DoD's V-22 Osprey program faces ongoing risk reduction efforts with over $13 million in contract spending

Contract Overview

Contract Amount: $13,115,398 ($13.1M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2008-06-09

End Date: 2009-09-25

Contract Duration: 473 days

Daily Burn Rate: $27.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: V-22 MSU RISK REDUCTION

Place of Performance

Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $13.1 million to BELL BOEING JOINT PROJECT OFFICE for work described as: V-22 MSU RISK REDUCTION Key points: 1. Contract focuses on mitigating risks associated with the V-22 Osprey aircraft. 2. Spending is concentrated on technical and operational improvements for a complex platform. 3. The 'Cost Plus Fixed Fee' structure suggests potential for cost overruns if not managed carefully. 4. Limited competition indicates a specialized need, potentially impacting price competitiveness. 5. The contract duration of 473 days suggests a focused, short-term effort on specific risk areas. 6. This spending is part of a larger, ongoing investment in the V-22 program's sustainment and modernization.

Value Assessment

Rating: fair

Benchmarking the value of this specific risk reduction contract is challenging without comparable data for similar V-22 specific risk mitigation efforts. The 'Cost Plus Fixed Fee' (CPFF) contract type, while common for R&D and complex projects, can lead to higher costs if the fixed fee is not adequately calibrated against the effort required. The total obligation of $13.1 million for a 473-day period suggests a significant investment in addressing identified risks, but a direct comparison to market rates for similar risk reduction services is not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This is often the case for specialized technical services or modifications where only one entity possesses the necessary expertise or intellectual property, such as the original manufacturer or a highly specialized team. The lack of competition means that pricing was likely negotiated directly with the contractor, potentially foregoing the benefits of competitive bidding in driving down costs.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from price reductions that might have resulted from a competitive bidding process. The government relied on negotiation to secure a fair price.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who operate the V-22 Osprey. Services delivered aim to enhance the safety, reliability, and operational effectiveness of the V-22 fleet. The geographic impact is primarily within the operational theaters where the V-22 is deployed. Workforce implications include specialized engineering and technical roles required for risk reduction activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure carries inherent risk of cost escalation if not tightly managed.
Sole-source award limits price discovery and potential savings from competition.
Focus on risk reduction implies underlying issues with the platform that require ongoing investment.

Positive Signals

Contract addresses critical risk reduction for a key military asset.
Investment in V-22 sustainment indicates commitment to the platform's long-term viability.
Specialized nature of the work suggests a focused effort on critical technical challenges.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The V-22 Osprey is a unique tiltrotor aircraft, and contracts related to its sustainment and risk reduction are highly specialized. The market for such services is limited to a few prime contractors with deep knowledge of the platform. Comparable spending benchmarks would likely be within the broader category of military aircraft sustainment and upgrade programs, which represent significant, long-term investments.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by 'sb': false. The nature of V-22 specific risk reduction work typically requires specialized expertise held by the prime contractor or its direct partners. There is no explicit information regarding subcontracting plans to small businesses within this data, suggesting that the primary focus is on the core capabilities of the awarded entity.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's established procurement and contract management regulations. Given the 'Cost Plus Fixed Fee' structure and sole-source nature, rigorous oversight would be expected to monitor costs, ensure adherence to the scope of work, and validate the necessity and effectiveness of the risk reduction measures. The Inspector General's office for the Department of Defense would have jurisdiction over any investigations into fraud, waste, or abuse.

Related Government Programs

V-22 Osprey Program
Department of the Navy Aircraft Procurement
Defense Contract Management Agency (DCMA) Oversight
Aerospace Engineering Services Contracts

Risk Flags

Sole-source award limits competitive pricing.
CPFF contract type requires diligent cost oversight.
Ongoing risk reduction suggests potential for recurring costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.1 million to BELL BOEING JOINT PROJECT OFFICE. V-22 MSU RISK REDUCTION

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 $13.1 million.

What is the period of performance?

Start: 2008-06-09. End: 2009-09-25.

What specific risks are being addressed by this $13.1 million contract for the V-22 Osprey?

The provided data abbreviates the contract title as 'V-22 MSU RISK REDUCTION,' indicating the core purpose is to mitigate identified risks associated with the V-22 Osprey aircraft. While the specific technical or operational risks are not detailed in the summary data, such contracts typically address issues related to flight safety, component reliability, operational performance under various conditions, or sustainment challenges. These could range from material fatigue in specific components to software glitches or aerodynamic performance limitations. The 'MSU' likely refers to a specific variant or mission system requiring attention. Further analysis would require access to the contract's statement of work.

How does the 'Cost Plus Fixed Fee' (CPFF) structure impact the potential cost and value for money in this contract?

The 'Cost Plus Fixed Fee' (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves research and development, making it difficult to estimate costs accurately upfront. For value for money, CPFF can be a concern because the contractor has less incentive to control costs once the contract is awarded, as their profit (the fixed fee) remains constant regardless of the final cost. Effective oversight is crucial to ensure costs are reasonable and allowable, and that the fixed fee adequately compensates the contractor for the effort without being excessive.

What are the implications of this contract being awarded on a sole-source basis?

A sole-source award, as indicated by 'CT: NOT COMPETED', means the contract was awarded to a single contractor without a competitive bidding process. This typically occurs when only one source is capable of meeting the government's requirements due to specialized expertise, proprietary technology, or unique capabilities. For taxpayers, the primary implication is the potential absence of cost savings that competition usually drives. The government relies heavily on negotiation skills and market research to ensure a fair price is achieved. In this case, Bell Boeing Joint Project Office was likely the only entity with the specific knowledge and authorization to perform the V-22 risk reduction tasks.

What is the historical spending context for V-22 Osprey risk reduction or related activities?

The provided data only details a single contract obligation of $13.1 million. However, the V-22 Osprey program itself has a long history of significant government investment, spanning development, procurement, and sustainment. Risk reduction and system upgrades are ongoing necessities for complex military platforms. Historical spending on the V-22 program, across all its phases and variants (e.g., CV-22 for Air Force Special Operations Command, MV-22 for the Marine Corps), amounts to billions of dollars. This $13.1 million contract represents a specific, albeit substantial, allocation within that broader, continuous investment in managing the platform's lifecycle risks and ensuring its operational readiness.

What is the significance of the contract duration (473 days) in relation to the contract value?

The contract duration of 473 days (approximately 15.5 months) for a value of $13.1 million suggests a focused, medium-term effort. This duration implies that the risk reduction activities were planned as a distinct project phase rather than an immediate, short-term fix or a long-term sustainment contract. The daily burn rate, roughly $27,700 per day ($13.1M / 473 days), indicates a significant resource commitment. This timeframe allows for detailed analysis, development of solutions, testing, and implementation of risk mitigation strategies for the V-22 Osprey.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001908R0039

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $13,269,503

Exercised Options: $13,269,503

Current Obligation: $13,115,398

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline