DoD Awards $7.34 Billion for V-22 Osprey Long Lead-Time Items to Bell Boeing
Contract Overview
Contract Amount: $7,337,457,222 ($7.3B)
Contractor: Bell Boeing Joint Project Office
Awarding Agency: Department of Defense
Start Date: 2011-12-29
End Date: 2021-09-30
Contract Duration: 3,563 days
Daily Burn Rate: $2.1M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: PROCUREMENT OF V-22 LOT 17 LONG LEAD-TIME ITEMS
Place of Performance
Location: AMARILLO, POTTER County, TEXAS, 79111
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $7.34 billion to BELL BOEING JOINT PROJECT OFFICE for work described as: PROCUREMENT OF V-22 LOT 17 LONG LEAD-TIME ITEMS Key points: 1. Significant investment in a critical defense platform. 2. Sole-source award to Bell Boeing raises questions about price discovery. 3. Long contract duration (3563 days) may impact cost control. 4. Aircraft manufacturing sector sees substantial federal spending.
Value Assessment
Rating: questionable
The contract value of $7.34 billion for long lead-time items is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential alternatives or historical benchmarks for similar complex aircraft components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Bell Boeing Joint Project Office. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for a contract of this magnitude means taxpayers may be paying a premium for these long lead-time items.
Public Impact
Ensures continued production of the V-22 Osprey, a key asset for military operations. Supports jobs and economic activity within the aerospace and defense industry. Potential for cost overruns due to sole-source nature could impact future defense budgets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Supports critical defense capability
- Long-term production planning
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a high-value segment of the defense industry. Spending benchmarks for such specialized components are often opaque due to proprietary technology and limited suppliers.
Small Business Impact
The data does not indicate any specific provisions or awards to small businesses within this sole-source contract. Further analysis would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the sole-source nature may reduce the agency's leverage in negotiating price and terms.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits price competition.
- Long contract duration increases risk of cost escalation and obsolescence.
- Lack of transparency in pricing due to non-competitive nature.
- Potential for contractor lock-in.
Tags
aircraft-manufacturing, department-of-defense, tx, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.34 billion to BELL BOEING JOINT PROJECT OFFICE. PROCUREMENT OF V-22 LOT 17 LONG LEAD-TIME ITEMS
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 $7.34 billion.
What is the period of performance?
Start: 2011-12-29. End: 2021-09-30.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or the inability to obtain the required items from other sources. Without a competitive process, the agency must rely on detailed cost proposals, audits, and market research to determine fair and reasonable pricing. The effectiveness of these measures is crucial for taxpayer protection in non-competitive procurements.
What are the potential risks associated with the long duration of this contract (3563 days)?
A long contract duration like 3563 days introduces risks such as potential cost escalation due to inflation, changes in technology rendering the procured items obsolete, and reduced flexibility for the government to adapt to evolving requirements. It also ties up significant funds for an extended period, potentially impacting other defense priorities.
How does the lack of competition impact the overall value for money for this procurement?
The lack of competition inherently diminishes the potential for achieving the best value for money. Competitive bidding drives down prices and encourages innovation as contractors vie for the award. A sole-source award removes this pressure, potentially leading to higher costs and less favorable terms for the government, thus reducing the overall value realized by taxpayers.
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: FIXED PRICE INCENTIVE (L)
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: $7,594,823,511
Exercised Options: $7,533,035,964
Current Obligation: $7,337,457,222
Actual Outlays: $-1,096,972
Subaward Activity
Number of Subawards: 542
Total Subaward Amount: $1,327,247,876
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-12-29
Current End Date: 2021-09-30
Potential End Date: 2021-09-30 00:00:00
Last Modified: 2025-12-22
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