DoD awards $20.87M for V-22 Osprey troop seats, with limited competition and no small business set-aside

Contract Overview

Contract Amount: $20,873,311 ($20.9M)

Contractor: Golan Industries / Army Division (IAI).

Awarding Agency: Department of Defense

Start Date: 2008-08-07

End Date: 2015-12-28

Contract Duration: 2,699 days

Daily Burn Rate: $7.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: V-22 IMPROVED TROOP SEATS

Plain-Language Summary

Department of Defense obligated $20.9 million to GOLAN INDUSTRIES / ARMY DIVISION (IAI). for work described as: V-22 IMPROVED TROOP SEATS Key points: 1. Contract awarded for specialized troop seats for the V-22 Osprey aircraft. 2. The contract was not competed, raising questions about potential cost efficiencies. 3. No small business participation was mandated or reported. 4. The contract duration was substantial, spanning over 7 years. 5. The fixed-price nature of the contract shifts some risk to the contractor. 6. This procurement falls under the broader category of aircraft parts manufacturing.

Value Assessment

Rating: fair

The contract value of $20.87 million for V-22 troop seats over a 7-year period suggests a moderate annual spend. Without specific details on the number of seats or their complexity, direct comparison to similar contracts is challenging. However, the lack of competition may have prevented potentially lower pricing that could have been achieved through a more open bidding process. The fixed-price nature provides some cost certainty but doesn't guarantee optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The absence of competition limits the government's ability to leverage market forces to drive down prices and ensure the best possible value.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the most cost-effective solution available in the market, potentially leading to higher overall expenditures for these specialized aircraft components.

Public Impact

The primary beneficiaries are the U.S. military personnel who will utilize the V-22 Osprey aircraft, benefiting from improved seating. The contract delivers essential components for the V-22 Osprey, a critical tiltrotor aircraft for troop transport and special operations. The geographic impact is primarily within the Department of Defense's operational theaters where the V-22 is deployed. Workforce implications are likely concentrated within the contractor's facilities involved in manufacturing and assembly of aircraft parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competed contract.
Sole-source awards can reduce transparency and accountability in pricing.
No small business participation could limit opportunities for smaller firms in the defense supply chain.

Positive Signals

Fixed-price contract shifts performance risk to the contractor.
The contract supports a critical military aircraft, ensuring operational readiness.
The award duration provides stability for the contractor and ensures supply continuity.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically the manufacturing of aircraft parts. The market for specialized aircraft components, particularly for unique platforms like the V-22 Osprey, can be niche. While the overall aircraft parts manufacturing industry is substantial, contracts for specific, high-value components often involve limited suppliers due to technical requirements and existing platform integration. Benchmarking spending in this specific sub-segment is difficult without more granular data on comparable troop seat procurements.

Small Business Impact

This contract did not include a small business set-aside, nor does it appear to have involved significant subcontracting opportunities for small businesses based on the provided data. The sole-source nature of the award further limits the potential for small business involvement. This could mean missed opportunities to foster small business growth within the defense industrial base for this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are inherent in the fixed-price contract type, which incentivizes the contractor to manage costs. Transparency may be limited due to the sole-source nature of the award, making public scrutiny of pricing and value more challenging.

Related Government Programs

V-22 Osprey Program
Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Procurement
Military Aircraft Components

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.9 million to GOLAN INDUSTRIES / ARMY DIVISION (IAI).. V-22 IMPROVED 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $20.9 million.

What is the period of performance?

Start: 2008-08-07. End: 2015-12-28.

What is the specific technical requirement for these V-22 troop seats, and how does it justify a sole-source award?

The provided data does not detail the specific technical requirements for the V-22 improved troop seats. However, sole-source awards are typically justified when a product is uniquely available from a single source due to proprietary technology, specialized manufacturing capabilities, or essential integration with existing complex systems like the V-22 Osprey. The justification for this specific award would be documented in the contract's Justification and Approval (J&A) for Other Than Full and Open Competition (OTFOC). Without access to the J&A, it's difficult to definitively assess the technical necessity that precluded competition. It's possible the seats require specific safety certifications, weight specifications, or integration with the aircraft's internal systems that only Golan Industries / Army Division (IAI) could meet at the time of the award.

How does the $20.87 million contract value compare to historical spending on V-22 troop seats or similar aircraft components?

The provided data offers a single contract award of $20.87 million for V-22 improved troop seats spanning from August 7, 2008, to December 28, 2015 (approximately 7.4 years). To compare this to historical spending, one would need access to historical procurement databases to identify previous or subsequent contracts for V-22 troop seats, or comparable seating solutions for other tiltrotor or heavy-lift aircraft. Without this comparative data, it's challenging to determine if $20.87 million represents a high, low, or average expenditure for such components over that timeframe. The annual average spend would be approximately $2.8 million, which provides a baseline for comparison if other similar contracts can be identified.

What are the potential risks associated with a sole-source award for critical aircraft components like troop seats?

Sole-source awards for critical aircraft components carry several potential risks. Firstly, the absence of competition can lead to inflated prices, as the government lacks the leverage of multiple bids to secure the best value. Secondly, it can reduce transparency in pricing and cost justification. Thirdly, it may stifle innovation, as there is less incentive for the sole provider to invest in cost-saving technologies or process improvements if they are guaranteed the contract. Lastly, it creates a dependency on a single supplier, which can be problematic if that supplier experiences financial difficulties, production issues, or decides to exit the market, potentially jeopardizing the supply chain for essential components.

What is the track record of Golan Industries / Army Division (IAI) in supplying components for the V-22 Osprey program or similar military aircraft?

The provided data identifies Golan Industries / Army Division (IAI) as the contractor for these V-22 improved troop seats. To assess their track record, further research into their contract history with the Department of Defense, specifically related to the V-22 program or other aircraft platforms, would be necessary. This would involve examining past performance reviews, on-time delivery rates, quality control metrics, and any history of contract disputes or modifications. Without this additional information, it is difficult to provide a detailed assessment of their specific track record beyond their role in fulfilling this particular contract.

How does the fixed-price contract type influence the government's risk and the contractor's performance incentives for this V-22 troop seat procurement?

A Firm Fixed Price (FFP) contract, as indicated for this procurement, places the primary responsibility for cost overruns on the contractor. This means that Golan Industries / Army Division (IAI) is obligated to deliver the troop seats for the agreed-upon price, regardless of their actual costs incurred during production. This structure incentivizes the contractor to manage their costs efficiently and perform the work diligently to maintain profitability. For the government, the primary risk is that the contractor may cut corners on quality to meet the fixed price, although quality assurance measures should mitigate this. The main benefit for the government is cost certainty, as the total price is known upfront, barring any contract modifications.

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

Solicitation ID: N0001908R0007

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: BNEI YEHUDA, BNEI YEHUDA

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $20,873,311

Exercised Options: $20,873,311

Current Obligation: $20,873,311

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline