DoD Awards $1.3B for Hellfire Missiles to Hellfire Systems, LLC, with No Competition
Contract Overview
Contract Amount: $1,297,838,861 ($1.3B)
Contractor: Hellfire Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2008-08-15
End Date: 2017-07-31
Contract Duration: 3,272 days
Daily Burn Rate: $396.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THIS CONTRACT IS FOR THE MANUFACTURE AND DELIVERY OF THE FOLLOWING FIRM REQUIREMENTS: 710 AGM-114K HFII HEAT MISSILES, 18 AGM-114M HFII BFWMS, 532 AGM-114N HFII MAC WARHEAD MISSILES, 20 ATM-114K HFII SMOKE CHARGE AIR TRAINING MISSILES, 170 ATM-114Q HFII MASS SIMULANT AIR TRAINING MISSILES, AND 3 TGM-M36E HFII TRAINING GUIDED MISSILES. IT IS ALSO TO ESTABLISH FFP RANGE OPTIONS FOR ALL OF THE ABOVE MENTIONED VARIANTS AS WELL AS THE AGM-114P HFII PREDATOR MISSILES; FFP RANGE OPTIONS FOR THE FOLLOWING MISSILE CONVERSIONS: AGM-114K TO AGM-114K-1A, AGM-114K TO AGM-114K-2A, AGM-114K TO AGM-114M, AGM-114K TO AGM-114N, AGM-114K TO AGM-114P, AGM-114K TO ATM-114K SMOKE CHARGE AIR TRAINING MISSILE, AGM-114K TO AGM-114Q MASS SIMULANT AIR TRAINING MISSILE, AND AGM-114N TO AGM-114N-6; THE ESTABLISHMENT OF FFP OPTIONS FOR THE CONDUCT OF QUALITY ASSURANCE LOT VERIFICATION TESTING (QALVT) FLIGHT TESTS, QALVT FLIGHT TEST HARDWARE, AND GUIDANCE SECTION TEST ARTICLES FOR INDEPENDENT GOVERNMENT TEST&EVALUATION; THE ESTABLISHMENT OF NTE OPTIONS FOR PRODUCTION RAMP-UP TO 400 TACTICAL UNITS PER MONTH, UNPLANNED FIRST ARTICLE TESTING FOR WARHEADS, ESAFS, AND THE PREDATOR GYROSCOPE; THE ESTABLISHMENT OF UNPRICED OPTIONS FOR REFURBISHMENT OF SPECIAL TOOLING/SPECIAL TEST EQUIPMENT, AND 29 DIFFERENT HFII MISSILE SPARE PARTS.
Place of Performance
Location: ORLANDO, ORANGE County, FLORIDA, 32819
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $1.30 billion to HELLFIRE SYSTEMS, LLC for work described as: THIS CONTRACT IS FOR THE MANUFACTURE AND DELIVERY OF THE FOLLOWING FIRM REQUIREMENTS: 710 AGM-114K HFII HEAT MISSILES, 18 AGM-114M HFII BFWMS, 532 AGM-114N HFII MAC WARHEAD MISSILES, 20 ATM-114K HFII SMOKE CHARGE AIR TRAINING MISSILES, 170 ATM-114Q HFII MASS SIMULANT AIR TRAININ… Key points: 1. The contract is for the manufacture and delivery of various Hellfire missile variants and training missiles. 2. It also includes establishing firm-fixed-price (FFP) range options for missile conversions and a specific variant. 3. The sole awardee is Hellfire Systems, LLC, indicating a lack of competitive bidding for this significant procurement. 4. The sector is dominated by defense manufacturing, with a focus on guided missile production.
Value Assessment
Rating: questionable
The total award value is substantial at over $1.29 billion. Without competitive bidding, it is difficult to assess if this price represents fair market value compared to potential alternatives or previous procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning Hellfire Systems, LLC was the only source considered. This lack of competition limits price discovery and may result in higher costs for the government.
Taxpayer Impact: The absence of competition raises concerns about the optimal use of taxpayer funds, as a potentially lower price may have been achievable through a competitive process.
Public Impact
Procurement of advanced missile systems for national defense. Potential for extended reliance on a single supplier for critical munitions. Impact on military readiness and operational capabilities through the supply of these weapons.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value without competitive benchmark
Positive Signals
- Addresses critical defense needs
- Establishes FFP options for future flexibility
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of guided missiles. Spending benchmarks in this area are highly dependent on technological advancements, geopolitical factors, and specific weapon system requirements.
Small Business Impact
There is no indication that small businesses were involved in this sole-source contract, either as prime contractors or subcontractors. The focus appears to be on a large, specialized defense manufacturer.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the government is receiving fair pricing and that the contract terms are being met. Transparency in future procurements of similar systems is crucial.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- Supply chain risk concentration
- Limited transparency in price determination
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, fl, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.30 billion to HELLFIRE SYSTEMS, LLC. THIS CONTRACT IS FOR THE MANUFACTURE AND DELIVERY OF THE FOLLOWING FIRM REQUIREMENTS: 710 AGM-114K HFII HEAT MISSILES, 18 AGM-114M HFII BFWMS, 532 AGM-114N HFII MAC WARHEAD MISSILES, 20 ATM-114K HFII SMOKE CHARGE AIR TRAINING MISSILES, 170 ATM-114Q HFII MASS SIMULANT AIR TRAINING MISSILES, AND 3 TGM-M36E HFII TRAINING GUIDED MISSILES. IT IS ALSO TO ESTABLISH FFP RANGE OPTIONS FOR ALL OF THE ABOVE MENTIONED VARIANTS AS WELL AS THE AGM-114P HFII PREDATOR MISSILES; FFP RANGE OPTIONS FOR THE FOLLO
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 $1.30 billion.
What is the period of performance?
Start: 2008-08-15. End: 2017-07-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?
The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically requires a justification, such as the unavailability of other sources or specific technical requirements. Without this justification, it's impossible to assess the fairness of the pricing. Further investigation into the contracting officer's justification is needed to understand the rationale and the process for price negotiation.
What are the long-term strategic implications of relying on a single supplier for these critical missile systems?
Sole-source contracts can create dependency on a single supplier, potentially leading to supply chain vulnerabilities, reduced innovation due to lack of competition, and price escalation over time. While it can ensure a consistent supply, it limits the government's options if the supplier faces production issues or decides to increase prices significantly.
How does the unit cost of these Hellfire missiles compare to similar systems or previous procurements, given the lack of competition?
Without competitive bids or publicly available cost data for comparable systems, it is impossible to benchmark the unit cost effectively. The absence of competition means there is no market-driven price discovery. A thorough cost analysis by the Department of Defense would be necessary to determine if the negotiated price is reasonable.
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
Solicitation ID: W31P4Q08R0162
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 5600 SAND LAKE RD MP-121, ORLANDO, FL, 32819
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $1,297,838,861
Exercised Options: $1,297,838,861
Current Obligation: $1,297,838,861
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-08-15
Current End Date: 2017-07-31
Potential End Date: 2017-07-31 12:07:00
Last Modified: 2022-03-07
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