DoD's $9.95M V-22 Troop Seats contract awarded to Golan Industries without competition

Contract Overview

Contract Amount: $9,949,800 ($9.9M)

Contractor: Golan Industries / Army Division (IAI).

Awarding Agency: Department of Defense

Start Date: 2006-11-14

End Date: 2014-03-31

Contract Duration: 2,694 days

Daily Burn Rate: $3.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: Defense

Official Description: V-22 TROOP SEATS

Plain-Language Summary

Department of Defense obligated $9.9 million to GOLAN INDUSTRIES / ARMY DIVISION (IAI). for work described as: V-22 TROOP SEATS Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract duration of over 2,600 days suggests a long-term need for these specialized troop seats. 3. Lack of competition limits opportunities for other manufacturers to offer potentially more cost-effective solutions. 4. Fixed-price contract type offers some cost certainty but may not fully incentivize efficiency without competitive pressure. 5. The specific nature of V-22 troop seats indicates a niche market with potentially limited supplier options. 6. No small business set-aside was utilized, suggesting the primary contractor is not a small business.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and publicly available cost breakdowns. The fixed-price nature provides some cost control, but without comparison to other suppliers or similar contracts, it's difficult to definitively assess if the $9.95 million represents a fair market price. The absence of competition suggests potential risks of inflated pricing compared to a more open market scenario.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when only one source is capable of meeting the requirement, or in situations where competition is deemed not to be in the government's best interest. The lack of multiple bidders means the government did not benefit from the price discovery mechanisms inherent in a competitive 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 ability to secure the best possible value for its investment.

Public Impact

Troop seats for the V-22 Osprey aircraft, directly supporting military aviation operations. Enhances the operational capability and safety of V-22 aircraft by providing specialized seating. Benefits military personnel who utilize the V-22 for transport and operational missions. Primarily impacts the aerospace and defense manufacturing sector, specifically component suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in pricing due to non-competitive nature.
Long contract duration without competitive re-evaluation could lead to complacency in cost management.

Positive Signals

Fixed-price contract type provides some cost predictability.
Specialized nature of the product suggests a potentially unique capability from the awarded contractor.
Supports critical military aviation platforms, ensuring operational readiness.

Sector Analysis

The contract falls within the aerospace and defense manufacturing sector, specifically focusing on interior components for military aircraft. The V-22 Osprey is a unique tiltrotor aircraft, and its specialized seating requirements likely place it in a niche market. Comparable spending benchmarks for such specialized aircraft components are difficult to ascertain without more specific market data, but spending in aerospace manufacturing is substantial.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The nature of manufacturing specialized aircraft components often involves larger, established defense contractors or their direct suppliers, potentially limiting opportunities for smaller firms in this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations. Transparency is limited due to the sole-source nature, making detailed public scrutiny of cost-effectiveness challenging.

Related Government Programs

V-22 Osprey Program
Military Aircraft Components
Aerospace Manufacturing Contracts
Department of Defense Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.9 million to GOLAN INDUSTRIES / ARMY DIVISION (IAI).. V-22 TROOP SEATS

Who is the contractor on this award?

The obligated recipient is GOLAN INDUSTRIES / ARMY DIVISION (IAI)..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $9.9 million.

What is the period of performance?

Start: 2006-11-14. End: 2014-03-31.

What is the specific technical requirement for these V-22 troop seats that necessitates a sole-source award?

The specific technical requirements for V-22 troop seats are driven by the unique operational demands of the aircraft, including its tiltrotor capabilities, vibration profiles, weight restrictions, and safety certifications for troop transport in a military environment. These seats must meet stringent military specifications (Mil-Spec) for durability, crashworthiness, and integration with the aircraft's internal structure. The specialized nature of these requirements, coupled with the limited number of manufacturers capable of meeting such demanding criteria and the existing integration with the V-22 platform, likely contributed to the sole-source determination. Without detailed technical documentation, it's presumed that only Golan Industries possessed the necessary design, manufacturing expertise, and existing certifications to fulfill this specific need without extensive and costly re-qualification processes.

How does the fixed-price contract type mitigate risks in a sole-source award for troop seats?

In a sole-source award, a fixed-price contract type aims to mitigate risk by establishing a ceiling on the total cost the government will pay. Unlike cost-plus contracts, the contractor assumes more of the financial risk if costs exceed the agreed-upon price. For these V-22 troop seats, a fixed-price award means Golan Industries is obligated to deliver the seats for the agreed $9.95 million, regardless of their actual production costs. This incentivizes the contractor to manage their expenses efficiently to maximize profit. However, the effectiveness of this mitigation is dependent on the initial price negotiation; if the fixed price was set too high due to the lack of competition, the government may still overpay, even with the fixed-price structure.

What is the historical spending pattern for V-22 troop seats, and how does this contract compare?

Detailed historical spending patterns specifically for V-22 troop seats are not readily available in the public domain, especially for sole-source awards. This particular contract, valued at $9.95 million and spanning from November 2006 to March 2014 (approximately 2,694 days), represents a significant, albeit singular, investment over that period. Without prior competitive contracts or detailed cost breakdowns for previous procurements, it is difficult to establish a direct comparison or identify trends. The duration and value suggest a substantial requirement for these components over an extended period. Future procurements, if competed, would provide a clearer benchmark for assessing cost-effectiveness.

What are the potential implications of awarding this contract without competition on future V-22 component procurements?

Awarding this contract without competition could set a precedent or reinforce the perception that sole-source awards are acceptable for V-22 components. This might discourage potential competitors from investing in the capabilities needed to bid on future requirements, further entrenching the incumbent supplier. For taxpayers, it means a continued lack of competitive pressure, potentially leading to higher prices for future parts and services. Agencies are generally required to justify sole-source awards, but if justifications are repeatedly accepted for similar components, it can reduce the overall competitiveness of the defense supply chain for the V-22 program.

Are there any known performance issues or track record concerns associated with Golan Industries regarding this or similar contracts?

Publicly available information does not immediately highlight significant performance issues or track record concerns specifically tied to Golan Industries for this V-22 troop seat contract. As a sole-source award, detailed performance metrics and comparisons are less scrutinized than in a competitive environment. However, the long duration of the contract (over 7 years) suggests a sustained, albeit non-competed, relationship. Without access to government performance reports (e.g., Contractor Performance Assessment Reporting System - CPARS), a definitive assessment of their track record on this specific contract is limited. Generally, for sole-source awards, the justification often hinges on the contractor's unique ability to meet requirements, implying a baseline level of acceptable performance.

Industry Classification

NAICS: Manufacturing › Motor Vehicle Parts Manufacturing › Motor Vehicle Seating and Interior Trim Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: BNEI YEHUDA, LOD

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $9,949,800

Exercised Options: $9,949,800

Current Obligation: $9,949,800

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline