DoD awards $6M for helmet spares, raising questions about competition and value

Contract Overview

Contract Amount: $5,992,543 ($6.0M)

Contractor: Elbitamerica, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-22

End Date: 2025-11-07

Contract Duration: 1,507 days

Daily Burn Rate: $4.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR PURCHASE OF INTEGRATED HELMET AND DISPLAY SIGHT SYSTEM (IHADSS) SPARES.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76179

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $6.0 million to ELBITAMERICA, INC. for work described as: DELIVERY ORDER FOR PURCHASE OF INTEGRATED HELMET AND DISPLAY SIGHT SYSTEM (IHADSS) SPARES. Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant duration of the contract (over 4 years) suggests a long-term need for these specialized parts. 3. The specific nature of the IHADSS spares indicates a critical component for aviation systems. 4. Lack of competition raises concerns about whether the government secured the best possible price. 5. The award value of nearly $6 million warrants scrutiny for cost-effectiveness given the sole-source nature.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized components. Without competitive bids, it's difficult to ascertain if the $5.99 million price represents fair market value for IHADSS spares. The fixed-price contract type offers some cost control, but the absence of competition means the government cannot leverage market forces to drive down prices. Further analysis would require understanding the unit costs and comparing them to any historical pricing or internal cost estimates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Elbit America, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and can lead to higher costs for the government compared to a fully competed contract. The lack of competition here means taxpayers may not be benefiting from the most cost-effective solution.

Taxpayer Impact: The absence of competition means taxpayers are not benefiting from potential cost savings that could arise from a bidding war among multiple suppliers. This could translate to higher overall program costs.

Public Impact

Pilots and aircrews operating aircraft equipped with the Integrated Helmet and Display Sight System (IHADSS) will benefit from the availability of necessary spare parts. Ensures the continued operational readiness and safety of critical aviation platforms within the Department of Defense. The contract supports the maintenance and sustainment of advanced avionics systems, contributing to overall military effectiveness. Workforce implications may include specialized technicians involved in the repair and installation of these helmet systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially leading to overpayment.
Lack of transparency in pricing due to no competitive bids.
Potential for vendor lock-in for specialized spares.
Long contract duration without competitive re-evaluation.

Positive Signals

Ensures availability of critical spares for operational readiness.
Fixed-price contract type provides some cost certainty.
Supports advanced aviation systems vital for defense.

Sector Analysis

The market for aerospace and defense electronics, particularly specialized components like helmet-mounted display systems, is characterized by high barriers to entry due to technological complexity and stringent quality requirements. Companies like Elbit America operate within a niche sector where innovation and reliability are paramount. Spending in this area is driven by the need to maintain and upgrade sophisticated military hardware, ensuring technological superiority. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition awards for similar high-tech military components.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a small business set-aside component. There is no explicit indication of subcontracting opportunities for small businesses within the provided data. The focus on specialized, high-value defense electronics often means that prime contracts are awarded to larger, established firms, potentially limiting direct participation for smaller enterprises in this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and the Department of Defense's contracting oversight mechanisms. As a sole-source award, scrutiny would focus on the justification for not competing the requirement and the reasonableness of the price. Transparency is limited by the lack of a competitive process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Avionics Spares
Helmet Mounted Displays
Defense Logistics Agency Procurement
Sole Source Defense Contracts
Aviation Systems Maintenance

Risk Flags

Sole Source Award
Lack of Competition
Potential for Price Inflation
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.0 million to ELBITAMERICA, INC.. DELIVERY ORDER FOR PURCHASE OF INTEGRATED HELMET AND DISPLAY SIGHT SYSTEM (IHADSS) SPARES.

Who is the contractor on this award?

The obligated recipient is ELBITAMERICA, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $6.0 million.

What is the period of performance?

Start: 2021-09-22. End: 2025-11-07.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. The specific justification for this determination is not detailed in the provided data. Typically, sole-source awards are justified under circumstances such as: only one responsible source exists capable of providing the required item or service; an urgent and compelling need exists that cannot be satisfied through competitive means; or a public interest determination is made. Without further documentation from the agency (e.g., a Justification and Approval document), the precise reason for bypassing competition remains unknown. This lack of transparency is a key concern for value assessment.

How does the pricing of these IHADSS spares compare to similar systems or historical purchases?

Direct comparison of pricing for these specific IHADSS spares is difficult without access to detailed unit cost data and a benchmark of similar systems purchased competitively. As this was a sole-source award, there is no competitive pricing data to establish a market baseline. Historical purchase data for the same or similar spares from Elbit America, Inc., or other vendors, would be necessary for a meaningful comparison. The absence of competitive bids means the government did not benefit from price discovery mechanisms that typically occur in open markets, making it challenging to assess if the $5.99 million represents a fair and reasonable price.

What are the potential risks associated with relying on a sole-source provider for critical helmet system spares?

Relying on a sole-source provider for critical spares like IHADSS components introduces several risks. Firstly, there's a significant risk of paying inflated prices due to the lack of competition. Secondly, the government may face vendor lock-in, making it difficult and costly to switch providers even if better options emerge. Thirdly, the sole-source vendor might deprioritize government orders if they have more lucrative commercial contracts, potentially leading to delivery delays. Finally, the absence of competitive pressure could reduce the vendor's incentive to innovate or improve product quality over time, impacting long-term system sustainment.

What is the operational significance of the Integrated Helmet and Display Sight System (IHADSS) and its spares?

The Integrated Helmet and Display Sight System (IHADSS) is a crucial piece of equipment for pilots and aircrew in modern military aircraft, particularly in fighter jets and attack helicopters. It integrates flight information, targeting data, navigation cues, and sensor imagery directly into the pilot's field of view, often projected onto the helmet's visor. This allows pilots to maintain situational awareness and control the aircraft and its weapon systems without needing to look down at cockpit instruments. Consequently, the availability of reliable spares for the IHADSS is vital for maintaining aircraft readiness, pilot safety, and mission effectiveness.

How does this contract fit into the broader spending patterns for aviation electronics and support equipment within the DoD?

This contract for IHADSS spares represents a component of the Department of Defense's substantial investment in maintaining and upgrading its aviation fleet. Spending on avionics, including helmet-mounted systems, is a continuous requirement driven by the operational tempo, the aging of existing platforms, and the introduction of new technologies. While $5.99 million is a significant sum for spares, it must be viewed within the context of the overall defense budget, which allocates billions to aircraft procurement, sustainment, and modernization. This specific award highlights the ongoing need for specialized support equipment to ensure the functionality of advanced aviation systems.

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: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $5,992,543

Exercised Options: $5,992,543

Current Obligation: $5,992,543

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $602,956

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRDL121D0044

IDV Type: IDC

Timeline