DoD awards $941M for Hellfire missiles, raising concerns about competition and value
Contract Overview
Contract Amount: $88,610,900 ($88.6M)
Contractor: Hellfire Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2004-12-22
End Date: 2007-10-31
Contract Duration: 1,043 days
Daily Burn Rate: $85.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200503!000992!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05C0036 !A!N! !N! ! !20041222!20070630!941092306!941092306!941092306!N!HELLFIRE SYSTEMS LIMITED LIABI!5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000045416989!N!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !541 !LONGBOW HELLFIRE !336414!E! !1! ! ! ! ! !20200930!B! ! !A! !D!N!J!1!001!N!2A!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $88.6 million to HELLFIRE SYSTEMS, LLC for work described as: 200503!000992!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05C0036 !A!N! !N! ! !20041222!20070630!941092306!941092306!941092306!N!HELLFIRE SYSTEMS LIMITED LIABI!5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORAN… Key points: 1. The contract for Hellfire missiles was awarded without competition, potentially leading to higher costs. 2. The total value of $941 million over 3 years suggests significant investment in missile systems. 3. The 'NOT COMPETED' status raises questions about price discovery and taxpayer value. 4. The sector is Guided Missile and Space Vehicle Manufacturing, a critical defense area.
Value Assessment
Rating: questionable
The contract value of $941,092,306 is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar missile system procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Hellfire Systems, LLC. This lack of competition limits price discovery and may result in a higher cost to the government.
Taxpayer Impact: The absence of competition for a nearly $1 billion contract raises concerns about the efficient use of taxpayer funds.
Public Impact
Taxpayers may be overpaying for Hellfire missiles due to the lack of competitive bidding. The Department of Defense relies on this missile system, making its cost and availability critical. Future procurements in this category could be influenced by this non-competitive award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Limited price transparency
Positive Signals
- Critical defense procurement
- Established supplier relationship
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of defense. Spending benchmarks for such niche procurements are hard to establish without competitive data.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this sole-source contract, either as prime contractors or subcontractors.
Oversight & Accountability
The 'NOT COMPETED' status suggests that standard competitive oversight processes may have been bypassed. Further review is needed to understand the justification for this approach.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Potential for inflated pricing
- Lack of transparency in price determination
- Limited market competition
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, fl, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $88.6 million to HELLFIRE SYSTEMS, LLC. 200503!000992!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05C0036 !A!N! !N! ! !20041222!20070630!941092306!941092306!941092306!N!HELLFIRE SYSTEMS LIMITED LIABI!5600 WEST SAND LAKE ROAD !ORLANDO !FL!32819!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000045416989!N!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !541 !LONGBOW HELLFIRE !336414!E! !1! ! ! ! ! !202
Who is the contractor on this award?
The obligated recipient is HELLFIRE SYSTEMS, 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 $88.6 million.
What is the period of performance?
Start: 2004-12-22. End: 2007-10-31.
What was the justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED'. A detailed review of the contract file would be necessary to ascertain the specific justification, such as a lack of available sources, urgent need, or specific technological requirements that only Hellfire Systems, LLC could meet.
How does the unit cost of these Hellfire missiles compare to similar systems procured competitively?
Without competitive benchmark data for comparable missile systems or previous competitive awards for the Hellfire itself, it is impossible to definitively assess the unit cost. The sole-source nature of this award prevents direct comparison and raises concerns about potential overpricing.
What is the long-term strategic impact of relying on a single source for critical missile systems?
Sole-source reliance can create vulnerabilities, including potential supply chain disruptions, price escalation, and reduced innovation. While it may ensure immediate supply, it can diminish long-term strategic flexibility and bargaining power for the Department of Defense.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: GUIDED MISSLES
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
Address: 5600 WEST SAND LAKE ROAD, ORLANDO, FL, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Timeline
Start Date: 2004-12-22
Current End Date: 2007-10-31
Potential End Date: 2007-10-31 00:00:00
Last Modified: 2010-10-14
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