DoD awards $543M for UH-1Y and AH-1Z aircraft components, with Bell Textron Inc. as the sole provider

Contract Overview

Contract Amount: $542,850,813 ($542.9M)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 2012-02-13

End Date: 2017-05-31

Contract Duration: 1,934 days

Daily Burn Rate: $280.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LOT 10 UH-1Y AND AH-1Z AAC CONTRACT FOR LONG LEAD AAC

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76118

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $542.9 million to BELL TEXTRON INC for work described as: LOT 10 UH-1Y AND AH-1Z AAC CONTRACT FOR LONG LEAD AAC Key points: 1. This contract represents a significant investment in critical aviation components for the U.S. military. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited market alternatives. 3. Long lead-time components suggest a strategic, forward-looking procurement approach to ensure future aircraft availability. 4. The firm-fixed-price contract type aims to transfer cost risk to the contractor, but oversight is still crucial. 5. Performance duration of over 5 years indicates a substantial, long-term commitment to this specific aircraft fleet. 6. The absence of small business participation raises questions about broader economic impact and subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and focus on long-lead components for specific military aircraft. Without competitive bids, it's difficult to definitively assess if the $543 million represents optimal value for money. However, the firm-fixed-price structure suggests an attempt to control costs. The contract's duration and the specialized nature of the components imply a necessary, albeit potentially expensive, investment for maintaining fleet readiness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Bell Textron Inc., was solicited. This approach is typically used when a unique product or service is required, or when only one responsible source is available. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may be paying a premium for these aircraft components due to the absence of competitive pressure. The government did not benefit from the cost-saving mechanisms that typically arise from multiple bidders vying for a contract.

Public Impact

The primary beneficiaries are the U.S. military branches operating the UH-1Y and AH-1Z helicopters, ensuring continued operational capability. This contract delivers essential long-lead time components necessary for the manufacturing and sustainment of these vital aircraft. The geographic impact is national, supporting defense readiness across various military installations. Workforce implications are concentrated within Bell Textron Inc. and its supply chain, primarily in Texas where the contractor is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of small business set-aside or reported subcontracting may limit broader economic participation.
Long lead-time components could indicate potential supply chain vulnerabilities if not managed effectively.
The firm-fixed-price contract, while shifting risk, requires robust government oversight to ensure quality and adherence to specifications.

Positive Signals

Firm-fixed-price contract type aims to provide cost certainty and transfer risk to the contractor.
Awarding long-lead components ensures future availability of critical aircraft parts, supporting long-term defense strategy.
The contractor, Bell Textron Inc., has a long history and established expertise in manufacturing these specific helicopter types.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft components. The market for specialized military helicopter parts is often concentrated among a few key manufacturers due to high barriers to entry, including technical expertise, intellectual property, and established relationships with defense agencies. Spending in this sub-sector is driven by military modernization programs and sustainment efforts for existing fleets.

Small Business Impact

This contract was not competed and did not include specific small business set-asides. Bell Textron Inc. is a large business, and there is no explicit indication of subcontracting plans for small businesses within the provided data. This suggests limited direct opportunities for small businesses through this specific award, potentially missing out on the economic benefits and innovation that small business participation can bring to the defense industrial base.

Oversight & Accountability

The contract is a firm-fixed-price definitive contract, which inherently places cost control responsibility on the contractor. Oversight would typically involve the Defense Contract Management Agency (DCMA) ensuring adherence to contract terms, quality standards, and delivery schedules. Transparency is limited by the sole-source nature, but contract awards are generally reported in federal databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Manufacturing
Helicopter Procurement
Defense Logistics
Military Aviation Sustainment

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $542.9 million to BELL TEXTRON INC. LOT 10 UH-1Y AND AH-1Z AAC CONTRACT FOR LONG LEAD AAC

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 $542.9 million.

What is the period of performance?

Start: 2012-02-13. End: 2017-05-31.

What is the historical spending trend for UH-1Y and AH-1Z components from Bell Textron Inc.?

Analyzing historical spending requires access to detailed contract databases beyond the provided snippet. However, given the sole-source nature and the long-lead component requirement, it's probable that Bell Textron Inc. has been the primary, if not sole, supplier for these specific parts for an extended period. Past awards would likely reflect similar contract values and durations, adjusted for inflation and program evolution. Without specific historical data, it's difficult to establish a precise trend, but the continuity of the platform suggests consistent, significant investment over time. Future spending will depend on the operational life and modernization plans for the UH-1Y and AH-1Z fleets.

How does the pricing of this contract compare to similar sole-source awards for specialized aircraft components?

Direct comparison of pricing for sole-source contracts is inherently difficult without access to proprietary cost data or detailed market analyses conducted by the government. However, sole-source awards are generally expected to be higher than competitively bid contracts due to the lack of price pressure. To assess value, the government would typically rely on independent cost estimates, historical pricing for similar components, and benchmarking against other sole-source procurements for comparable complexity and risk. The $543 million award for long-lead components over approximately five years suggests a substantial per-unit cost, but its reasonableness can only be determined through detailed government cost analysis or comparison with very similar, sole-sourced, long-lead procurements for other high-value military platforms.

What are the primary risks associated with a sole-source contract for critical aircraft components?

The primary risks associated with this sole-source contract include potential cost overruns due to the absence of competitive bidding, which can lead to inflated prices. There's also a risk of reduced innovation and efficiency, as the contractor faces less pressure to optimize processes or develop cost-saving alternatives. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; any disruption at Bell Textron Inc. could significantly impact the availability of critical aircraft components. Finally, the government may have less leverage in negotiating terms and conditions compared to a competitive scenario.

What is the expected impact of this contract on the operational readiness of the UH-1Y and AH-1Z fleets?

This contract is crucial for maintaining and enhancing the operational readiness of the UH-1Y and AH-1Z helicopter fleets. By securing long-lead time components, the Department of Defense ensures a steady supply of necessary parts for both new production (if applicable) and sustainment activities, including maintenance, repair, and overhaul. This proactive procurement strategy mitigates the risk of component shortages that could ground aircraft or delay critical missions. The timely delivery of these components directly supports the warfighter's ability to deploy and operate effectively, fulfilling the core purpose of these aviation assets.

Are there any alternative aircraft platforms that could fulfill similar roles, and how does this contract relate to those alternatives?

The UH-1Y (Venom) and AH-1Z (Viper) are highly specialized attack and utility helicopters developed by Bell Textron Inc., often serving unique roles within the Marine Corps and other branches. While other utility helicopters exist (e.g., Black Hawk variants) and other attack helicopters are in service (e.g., Apache), the UH-1Y and AH-1Z are part of a specific integrated platform strategy. This contract focuses on sustaining these particular platforms, implying that direct substitution by alternative platforms is either not feasible, not cost-effective, or would require significant strategic shifts and further investment in new aircraft and training. Therefore, this contract is less about choosing between platforms and more about ensuring the continued viability of the chosen ones.

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

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: $569,029,923

Exercised Options: $569,029,923

Current Obligation: $542,850,813

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $238,488

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline