Naval Aviation Requirement contract awarded to Bell Boeing JPO for over $477 million

Contract Overview

Contract Amount: $477,698,062 ($477.7M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2012-10-04

End Date: 2016-12-31

Contract Duration: 1,549 days

Daily Burn Rate: $308.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAVAL AVIATION REQUIREMENT

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $477.7 million to BELL BOEING JOINT PROJECT OFFICE for work described as: NAVAL AVIATION REQUIREMENT Key points: 1. Contract value exceeds $477 million, indicating a significant investment in naval aviation. 2. Awarded to a joint project office, suggesting a specialized and potentially sole-source arrangement. 3. The contract spans over four years, implying a long-term need for these aviation components. 4. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code suggests a focus on specialized components rather than complete aircraft. 5. The firm-fixed-price contract type aims to provide cost certainty for the government. 6. The absence of small business set-asides or subcontracting requirements may limit broader economic participation.

Value Assessment

Rating: fair

The total award of over $477 million for naval aviation requirements is substantial. Without specific benchmarks for comparable contracts or detailed cost breakdowns, assessing value for money is challenging. The firm-fixed-price structure offers some cost control, but the lack of competition raises concerns about potential overpricing. Further analysis would require comparing unit costs for specific parts against market rates or similar government procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the requirement. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Navy's aviation programs, ensuring the availability of critical components. Services delivered include the manufacturing and supply of other aircraft parts and auxiliary equipment. The contract is based in Texas, suggesting a concentration of economic activity and potential workforce impact in that state. The contract supports specialized manufacturing capabilities within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Limited transparency into the pricing structure due to sole-source award.
Potential for vendor lock-in if alternative solutions are not explored.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Award to a specialized joint project office suggests expertise in meeting specific naval aviation needs.
Long contract duration indicates a stable supply chain for critical components.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, specialized manufacturing processes, and significant government investment. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category, which supports the broader defense industrial base. Spending in this area is crucial for maintaining military readiness and technological superiority. Comparable spending benchmarks are difficult to establish without more granular data on the specific parts procured.

Small Business Impact

This contract does not appear to have included small business set-asides, nor is there an indication of subcontracting requirements for small businesses. This suggests that the primary contractor, Bell Boeing Joint Project Office, is expected to fulfill the requirement directly. Consequently, the direct impact on the small business ecosystem for this specific award is likely minimal, with opportunities for small businesses potentially limited to their existing roles within the prime contractor's supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny on pricing and justification would be paramount. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Aviation Maintenance
Aircraft Parts Manufacturing
Defense Procurement
Aerospace Components

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns without competitive pressure.
Limited transparency into pricing justification.
Dependence on a single supplier for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $477.7 million to BELL BOEING JOINT PROJECT OFFICE. NAVAL AVIATION REQUIREMENT

Who is the contractor on this award?

The obligated recipient is BELL BOEING JOINT PROJECT OFFICE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $477.7 million.

What is the period of performance?

Start: 2012-10-04. End: 2016-12-31.

What specific naval aviation requirements does this contract address?

This contract, valued at over $477 million, addresses the 'NAVAL AVIATION REQUIREMENT' and falls under the NAICS code '336413 - Other Aircraft Parts and Auxiliary Equipment Manufacturing.' While the specific parts or equipment are not detailed in the provided data, this classification indicates the contract is for components and auxiliary systems essential for the operation and maintenance of naval aircraft, rather than complete aircraft systems. These could range from specialized engine components, avionics parts, structural elements, or other critical support equipment necessary for the Navy's air fleet.

What is the justification for this contract being sole-source?

The provided data indicates the contract was 'NOT COMPETED,' classifying it as sole-source. Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. This could be due to unique proprietary technology, specialized manufacturing capabilities held exclusively by the contractor (Bell Boeing Joint Project Office in this case), or specific urgent requirements where a competitive process would be impractical or detrimental to national security. A formal justification document would normally be required by the government to support such an award.

How does the firm-fixed-price contract type benefit the government?

A firm-fixed-price (FFP) contract type is generally advantageous for the government as it establishes a ceiling price that is not subject to adjustment based on the contractor's cost experience. This provides maximum price certainty and transfers most of the cost risk to the contractor. For the government, this means predictable budgeting and protection against cost overruns, assuming the initial price negotiated is fair and reasonable. The contractor is incentivized to control costs to maximize profit.

What is the historical spending pattern for this type of naval aviation requirement?

The provided data only includes details for this specific contract award of $477,698,061.91 from October 4, 2012, to December 31, 2016. To understand historical spending patterns, one would need to analyze prior contracts for similar naval aviation requirements, potentially under different contract vehicles or with different awardees. Analyzing trends in award values, contract types, and competition levels over time would reveal whether spending has increased or decreased, and if the approach to procurement has evolved.

What are the potential risks associated with a sole-source award of this magnitude?

A sole-source award of over $477 million carries several risks. Primarily, the lack of competition can lead to inflated prices, as the government does not benefit from market-driven price discovery. There's also a risk of reduced innovation and efficiency, as the contractor may face less pressure to improve processes or offer cost-saving alternatives. Furthermore, dependence on a single supplier can create vulnerabilities in the supply chain, especially if the contractor faces financial difficulties or production issues. Ensuring robust oversight and fair pricing negotiation becomes critical in mitigating these risks.

What is the significance of the Bell Boeing Joint Project Office as the awardee?

The Bell Boeing Joint Project Office (JPO) is a significant entity, representing a collaboration between two major aerospace manufacturers, Bell Helicopter (a Textron company) and Boeing. This JPO is known for developing and supporting specific military aircraft programs, most notably the V-22 Osprey tiltrotor aircraft. Awarding a contract to a JPO often implies a highly specialized requirement that these specific entities are uniquely positioned to fulfill, often due to extensive prior development, unique intellectual property, or established production lines for complex military systems.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 401 TILTROTOR DR PLANT A, AMARILLO, TX, 79111

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership

Financial Breakdown

Contract Ceiling: $477,698,062

Exercised Options: $477,698,062

Current Obligation: $477,698,062

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001909D0008

IDV Type: IDC

Timeline