is the potential for inflated costs due to the absence of competitive bidding. Without multiple vendors vying for the contract, the government loses leverage to negotiate the best possible price, potentially leading to overpayment. Another significant risk is reduced innovation, as the sole supplier may have less incentive to invest in improving the technology or offering more cost-effective solutions. Furthermore, reliance on a single source can create supply chain vulnerabilities and make the government dependent on that specific contractor for future upgrades, maintenance, and support, potentially limiting future options and increasing long-term costs.

What is the expected program effectiveness and impact on pilot performance given these systems?

The ANVIS/HUD systems are designed to significantly enhance pilot performance and safety, particularly during night operations and in complex flight environments. ANVIS (Aviator's Night Vision Imaging System) provides pilots with enhanced vision in low-light conditions, allowing them to see terrain, obstacles, and other aircraft. HUD (Heads-Up Display) projects critical flight information (such as airspeed, altitude, and navigation data) directly into the pilot's field of view, reducing the need to look down at instrument panels. The effectiveness of these specific systems procured under this contract will depend on their technological capabilities, reliability, and integration with existing aircraft systems. Successful implementation is expected to improve situational awareness, reduce pilot workload, and ultimately contribute to mission success and survivability.

How has the Department of Defense's spending on ANVIS/HUD systems or similar avionics evolved over the past five years?

Analyzing the Department of Defense's spending evolution on ANVIS/HUD systems or similar avionics requires access to comprehensive historical contract databases and budget reports. Publicly available data often aggregates spending into broader categories like 'Aircraft Components' or 'Avionics Systems,' making it challenging to isolate spending specifically on ANVIS/HUD systems over time. However, general trends in defense spending indicate a consistent investment in modernizing aviation capabilities, including advanced night vision and display technologies, to maintain a technological edge. Factors such as geopolitical conditions, technological advancements, and specific platform upgrade requirements influence year-over-year spending. This particular $31.6 million award represents a significant, albeit singular, investment within this category.

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: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRBL117R0011

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: $31,645,215

Exercised Options: $31,645,215

Current Obligation: $31,645,215

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline