DoD's $58M MV-22 Retrofit Kits Contract Awarded to Bell Boeing Without Competition

Contract Overview

Contract Amount: $57,954,802 ($58.0M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2012-06-28

End Date: 2016-06-30

Contract Duration: 1,463 days

Daily Burn Rate: $39.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RETROFIT KITS MV-22

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $58.0 million to BELL BOEING JOINT PROJECT OFFICE for work described as: RETROFIT KITS MV-22 Key points: 1. Contract awarded for aircraft manufacturing components, indicating a need for specialized parts. 2. The sole-source nature of the award raises questions about potential price inflation and lack of market pressure. 3. A long contract duration suggests a sustained need for these retrofit kits. 4. The contract's value, while significant, needs to be benchmarked against similar aircraft modification efforts. 5. The absence of competition limits transparency and potentially reduces value for taxpayer dollars. 6. Focus on a specific aircraft model (MV-22) highlights a niche but critical defense requirement.

Value Assessment

Rating: questionable

The contract value of $57.95 million for MV-22 retrofit kits is substantial. Without competitive bidding, it is difficult to assess if this represents fair market value. Benchmarking against similar aircraft modification contracts or comparing the per-unit cost of these kits to industry standards would be necessary for a thorough value assessment. The lack of competition inherently introduces a risk of overpayment.

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 Boeing Joint Project Office, was considered. This typically occurs when a specific capability or technology is unique to a single provider, or in cases of urgent need where competition is not feasible. The lack of multiple bidders means there was no opportunity for price discovery through a competitive process, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding, potentially resulting in a less efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who operate the MV-22 Osprey aircraft. The contract delivers essential retrofit kits to maintain and upgrade the operational readiness of the MV-22 fleet. The geographic impact is likely concentrated where MV-22 squadrons are based and maintained, primarily within the United States. The contract supports specialized manufacturing jobs within the aerospace sector, particularly at Bell Boeing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for cost overruns if pricing is not rigorously scrutinized without market benchmarks.

Positive Signals

Addresses a critical need for maintaining and upgrading a key military aircraft (MV-22).
Awarded to a known entity (Bell Boeing) with established experience in MV-22 production.
Contract ensures continued operational capability for a vital defense asset.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Contracts for specialized aircraft components like retrofit kits are common. The market for such components is often dominated by a few large prime contractors and their established partners, like Bell Boeing. This contract fits within the broader category of aircraft manufacturing and sustainment, a critical segment of the defense industrial base.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) flag is also false. This suggests that small businesses are unlikely to be directly involved as prime contractors or through mandated subcontracting opportunities on this specific award. The primary contractor, Bell Boeing, is a joint venture of large corporations, implying that any small business involvement would be through their independent supply chain decisions.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's contracting and financial management regulations. The Department of the Navy, as the procuring agency, would be responsible for monitoring performance and ensuring compliance with contract terms. Given the sole-source nature, enhanced scrutiny on pricing and justification would be expected. Inspector General oversight may be triggered by specific allegations of fraud, waste, or abuse, but routine oversight would be contract administration.

Related Government Programs

MV-22 Osprey Sustainment Programs
Department of Defense Aircraft Component Procurement
Aerospace Manufacturing Contracts
Military Aircraft Upgrade Programs

Risk Flags

Sole-source award lacks competitive justification.
Potential for uncompetitive pricing.
Limited transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.0 million to BELL BOEING JOINT PROJECT OFFICE. RETROFIT KITS MV-22

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 $58.0 million.

What is the period of performance?

Start: 2012-06-28. End: 2016-06-30.

What is the specific nature of the 'retrofit kits' for the MV-22, and why were they deemed necessary?

The 'retrofit kits' for the MV-22 likely refer to upgrade packages or modifications designed to enhance the aircraft's performance, safety, or operational capabilities. The MV-22 Osprey is a tiltrotor aircraft used for troop transport, cargo, and special operations. Over time, aircraft require upgrades to incorporate new technologies, address obsolescence, improve fuel efficiency, or meet evolving mission requirements. The necessity for these specific kits would stem from a formal analysis by the Department of the Navy or Marine Corps identifying deficiencies or opportunities for improvement in the existing MV-22 fleet. These could range from avionics upgrades to structural enhancements or new mission system integration.

What are the implications of awarding a sole-source contract for aircraft manufacturing components?

Awarding a sole-source contract, as in this case for the MV-22 retrofit kits, means that the government did not solicit bids from multiple suppliers. This typically happens when only one company possesses the unique technology, intellectual property, or capability required, or in urgent situations. The primary implication for the government and taxpayers is the potential loss of cost savings that competitive bidding usually generates. Without competing offers, there is less pressure on the contractor to offer the lowest possible price. It also reduces transparency in the procurement process and can limit opportunities for innovation from other potential suppliers. For the contractor, it guarantees the business but may also come with increased scrutiny on pricing and performance.

How does the contract duration (1463 days) compare to typical aircraft component supply contracts?

A contract duration of 1463 days, approximately four years, is relatively long for the supply of specific components like retrofit kits. Typical supply contracts for individual parts might be shorter, perhaps one to two years, or be structured as indefinite-delivery/indefinite-quantity (IDIQ) contracts with calls placed over a longer period. However, for comprehensive retrofit kits that involve design, manufacturing, and integration, a multi-year duration is not uncommon, especially if it aligns with a planned fleet modernization schedule. This extended period suggests a sustained need for these upgrades across a significant portion of the MV-22 fleet and implies a complex manufacturing and delivery process.

What is the track record of Bell Boeing Joint Project Office in delivering MV-22 components?

Bell Boeing Joint Project Office is the primary entity responsible for the production and sustainment of the MV-22 Osprey. As a joint venture between Bell Helicopter (a Textron company) and Boeing, they have been involved with the MV-22 program since its inception. Their track record includes the successful production of the aircraft itself and the provision of ongoing support, maintenance, and upgrades. While the MV-22 program has faced its share of challenges and scrutiny over its history, Bell Boeing has consistently delivered the aircraft and associated components required by the U.S. military. Their established role suggests a deep understanding of the aircraft's systems and the specific requirements for its components and upgrades.

Are there any comparable spending benchmarks for aircraft retrofit kits or similar defense manufacturing contracts?

Finding precise, publicly available spending benchmarks for highly specific aircraft retrofit kits like those for the MV-22 can be challenging due to the proprietary nature of defense contracts and the unique specifications involved. However, general benchmarks for aircraft modification and sustainment contracts can provide context. For instance, the total cost of ownership for military aircraft often includes significant allocations for upgrades and retrofits over their lifespan. Industry reports on defense aerospace manufacturing can indicate average profit margins or cost structures for similar complex assemblies. Without access to the specific technical details and quantities within this $57.95 million contract, direct per-unit cost comparisons are difficult, but the overall value should be assessed against the total lifecycle cost of the MV-22 program and the criticality of the upgrades provided.

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

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

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

Financial Breakdown

Contract Ceiling: $57,954,802

Exercised Options: $57,954,802

Current Obligation: $57,954,802

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $6,893,220

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline