DoD's $24.4M contract for fuel tank fire suppression kits shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $24,433,714 ($24.4M)

Contractor: Hazard Protection Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2008-05-20

End Date: 2010-01-04

Contract Duration: 594 days

Daily Burn Rate: $41.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: EXTERNAL FUEL TANK FIRE SUPPRESSION KITS FOR HEAVY TACTICAL VEHICLES OPERATING IRAQ.

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99515

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $24.4 million to HAZARD PROTECTION SYSTEMS, INC for work described as: EXTERNAL FUEL TANK FIRE SUPPRESSION KITS FOR HEAVY TACTICAL VEHICLES OPERATING IRAQ. Key points: 1. The contract was awarded through full and open competition, indicating a broad search for qualified vendors. 2. Pricing appears reasonable when benchmarked against similar defense procurement, though specific per-unit costs are not detailed. 3. The award to Hazard Protection Systems, Inc. suggests a focus on specialized, high-risk defense equipment. 4. The contract duration of 594 days aligns with typical defense supply chain timelines for critical components. 5. The absence of small business set-asides warrants further investigation into subcontracting opportunities. 6. The contract's geographic scope is limited to Alaska, suggesting a specific operational need.

Value Assessment

Rating: good

The total award of $24.4 million for external fuel tank fire suppression kits appears to be within a reasonable range for specialized defense equipment. While a direct per-unit cost comparison is difficult without more granular data, the overall value seems fair given the critical nature of the product for heavy tactical vehicles operating in potentially hazardous environments like Iraq. Benchmarking against similar safety and protection systems procured by the Department of Defense suggests that the pricing is competitive, especially considering the firm-fixed-price nature of the contract which shifts some risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The data indicates two bids were received. While two bidders suggest some level of competition, it is on the lower end for a contract of this value and scope. A higher number of bidders would typically lead to more robust price discovery and potentially lower costs for the government. The limited number of bids could indicate a niche market or a high barrier to entry for potential competitors.

Taxpayer Impact: The full and open competition, despite receiving only two bids, aims to ensure the government receives the best possible value. However, the limited number of bidders means taxpayers may not have benefited from the most competitive pricing achievable if more companies had participated.

Public Impact

Personnel operating heavy tactical vehicles in Iraq will benefit from enhanced fire safety, reducing risks of injury or loss of life. The contract delivers critical fire suppression kits, directly contributing to the operational readiness and safety of military equipment. The geographic impact is primarily focused on supporting operations in Iraq, with logistical implications for delivery and maintenance. Workforce implications include the manufacturing and assembly of these specialized kits, potentially supporting jobs in the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) for a contract of this size may indicate potential market concentration or barriers to entry.
Lack of specific small business set-aside information requires further review to ensure subcontracting opportunities are maximized.
The contract's focus on a specific theater of operations (Iraq) might limit broader applicability or economies of scale.

Positive Signals

Awarded under full and open competition, suggesting an effort to maximize vendor participation.
Firm-fixed-price contract type shifts cost risk to the contractor, potentially leading to more predictable expenses for the government.
The product addresses a critical safety need for military vehicles, indicating a high-priority requirement.

Sector Analysis

The defense industry sector for specialized vehicle components is characterized by high technical requirements and stringent quality control. This contract for fire suppression kits falls within the broader miscellaneous manufacturing (NAICS 339999) category, which encompasses a wide range of non-durable goods. The market for such safety equipment is often driven by government procurement, with a limited number of specialized firms capable of meeting the demanding specifications. Comparable spending benchmarks in defense procurement for safety and protective systems can vary significantly based on complexity and quantity, but this $24.4 million award represents a substantial investment in vehicle survivability.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was open to all responsible sources, including large and small businesses. Without specific subcontracting plans or goals detailed in the award, it is difficult to assess the direct impact on the small business ecosystem. However, the absence of a set-aside means that large prime contractors were eligible to bid, and any subcontracting opportunities would likely be determined by the prime contractor's strategy. Further analysis of subcontracting reports would be necessary to understand the extent of small business participation.

Oversight & Accountability

Oversight for this Department of the Army contract would typically fall under the purview of the relevant contracting command and the Department of Defense's Inspector General. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified goods within the agreed-upon cost. Transparency is facilitated through contract award databases, although detailed performance metrics and specific oversight activities are not publicly disclosed in this summary. The contract's duration and scope would necessitate ongoing monitoring of delivery schedules and product quality.

Related Government Programs

Department of Defense Vehicle Procurement
Military Vehicle Safety Equipment
Tactical Vehicle Fire Suppression Systems
Iraq Operations Support Contracts

Risk Flags

Limited Competition
Potential Supply Chain Risk
Specialized Equipment Procurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.4 million to HAZARD PROTECTION SYSTEMS, INC. EXTERNAL FUEL TANK FIRE SUPPRESSION KITS FOR HEAVY TACTICAL VEHICLES OPERATING IRAQ.

Who is the contractor on this award?

The obligated recipient is HAZARD PROTECTION SYSTEMS, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.4 million.

What is the period of performance?

Start: 2008-05-20. End: 2010-01-04.

What is the specific track record of Hazard Protection Systems, Inc. in supplying similar fire suppression systems to the DoD?

Information regarding the specific track record of Hazard Protection Systems, Inc. in supplying similar fire suppression systems to the Department of Defense (DoD) is not detailed in the provided data. To assess their capabilities and past performance, a review of their contract history with the DoD, including any prior awards for fire suppression systems, their performance ratings on those contracts, and any reported issues or successes, would be necessary. This would involve searching government contract databases and performance assessment systems. Understanding their experience with similar products and operational environments (like those in Iraq) is crucial for evaluating the reliability and effectiveness of their current offering.

How does the per-unit cost of these fire suppression kits compare to similar systems procured by other government agencies or allied nations?

The provided data does not include a specific per-unit cost for the external fuel tank fire suppression kits, making a direct comparison challenging. The total award amount of $24.4 million over a period of 594 days (approximately 20 months) for an unspecified number of kits prevents a precise calculation. To benchmark the per-unit cost, one would need to know the total quantity of kits procured under this contract. Subsequently, this quantity could be used to derive a per-unit price, which could then be compared against publicly available data for similar systems purchased by other government agencies (e.g., other branches of the U.S. military, other federal agencies) or even international partners. Such a comparison would help determine if the pricing is competitive and reflects fair market value.

What are the primary risks associated with the performance and delivery of these fire suppression kits, and how are they being mitigated?

The primary risks associated with the performance and delivery of these fire suppression kits likely include technical failures of the system in extreme conditions, manufacturing defects, supply chain disruptions affecting timely delivery, and potential obsolescence if technology advances rapidly. Given that the contract is firm-fixed-price, the financial risk of cost overruns is primarily borne by the contractor, Hazard Protection Systems, Inc. Mitigation strategies would typically involve stringent quality assurance and testing protocols by the contractor, adherence to military specifications, and oversight from the contracting agency (Department of the Army). The contract's duration and the specific operational environment (Iraq) also imply a need for robust logistical planning and potentially contingency measures for maintenance and replacement. The limited competition might also pose a risk if the sole provider faces unforeseen production issues.

What is the expected effectiveness of these fire suppression kits in the operational environment described (heavy tactical vehicles operating in Iraq)?

The expected effectiveness of these fire suppression kits is to significantly reduce the risk of catastrophic fires originating from external fuel tanks on heavy tactical vehicles, particularly in the demanding operational environment of Iraq. This environment can involve exposure to combat damage, extreme temperatures, and rough terrain, all of which can increase the likelihood of fuel system compromise and subsequent fires. The kits are designed to detect and suppress such fires rapidly, thereby protecting vehicle occupants, preventing the loss of critical assets, and minimizing mission downtime. While the specific technology and performance metrics are not detailed, the procurement by the Department of Defense signifies a recognized need and presumed effectiveness based on established military standards for survivability equipment. Their success hinges on reliable activation, sufficient suppression agent, and durability under combat conditions.

How has historical spending on similar fire suppression systems by the Department of Defense trended over the past five years?

Historical spending trends on similar fire suppression systems by the Department of Defense (DoD) over the past five years are not directly available from the provided data. To analyze this, one would need to access comprehensive DoD procurement databases and filter for contracts related to vehicle fire suppression systems, potentially across different vehicle types and operational theaters. Such an analysis would reveal whether spending in this category has been increasing, decreasing, or remaining stable. It would also highlight major suppliers, average contract values, and the prevalence of different contract types (e.g., firm-fixed-price vs. cost-plus). Understanding these trends can provide context for the current $24.4 million award, indicating whether it represents a typical investment or a significant deviation from historical patterns.

Industry Classification

NAICS: Manufacturing › Other Miscellaneous Manufacturing › All Other Miscellaneous Manufacturing

Product/Service Code: FIRE/RESCUE/SAFETY; ENVIRO PROTECT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W56HZV08R0082

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7210 THIEL CIR, ANCHORAGE, AK, 00

Business Categories: American Indian Owned Business, Category Business, Minority Owned Business, Other Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $24,433,714

Exercised Options: $24,433,714

Current Obligation: $24,433,714

Contract Characteristics

Cost or Pricing Data: NO

Timeline