Over $151 million awarded for CV-22 Block 20 NRE development and test, a sole-source contract

Contract Overview

Contract Amount: $151,681,655 ($151.7M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2007-12-21

End Date: 2018-09-30

Contract Duration: 3,936 days

Daily Burn Rate: $38.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CV-22 BLOCK 20 NRE DEVELOPMENT AND TEST

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $151.7 million to BELL BOEING JOINT PROJECT OFFICE for work described as: CV-22 BLOCK 20 NRE DEVELOPMENT AND TEST Key points: 1. Contract awarded for non-recurring engineering (NRE) development and testing, indicating investment in future capabilities. 2. The contract's duration of over 10 years suggests a long-term commitment to the CV-22 program. 3. Awarded to Bell Boeing Joint Project Office, a known entity in aircraft manufacturing. 4. The sole-source nature of this award warrants scrutiny regarding potential cost efficiencies and market alternatives. 5. Performance context is tied to the specialized needs of the CV-22 Osprey tiltrotor aircraft. 6. Sector positioning is firmly within advanced aerospace and defense manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and focus on NRE. Without competitive bids, it's difficult to assess if the pricing reflects fair market value or if alternative solutions could have been more cost-effective. The extensive duration also raises questions about long-term cost control and potential for cost overruns. Further analysis would require access to detailed cost breakdowns and comparisons with similar NRE contracts in the aerospace sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or intellectual property essential for the requirement. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed contract. It also raises questions about whether alternative solutions were adequately explored.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. The government's ability to negotiate the best possible price is diminished in a sole-source scenario.

Public Impact

The primary beneficiaries are the U.S. Special Operations Command (SOCOM) and the U.S. Air Force, who operate the CV-22 aircraft. Services delivered include critical development and testing for future upgrades and modifications to the CV-22 fleet. The geographic impact is primarily centered around the contractor's facilities in Texas, where the aircraft manufacturing and development occur. Workforce implications include sustained employment for highly skilled engineers, technicians, and manufacturing personnel within the aerospace industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Long contract duration increases risk of cost escalation and scope creep.
Lack of transparency in sole-source negotiations makes value assessment difficult.
Focus on NRE development may not directly translate to immediate operational improvements.

Positive Signals

Supports critical upgrades for a key special operations aircraft.
Invests in advanced aerospace technology and manufacturing capabilities.
Ensures continued development and testing expertise for the CV-22 program.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Contracts for specialized aircraft like the CV-22 often involve complex systems integration and require unique manufacturing expertise. Spending in this area is driven by national security requirements and technological advancement. Comparable spending benchmarks would typically involve other major defense aircraft development programs, which often run into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting opportunities for small businesses. Given the nature of advanced aircraft manufacturing and development, the prime contractor likely possesses specialized capabilities, which may limit the direct involvement of small businesses in the core NRE activities. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would likely fall under the Defense Contract Management Agency (DCMA) and potentially the Defense Contract Audit Agency (DCAA) for financial audits. The Bell Boeing Joint Project Office structure itself implies a level of joint oversight. Transparency is limited due to the sole-source nature, but contract modifications, performance reports, and financial reviews would be key accountability measures. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

CV-22 Osprey Program
Special Operations Aviation
Tiltrotor Aircraft Development
Aerospace NRE Contracts
Defense Aircraft Manufacturing

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $151.7 million to BELL BOEING JOINT PROJECT OFFICE. CV-22 BLOCK 20 NRE DEVELOPMENT AND TEST

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $151.7 million.

What is the period of performance?

Start: 2007-12-21. End: 2018-09-30.

What is the historical spending trend for CV-22 Block 20 NRE development and test?

The provided data reflects a single award of $151,681,655.26 for the CV-22 Block 20 NRE Development and Test, spanning from December 21, 2007, to September 30, 2018. This suggests that this specific contract represents a significant, albeit singular, investment in this particular phase of development and testing for the CV-22 program. Without additional contract awards or data points for this specific block or related NRE efforts, it is difficult to establish a broader historical spending trend. However, the substantial value indicates a commitment to advancing the capabilities of the CV-22 platform through dedicated research, development, and testing activities.

How does the cost of this contract compare to similar NRE contracts in the aerospace industry?

Directly comparing the cost of this $151.7 million contract for CV-22 Block 20 NRE development and test to similar contracts is challenging without more specific information on the scope and complexity of those comparable contracts. NRE contracts can vary widely in their objectives, from initial concept development to advanced system integration and testing. The CV-22 is a unique tiltrotor aircraft, and its development costs are likely higher than for conventional aircraft due to its complexity. However, for major defense aircraft programs, NRE costs can easily run into hundreds of millions or even billions of dollars. This contract's value appears substantial for a specific block of NRE, but its relative cost-effectiveness can only be truly assessed against other specialized military aircraft development efforts.

What are the key risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competitive bidding. Without market pressure, the contractor may not be incentivized to offer the most competitive pricing. Another significant risk is the potential for scope creep, where the project's objectives expand beyond the original intent, leading to cost overruns and schedule delays. Furthermore, the government's reliance on a single source can create dependency and limit flexibility if performance issues arise or if alternative technologies emerge. The long duration of the contract also increases the risk of cost escalation over time due to inflation and changing market conditions.

What is the track record of Bell Boeing Joint Project Office in delivering on similar defense contracts?

Bell Boeing Joint Project Office, a partnership between Bell Helicopter (Textron) and Boeing, has a significant track record in the development and production of the V-22 Osprey program, which includes the CV-22 variant. They have been responsible for the design, manufacturing, and sustainment of these complex tiltrotor aircraft for many years. While the V-22 program has faced its share of developmental challenges and scrutiny in the past, the Bell Boeing team has ultimately delivered a capable platform that is now a critical asset for U.S. Special Operations Command and the U.S. Air Force. Their experience in managing large-scale, technologically advanced defense programs suggests a capacity to handle the NRE development and testing requirements outlined in this contract.

How does this contract contribute to the overall effectiveness of the CV-22 program?

This contract for CV-22 Block 20 NRE development and test is crucial for the ongoing modernization and enhancement of the CV-22 fleet. NRE (Non-Recurring Engineering) activities are foundational for introducing new capabilities, improving existing systems, and addressing obsolescence. By investing in this development and testing, the government aims to ensure that the CV-22 remains a relevant and effective platform for special operations missions, capable of meeting evolving threats and operational requirements. Successful completion of this NRE phase is expected to lead to upgrades or modifications that will improve the aircraft's performance, survivability, or mission effectiveness, thereby directly contributing to the overall operational readiness and capability of the CV-22 program.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft 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: N0001907R0047

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 401 TILTROTOR DR, AMARILLO, TX, 79111

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $163,788,823

Exercised Options: $163,788,823

Current Obligation: $151,681,655

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline