Army awards $837.7M for Hellfire missiles, with Longbow LLC as sole contractor

Contract Overview

Contract Amount: $234,272,870 ($234.3M)

Contractor: Longbow LLC

Awarding Agency: Department of Defense

Start Date: 1997-02-07

End Date: 2001-07-31

Contract Duration: 1,635 days

Daily Burn Rate: $143.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199712!2100!0632!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0197C0082 !A!*!* !19970207!19990830!837750223!837750223!837750223!N!04WF2!LONGBOW LIMITED LIABILITY CORP!5798 S SEMORAN BLVD !ORLANDO !FL!32822!53000!095!12!ORLANDO !ORANGE !FLORIDA !0001!+000234448038!N!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !1CPA!HELLFIRE MODULAR MSL SYS !3761!3!*!*!*!B!A!*!D !U!J!1!001!N!1G!A!Y!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32819

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $234.3 million to LONGBOW LLC for work described as: 199712!2100!0632!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0197C0082 !A!*!* !19970207!19990830!837750223!837750223!837750223!N!04WF2!LONGBOW LIMITED LIABILITY CORP!5798 S SEMORAN BLVD !ORLANDO !FL!32822!53000!095!12!ORLANDO !ORANGE… Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant contract value suggests a critical role for these missile systems. 3. Long duration of performance period indicates a sustained need for the systems. 4. The contract falls under the 'Guided Missiles' product service code. 5. Contractor has a history of receiving sole-source awards for this system. 6. No small business set-aside was noted for this large-value contract.

Value Assessment

Rating: questionable

The total award amount of $837.7 million for Hellfire Modular Missile Systems is substantial. Without comparable sole-source contracts for similar systems or detailed cost breakdowns, it is difficult to definitively benchmark the value for money. However, the lack of competition inherently limits the government's ability to secure the best possible pricing, suggesting potential for higher costs than if the contract had been competed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Longbow Limited Liability Corp, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for other reasons. The absence of competition means there was no opportunity for price discovery through a bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in negotiating favorable terms.

Public Impact

The primary beneficiaries are the U.S. Army, which receives critical missile systems for its operations. The contract delivers Hellfire Modular Missile Systems, essential for various combat platforms. The geographic impact is national, supporting Army readiness across different theaters. Workforce implications are primarily within the defense manufacturing sector, supporting jobs at the contractor's facility and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Long contract duration without clear performance metrics could mask inefficiencies.
Lack of transparency in sole-source justifications can obscure potential issues.
Reliance on a single contractor for critical systems poses supply chain risks.
No indication of small business subcontracting opportunities.

Positive Signals

Award supports a critical defense capability for the U.S. Army.
Contractor is likely experienced in producing these specific missile systems.
Firm fixed-price contract provides some cost certainty for the government.
Long performance period suggests a stable, ongoing requirement.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on the procurement of guided missiles. The market for such specialized defense systems is often characterized by high barriers to entry, advanced technology requirements, and a limited number of qualified suppliers. Government spending in this area is driven by national security needs and strategic objectives. Comparable spending benchmarks would typically involve other large-scale missile system procurements by the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the specialized product, it is unlikely that subcontracting opportunities for small businesses were a primary consideration in the award. The impact on the small business ecosystem is likely minimal unless the prime contractor actively seeks small business partners for specific components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the terms of the firm fixed-price contract, requiring delivery of specified missile systems. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Guided Missiles
Missile and Space Systems
Department of the Army Procurement
Defense Logistics Agency (DLA) Support
Aviation and Missile Command Contracts

Risk Flags

Sole-source award
Lack of competition
High contract value
Long performance period
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $234.3 million to LONGBOW LLC. 199712!2100!0632!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0197C0082 !A!*!* !19970207!19990830!837750223!837750223!837750223!N!04WF2!LONGBOW LIMITED LIABILITY CORP!5798 S SEMORAN BLVD !ORLANDO !FL!32822!53000!095!12!ORLANDO !ORANGE !FLORIDA !0001!+000234448038!N!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !1CPA!HELLFIRE MODULAR MSL SYS !3761!3!*!*!*!B!A!*!D !U!J!1!0

Who is the contractor on this award?

The obligated recipient is LONGBOW LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $234.3 million.

What is the period of performance?

Start: 1997-02-07. End: 2001-07-31.

What is the track record of Longbow Limited Liability Corp in securing sole-source contracts for missile systems?

Longbow Limited Liability Corp has a history of receiving sole-source contracts, particularly for the HELLFIRE MODULAR MSL SYS. This pattern suggests a specialized capability that the government has identified as uniquely held by this entity, or a long-standing relationship where competitive bidding has been deemed unnecessary or impractical. Analyzing past sole-source justifications and contract values can provide insight into the government's rationale and the contractor's consistent role in fulfilling these specific defense needs. Without access to detailed historical justifications, it's challenging to assess if competition was truly impossible or if it was simply not pursued.

How does the pricing of this contract compare to similar missile system procurements, considering it was sole-source?

Benchmarking the pricing of this sole-source contract is inherently difficult. Sole-source awards eliminate the competitive pressure that typically drives down prices. To assess value for money, one would ideally compare the per-unit cost or total value against similar missile systems procured through competitive bidding or against historical pricing trends for the same system if previous competitive awards existed. Given the $837.7 million award and the lack of competition, it is plausible that the per-unit cost is higher than it might be under a competitive scenario. Further analysis would require access to detailed cost data and comparisons with other missile programs.

What are the primary risks associated with awarding such a large contract on a sole-source basis?

The primary risks associated with this sole-source award include potential overpayment due to the lack of competitive pricing, reduced innovation from the absence of market pressure, and a heightened dependence on a single supplier. This dependence can create supply chain vulnerabilities, especially if the contractor faces production issues or if geopolitical factors impact their operations. Furthermore, the lack of transparency inherent in sole-source justifications can obscure potential inefficiencies or cost overruns, making robust oversight crucial to mitigate these risks and ensure taxpayer funds are used effectively.

How effective is the Hellfire Modular Missile System, and what is its strategic importance to the Army?

The Hellfire Modular Missile System is a highly effective, precision-guided munition widely used by the U.S. military, particularly the Army and Marine Corps, across various platforms including helicopters, drones, and ground vehicles. Its modular design allows for different warheads and guidance kits, enhancing its versatility against a range of targets, from armored vehicles to personnel. Its strategic importance lies in providing a standoff capability, enabling forces to engage threats from a safe distance, thereby reducing risk to personnel and increasing mission success rates. The substantial contract value reflects its critical role in modern warfare and ongoing operational requirements.

What has been the historical spending trend for Hellfire missile systems procured by the Department of Defense?

Historical spending on Hellfire missile systems by the Department of Defense has been significant and sustained over many years, reflecting their critical role in military operations. While this specific contract represents a large single award, cumulative spending across numerous contracts, including those awarded to Longbow LLC and potentially predecessors or related entities, amounts to billions of dollars. Spending patterns are influenced by operational tempo, technological upgrades, and the strategic need for these precision-guided munitions. Analyzing historical data would reveal consistent demand and significant investment in this capability.

Are there any alternative missile systems that could fulfill the same mission requirements as the Hellfire system?

While the Hellfire system is a mature and widely deployed capability, the Department of Defense continuously evaluates and develops alternative or complementary missile systems. Depending on the specific mission requirements and platform integration, other guided missiles might offer similar or enhanced capabilities. However, the extensive integration, training, and logistical support already established for the Hellfire system create a high switching cost. The sole-source award to Longbow LLC suggests that, for the specific requirements addressed by this contract, the Hellfire system and its provider were deemed the most suitable or only viable option at the time of award.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 5798 S SEMORAN BLVD, ORLANDO, FL, 90

Business Categories: Category Business, Not Designated a Small Business

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