DoD's $59.3M Apache Helmet Contract Awarded Sole-Source to Elbit America Amidst Limited Competition
Contract Overview
Contract Amount: $59,293,910 ($59.3M)
Contractor: Elbitamerica, Inc.
Awarding Agency: Department of Defense
Start Date: 2012-09-27
End Date: 2018-04-30
Contract Duration: 2,041 days
Daily Burn Rate: $29.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ADVANCE PROCUREMENT FOR AAIH APACHE HELICOPTOR HELMETS
Place of Performance
Location: FORT WORTH, TARRANT County, TEXAS, 76179
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $59.3 million to ELBITAMERICA, INC. for work described as: ADVANCE PROCUREMENT FOR AAIH APACHE HELICOPTOR HELMETS Key points: 1. Value for money is difficult to assess due to the sole-source nature of the award. 2. Competition dynamics were limited, with the contract being 'NOT COMPETED'. 3. Risk indicators include potential for overpricing and lack of market pressure. 4. Performance context is tied to the sustainment of critical aviation equipment. 5. Sector positioning is within the defense manufacturing of specialized aircraft components.
Value Assessment
Rating: fair
Benchmarking the value for money on this sole-source contract is challenging without competitive bids. The awarded amount of $59.3 million for Apache helicopter helmets suggests a significant investment in specialized aviation equipment. Without comparable sole-source awards or detailed cost breakdowns, it's difficult to definitively assess if the pricing is optimal. However, the duration of the contract (2041 days) and the firm fixed-price nature aim to provide cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The data indicates the contract was 'NOT COMPETED'. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition limits price discovery and may result in higher costs compared to a fully competed scenario.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as there was no market pressure to drive down prices.
Public Impact
The primary beneficiaries are the U.S. Army aviation units relying on advanced helmet systems for Apache helicopter operations. The contract delivers essential protective and communication equipment for pilots. Geographic impact is primarily within military installations where Apache helicopters are deployed. Workforce implications include supporting specialized manufacturing jobs within Elbit America and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
- Lack of open competition raises concerns about market responsiveness and innovation.
- Contract duration of over 5 years requires ongoing monitoring for continued value.
- Dependence on a single supplier can create supply chain vulnerabilities.
Positive Signals
- Firm Fixed Price contract provides cost certainty for the government.
- Award supports critical aviation safety and operational capabilities.
- Contractor is an established entity in defense manufacturing.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on aircraft components. The market for specialized aviation helmets is niche, driven by the stringent requirements of military aviation. Comparable spending benchmarks would likely be found within other sole-source or limited-competition awards for similar high-specification defense equipment, where costs are often higher due to R&D, certification, and low-volume production.
Small Business Impact
The contract data indicates that small business participation was not a primary consideration, as the contract was not competed and Elbit America, Inc. is a large business. There is no explicit mention of small business set-asides or subcontracting plans within the provided data. This suggests that opportunities for small businesses within this specific contract may be limited unless they are part of Elbit America's supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which shifts some risk to the contractor. 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
- Apache Helicopter Modernization Programs
- Aviation Life Support Equipment Procurement
- Department of Defense Combat Vehicle Components
- Sole-Source Defense Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for price inflation
Tags
defense, department-of-defense, department-of-the-army, apache-helicopter, helmet, sole-source, not-competed, firm-fixed-price, elbit-america, aircraft-parts, texas
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.3 million to ELBITAMERICA, INC.. ADVANCE PROCUREMENT FOR AAIH APACHE HELICOPTOR HELMETS
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 $59.3 million.
What is the period of performance?
Start: 2012-09-27. End: 2018-04-30.
What is Elbit America's track record with similar sole-source defense contracts?
Elbit America, Inc., a subsidiary of Elbit Systems Ltd., has a history of securing defense contracts, including sole-source awards, particularly in specialized areas like avionics, helmets, and electronic warfare systems. Their track record often involves fulfilling specific technological requirements for military platforms. While specific details on past sole-source helmet contracts are not provided here, their overall performance in the defense sector suggests a capacity to meet stringent military specifications. However, the lack of competition in sole-source awards necessitates careful review of pricing and delivery against industry benchmarks where possible, and reliance on government oversight to ensure fair value.
How does the $59.3 million cost compare to market rates for advanced helicopter helmets?
Directly comparing the $59.3 million cost to 'market rates' for advanced helicopter helmets is challenging due to the sole-source nature of this award and the highly specialized requirements of military-grade equipment. Civilian or commercial helicopter helmets, while advanced, do not typically meet the same stringent safety, communication, and integration standards as those required for platforms like the Apache. Sole-source contracts inherently lack the price discovery mechanism of competitive bidding. Therefore, without access to detailed cost breakdowns from the contractor or data from comparable sole-source military helmet procurements, it is difficult to definitively state whether this represents a fair market price. The firm fixed-price structure does offer cost certainty to the government.
What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?
The primary risks associated with awarding a $59.3 million contract on a sole-source basis are significant. Firstly, the lack of competition can lead to inflated pricing, as the contractor faces no market pressure to offer the most cost-effective solution. Secondly, there's a reduced incentive for the contractor to innovate or improve efficiency beyond what is contractually required. Thirdly, the government becomes dependent on a single supplier, creating potential vulnerabilities in the supply chain and limiting options if performance issues arise. Finally, it can foster a perception of unfairness and potentially discourage other capable companies from pursuing future defense contracts if they believe opportunities are not equitably competed.
How effective is the firm fixed-price (FFP) contract type in managing costs for specialized defense equipment like helmets?
The Firm Fixed Price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and risks can be reasonably assessed, as is often the case with established equipment like helicopter helmets. Under an FFP contract, the contractor agrees to a total price for a well-defined product or service, and is responsible for all costs incurred and for achieving a profit. This shifts the cost risk from the government to the contractor. For specialized defense equipment, FFP provides cost certainty to the government, preventing cost overruns due to contractor inefficiencies. However, if the initial price is not adequately negotiated or benchmarked (especially in sole-source situations), the government might still pay a premium, albeit a predictable one.
What are the historical spending patterns for Apache helicopter helmets or similar aviation components within the Department of Defense?
Historical spending patterns for Apache helicopter helmets and similar aviation components within the Department of Defense are characterized by long-term sustainment contracts and periodic upgrades. Procurement often occurs through sole-source or limited-competition vehicles due to the specialized nature and long lifecycle of military platforms. Spending can fluctuate based on fleet readiness requirements, modernization initiatives, and the introduction of new technologies. While specific aggregate spending figures for Apache helmets over time are not detailed in this data, it's understood that such critical components represent a consistent, albeit variable, line item in the defense budget, often involving significant investment due to high performance and safety standards.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
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: $59,293,910
Exercised Options: $59,293,910
Current Obligation: $59,293,910
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-09-27
Current End Date: 2018-04-30
Potential End Date: 2018-04-30 00:00:00
Last Modified: 2019-01-30
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