DoD awards $474M for long-lead aircraft parts to Bell Textron, a sole-source contract

Contract Overview

Contract Amount: $474,464,373 ($474.5M)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 2011-03-14

End Date: 2016-04-30

Contract Duration: 1,874 days

Daily Burn Rate: $253.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LOT 9 UH-1Y AND AH-1Z AAC CONTRACT FOR LONG-LEAD ITEMS.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76118

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $474.5 million to BELL TEXTRON INC for work described as: LOT 9 UH-1Y AND AH-1Z AAC CONTRACT FOR LONG-LEAD ITEMS. Key points: 1. Contract awarded for long-lead items for UH-1Y and AH-1Z aircraft. 2. Sole-source award to Bell Textron Inc. raises questions about competition. 3. Significant value of $474.5 million for critical aircraft components. 4. Contract duration of 1874 days indicates a long-term supply need. 5. Firm Fixed Price contract type shifts cost risk to the government. 6. No small business set-aside noted, potentially limiting small business participation.

Value Assessment

Rating: questionable

The contract value of $474.5 million for long-lead items is substantial. Without comparable sole-source contracts for similar long-lead components, a direct value-for-money assessment is difficult. However, the absence of competition inherently limits the government's ability to secure the best possible pricing. The firm-fixed-price nature means the government bears the risk of cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Bell Textron Inc., was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they typically result in higher prices and reduced innovation compared to fully competed contracts.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the most cost-effective solution, as the lack of competition prevents price discovery and potential savings.

Public Impact

The primary beneficiaries are the U.S. Marine Corps, which utilizes the UH-1Y and AH-1Z helicopters. The contract ensures the continued production and readiness of these critical rotary-wing aircraft. The contract supports advanced manufacturing capabilities within the aerospace sector. Work is likely concentrated in Texas, where Bell Textron has significant operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Firm-fixed-price contract places cost overrun risk on the government.
Lack of small business participation may limit opportunities for smaller firms.

Positive Signals

Ensures availability of long-lead items for critical military aircraft.
Supports a key defense contractor and associated manufacturing base.
Contract provides a defined period for supply chain stability.

Sector Analysis

This contract falls within the Aircraft Manufacturing subsector (NAICS 336411). The broader aerospace and defense industry is characterized by high R&D investment, complex supply chains, and significant government procurement. Long-lead items are crucial for maintaining production schedules for complex platforms like helicopters, and their procurement often involves specialized suppliers. The total U.S. aerospace product and parts manufacturing industry revenue is in the hundreds of billions, with defense contracts forming a substantial portion.

Small Business Impact

The contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this significant contract are likely limited to direct supplier relationships with Bell Textron, rather than direct contract awards. This could reduce the flow-down of contract value to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The firm-fixed-price nature implies less direct oversight on cost, but performance monitoring remains critical. Transparency is limited due to the sole-source nature, and specific Inspector General (IG) reports related to this particular contract would need to be searched for detailed accountability assessments.

Related Government Programs

UH-1Y Venom Program
AH-1Z Viper Program
DoD Aircraft Procurement
Long-Lead Time Material Contracts

Risk Flags

Sole-source award
Lack of competition
Firm-fixed-price risk to government

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $474.5 million to BELL TEXTRON INC. LOT 9 UH-1Y AND AH-1Z AAC CONTRACT FOR LONG-LEAD ITEMS.

Who is the contractor on this award?

The obligated recipient is BELL TEXTRON INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $474.5 million.

What is the period of performance?

Start: 2011-03-14. End: 2016-04-30.

What is the historical spending pattern for long-lead items for the UH-1Y and AH-1Z programs with Bell Textron?

Analyzing historical spending for long-lead items for the UH-1Y and AH-1Z programs with Bell Textron requires access to detailed contract databases beyond the provided summary. However, given the nature of these aircraft and the typical lifecycle of defense platforms, it's probable that similar contracts for long-lead components have been awarded in the past to ensure production continuity. The current $474.5 million award suggests a significant, ongoing need for these specialized parts. Without specific historical data, it's difficult to determine if this award represents an increase, decrease, or stable level of spending compared to previous periods. Factors influencing historical spending would include production rates, upgrade cycles, and the availability of alternative suppliers.

How does the per-unit cost of these long-lead items compare to industry benchmarks or similar government contracts?

Determining a precise per-unit cost benchmark for these long-lead items is challenging without specific unit quantities and detailed cost breakdowns, which are not provided in the summary data. Long-lead items are often unique, custom-manufactured components essential for the assembly of complex systems like helicopters, making direct comparisons difficult. Furthermore, as this is a sole-source contract, there is no competitive bidding data to establish a market-driven price. To assess value, one would need to compare the negotiated prices against internal cost estimates, historical pricing for similar components (if available), or potentially against prices for components on similar aircraft programs, acknowledging the inherent limitations due to the specialized nature and lack of competition.

What are the specific risks associated with a sole-source award for critical aircraft components?

A sole-source award for critical aircraft components like long-lead items carries several significant risks. Firstly, the lack of competition can lead to inflated pricing, as the contractor faces no pressure to offer the most competitive bid. This means taxpayers may be overpaying for these essential parts. Secondly, it reduces the incentive for the contractor to innovate or improve efficiency, as they have a guaranteed contract. Thirdly, it creates a dependency on a single supplier, which can be problematic if that supplier experiences production issues, financial instability, or decides to discontinue the product line. This dependency can also hinder the government's ability to pivot to alternative solutions or suppliers if needed, potentially impacting aircraft readiness and program continuity.

What is the track record of Bell Textron Inc. in delivering long-lead items for military aircraft programs?

Bell Textron Inc. has a long and established track record in the aerospace industry, particularly in the development and production of military helicopters. They are the original equipment manufacturer (OEM) for the UH-1Y Venom and AH-1Z Viper, which are key platforms for the U.S. Marine Corps. Their history includes delivering numerous aircraft and associated components over decades. While specific performance metrics for this particular long-lead item contract are not detailed here, Bell Textron's overall experience as an OEM suggests a deep understanding of the technical requirements and production processes for these helicopters. However, like any large defense contractor, they may have faced past performance issues on other contracts, which would require a separate, detailed review.

How does this contract's value compare to overall Department of Defense spending on aircraft manufacturing?

The $474.5 million awarded for long-lead items represents a specific segment of the Department of Defense's (DoD) overall spending on aircraft manufacturing. The DoD's annual budget is in the hundreds of billions of dollars, with aircraft procurement and sustainment being a significant component. While $474.5 million is a substantial sum for a single contract, it is a fraction of the total DoD aircraft budget, which includes new aircraft purchases, upgrades, maintenance, and associated parts across all branches. This contract specifically addresses the initial, time-sensitive components needed to maintain production flow for the UH-1Y and AH-1Z, rather than the full cost of the aircraft or broader sustainment efforts.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 3255 BELL FLIGHT BLVD, FORT WORTH, TX, 76118

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $474,572,918

Exercised Options: $474,514,265

Current Obligation: $474,464,373

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $1,672,159

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline