DoD awards $23.2M for long-lead time aircraft parts, with no competition

Contract Overview

Contract Amount: $23,214,375 ($23.2M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2021-05-07

End Date: 2027-11-28

Contract Duration: 2,396 days

Daily Burn Rate: $9.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS DELIVERY ORDER IS TO ORDER THE LONG-LEAD TCAS PROCESSOR.

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to BELL BOEING JOINT PROJECT OFFICE for work described as: THE PURPOSE OF THIS DELIVERY ORDER IS TO ORDER THE LONG-LEAD TCAS PROCESSOR. Key points: 1. Contract awarded for long-lead time components, indicating a need for early procurement. 2. Sole-source award suggests potential lack of market competition or specialized requirements. 3. Fixed-price contract type shifts cost risk to the contractor. 4. Contract duration extends over six years, suggesting a long-term need. 5. Awarded by the Department of the Navy, part of broader DoD procurement. 6. The contract is for aircraft parts, fitting within the defense manufacturing sector.

Value Assessment

Rating: questionable

The contract value of $23.2 million for aircraft parts is difficult to benchmark without specific part details and market rates. The firm-fixed-price structure is standard for predictable procurements. However, the lack of competition raises concerns about whether the government secured the best possible price. Without comparative data or a competitive bidding process, assessing the value-for-money is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This typically occurs when a product or service is unique, or when there's a compelling reason to use a specific contractor, such as proprietary technology or urgent needs. The lack of competition means the government did not benefit from price discovery through multiple bids.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to negotiate favorable terms.

Public Impact

The primary beneficiaries are likely the Department of Defense (Navy) and potentially the end-users of the aircraft requiring these specific parts. The services delivered involve the manufacturing and supply of long-lead time TCAS processors. The geographic impact is centered in Texas, where the contractor is located. Workforce implications may include job creation or maintenance within the aerospace manufacturing sector in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source awards can limit innovation by not engaging a broader market.
Long contract duration could be subject to economic fluctuations impacting material costs.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarding long-lead time items ensures timely availability of critical components.
Contracting with a known entity (Bell Boeing) may leverage existing expertise and established supply chains.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized aircraft components can be concentrated, with a few key suppliers dominating. The value of $23.2 million is moderate for a sole-source defense contract of this duration, but benchmarking is difficult without knowing the specific components and their market prevalence.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'sb': false. There is no information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless the prime contractor has existing subcontracting relationships not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny might be higher to ensure justification and fair pricing. Inspector General involvement is possible if any irregularities or fraud are suspected. Transparency is limited due to the non-competitive nature.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Long-Lead Time Items
Sole-Source Contracts
Department of the Navy Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to BELL BOEING JOINT PROJECT OFFICE. THE PURPOSE OF THIS DELIVERY ORDER IS TO ORDER THE LONG-LEAD TCAS PROCESSOR.

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 $23.2 million.

What is the period of performance?

Start: 2021-05-07. End: 2027-11-28.

What is the specific nature of the 'long-lead' TCAS processor, and why is it only available from Bell Boeing?

The 'long-lead' nature of the TCAS (Traffic Collision Avoidance System) processor refers to components that require extended manufacturing times, often due to complex processes, specialized materials, or reliance on unique supply chains. Bell Boeing, as a joint venture, likely possesses proprietary technology, specialized tooling, or exclusive manufacturing rights for these specific processors essential for certain aircraft platforms. This exclusivity or specialized capability is often the justification for sole-source awards, as alternative suppliers may not exist or be capable of producing the required item within the necessary timeframe or specifications. Further details on the specific technical requirements and the justification for sole-sourcing would be needed for a complete understanding.

How does the $23.2 million cost compare to similar TCAS processor procurements or other long-lead aircraft parts?

Benchmarking the $23.2 million cost for these TCAS processors is challenging without more specific data. 'Long-lead' items can vary significantly in price based on complexity, materials, and the specific aircraft platform they support. A direct comparison to other TCAS processor procurements would require knowing the exact model, quantity, and the specific contract vehicle used (e.g., competitive vs. sole-source). Similarly, comparing it to 'other long-lead aircraft parts' is too broad. However, for a sole-source award of this magnitude over a six-year period, it suggests a significant investment. Without competitive bids or publicly available cost breakdowns, it's difficult to definitively state if this represents a fair market price or if taxpayers are overpaying.

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

The primary risks associated with a sole-source award for critical aircraft components include potential overpricing due to the lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a lack of market validation for the chosen solution. Taxpayers may bear a higher cost than if the contract were competed. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if the sole source experiences production issues, delivery delays, or financial instability, it could significantly impact the availability of essential aircraft parts. This also limits the government's leverage in negotiations and contract modifications.

What is the historical spending pattern for TCAS processors or similar aircraft parts by the Department of the Navy?

Historical spending patterns for TCAS processors or similar aircraft parts by the Department of the Navy are not detailed in the provided data. To assess this, one would need to query federal procurement databases (like USASpending.gov or FPDS) for past contracts awarded for TCAS components, specifically looking at the Navy's procurement history. Analyzing these patterns would involve examining the number of competitors, contract types (fixed-price vs. cost-plus), award values, and duration of previous awards. This analysis could reveal trends in pricing, competition levels, and the frequency of sole-source awards for such items, providing context for the current $23.2 million contract.

How does the firm-fixed-price contract type mitigate or introduce risk for this long-lead item procurement?

A firm-fixed-price (FFP) contract type generally mitigates risk for the government by establishing a ceiling on the total cost. The contractor assumes the responsibility for any cost overruns, which incentivizes them to manage their expenses efficiently. For long-lead items, FFP provides cost certainty, which is valuable for budgeting. However, it can introduce risk for the contractor if unforeseen issues arise during the extended production period, potentially leading them to cut corners or seek contract modifications. For the government, the risk shifts from cost overrun to ensuring the contractor can deliver the quality product at the agreed price, especially given the sole-source nature which limits negotiation leverage if issues arise.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001920R0570

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: $23,214,375

Exercised Options: $23,214,375

Current Obligation: $23,214,375

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $8,143,895

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001917G0002

IDV Type: BOA

Timeline