Department of Defense awards $11.7M for Non-Recurring Engineering, with limited competition

Contract Overview

Contract Amount: $11,659,596 ($11.7M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2017-05-30

End Date: 2026-04-24

Contract Duration: 3,251 days

Daily Burn Rate: $3.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NON-RECURRING ENGINEERING (NRE) NICE

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $11.7 million to BELL BOEING JOINT PROJECT OFFICE for work described as: NON-RECURRING ENGINEERING (NRE) NICE Key points: 1. The contract's value of $11.7 million for Non-Recurring Engineering (NRE) suggests significant upfront investment in product development or modification. 2. Awarded as 'NOT COMPETED', this contract raises questions about the extent of market research and justification for excluding other potential suppliers. 3. The Cost Plus Fixed Fee (CPFF) pricing structure can introduce cost overrun risks if not carefully managed, potentially exceeding the initial $11.7 million estimate. 4. The long duration of 3251 days (approximately 9 years) indicates a substantial, long-term project, requiring sustained oversight. 5. The contract is associated with the Department of the Navy, implying a focus on naval aviation or related systems. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of Non-Recurring Engineering (NRE) is challenging without specific details on the deliverables. However, $11.7 million represents a substantial investment. The CPFF contract type, while common for R&D, carries inherent risk of cost escalation. Without competitive bids, it's difficult to assess if this price reflects fair market value or if alternative solutions could have been procured at a lower cost. The long duration also necessitates careful monitoring to ensure costs remain aligned with project milestones.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating that the Bell Boeing Joint Project Office did not solicit bids from multiple sources. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the sole provider of a necessary component or service. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.

Taxpayer Impact: The absence of competition means taxpayers may not be benefiting from the most cost-effective solution available. Without a competitive bidding process, there is a risk that the awarded price is higher than it would have been if multiple companies had vied for the contract.

Public Impact

The primary beneficiaries are likely the Department of the Navy, which will receive the results of the non-recurring engineering efforts, potentially leading to improved or new aircraft capabilities. The contract aims to deliver specialized engineering services, likely related to aircraft design, modification, or integration, supporting naval aviation readiness and technological advancement. The contract is geographically linked to Texas (TX), suggesting that the engineering work or a significant portion of it will be performed or managed within the state. The workforce implications could include employment opportunities for engineers, technicians, and support staff at the contractor's facilities in Texas and potentially other locations involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and missed opportunities for cost savings.
The CPFF contract type introduces risk of cost overruns if not rigorously managed.
The long contract duration requires sustained oversight to ensure performance and prevent scope creep.
Limited transparency due to 'NOT COMPETED' status makes independent value assessment difficult.

Positive Signals

The contract addresses a specific need for Non-Recurring Engineering, suggesting a focused effort on critical development.
The award is to a joint project office (Bell Boeing), implying established expertise and a potentially streamlined working relationship for specific defense programs.
The long duration indicates a commitment to a significant, potentially high-impact project for the Navy.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs and specialized manufacturing capabilities. Non-Recurring Engineering (NRE) is a critical component of this sector, involving the initial investment in design, tooling, and testing for new products or significant modifications. The $11.7 million awarded falls within the typical range for substantial NRE projects in defense manufacturing. This contract likely fits within the broader ecosystem of aircraft parts and auxiliary equipment manufacturing, supporting the development or sustainment of naval platforms.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the scope of work or the nature of the contractor's capabilities likely favored larger, established firms. There is no explicit information on subcontracting plans, but given the sole-source nature and the likely specialized engineering required, the direct award to Bell Boeing Joint Project Office implies limited direct opportunities for small businesses unless they are pre-existing partners or suppliers to Bell or Boeing.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Bell Boeing Joint Project Office. Given the 'NOT COMPETED' status and CPFF structure, rigorous oversight is crucial to manage costs, track progress, and ensure the engineering objectives are met. Transparency may be limited due to the lack of competitive bidding, making it essential for internal government review processes and potentially Inspector General (IG) involvement to scrutinize expenditures and performance.

Related Government Programs

Naval Aviation Programs
Aircraft Component Manufacturing
Defense Research and Development
Cost-Plus Fixed Fee Contracts
Non-Recurring Engineering Services

Risk Flags

Lack of Competition
Cost Plus Fixed Fee Pricing Risk
Long Contract Duration
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.7 million to BELL BOEING JOINT PROJECT OFFICE. NON-RECURRING ENGINEERING (NRE) NICE

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 $11.7 million.

What is the period of performance?

Start: 2017-05-30. End: 2026-04-24.

What specific Non-Recurring Engineering (NRE) tasks are covered under this $11.7 million contract?

The provided data does not specify the exact NRE tasks. Non-Recurring Engineering typically encompasses activities such as initial design, prototyping, tooling development, testing, and certification required to bring a new product or a significant modification of an existing product to production readiness. For the Bell Boeing Joint Project Office, this could relate to upgrades for existing naval aircraft (like the V-22 Osprey), development of new subsystems, or integration of advanced technologies. Without further details from the contract award notice or associated documentation, the precise nature of the NRE remains undefined, making it difficult to assess the scope and necessity of the $11.7 million investment.

Why was this contract not competed, and what justification was provided?

The contract was explicitly marked as 'NOT COMPETED'. Government contracts are typically competed to ensure fair pricing and access to the widest range of capabilities. A non-competitive award usually requires a justification, such as the existence of only one responsible source, urgent and compelling needs that preclude competition, or if the contract is for a specific type of R&D where only one entity possesses the necessary unique knowledge or technology. For the Bell Boeing Joint Project Office, this could stem from proprietary technology, unique manufacturing capabilities related to specific platforms they jointly manage, or a need to leverage their established expertise for follow-on development. The specific justification document, if publicly available, would provide the detailed rationale.

How does the Cost Plus Fixed Fee (CPFF) pricing structure impact the risk and value for this NRE contract?

The Cost Plus Fixed Fee (CPFF) structure means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. For NRE, where the scope and final costs can be uncertain, CPFF can be advantageous as it allows the project to proceed without strict upfront cost limitations, encouraging innovation. However, it shifts the risk of cost overruns to the government; if costs exceed projections, the government pays more, while the contractor's fee remains fixed. This necessitates robust government oversight to control costs and ensure the 'fixed fee' remains a reasonable profit margin relative to the effort expended. Without competitive pressure, there's a risk the initial cost estimates might be inflated.

What is the historical spending pattern for similar NRE contracts awarded by the Department of the Navy?

Analyzing historical spending for similar NRE contracts by the Department of the Navy requires access to comprehensive contract databases and specific filtering criteria (e.g., by aircraft type, system, or contractor). The $11.7 million figure for this specific NRE effort is substantial but not extraordinary within the context of major defense acquisition programs. NRE costs can vary widely depending on the complexity of the technology, the maturity of the platform, and the scope of development. Without comparative data on the specific type of NRE being procured (e.g., avionics upgrade vs. structural modification), it's difficult to benchmark this $11.7 million award against historical norms. However, the long duration (over 9 years) suggests a significant, multi-phase engineering effort.

What are the potential performance risks associated with a sole-source, long-duration NRE contract?

Performance risks for a sole-source, long-duration NRE contract are multifaceted. Firstly, the lack of competition can reduce the contractor's incentive to perform efficiently or innovate, as they face no immediate threat from competitors. Secondly, the long duration (3251 days) increases the risk of scope creep, where requirements may evolve or expand beyond the original intent, leading to cost increases and schedule delays. Technical risks are also inherent in NRE, as unforeseen challenges in design, integration, or testing can arise. Finally, maintaining consistent oversight and stakeholder engagement over nearly a decade requires sustained effort and institutional memory within the contracting agency to ensure the project stays on track and delivers the intended value.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment 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: COST PLUS FIXED FEE (U)

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: $11,659,596

Exercised Options: $11,659,596

Current Obligation: $11,659,596

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $1,519,028

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001917G0002

IDV Type: BOA

Timeline