DoD's $16M V-22 Osprey Retrofit Contract Awarded to Bell Boeing Without Competition

Contract Overview

Contract Amount: $15,955,623 ($16.0M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2022-12-20

End Date: 2028-01-31

Contract Duration: 1,868 days

Daily Burn Rate: $8.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: V-22 AFT SPONSON MV-22 RETROFIT KITS & RETROFIT INSTALLS

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $16.0 million to BELL BOEING JOINT PROJECT OFFICE for work described as: V-22 AFT SPONSON MV-22 RETROFIT KITS & RETROFIT INSTALLS Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential cost savings. 2. The contract covers retrofit kits and installation for MV-22 aircraft, indicating a critical maintenance and upgrade need. 3. A long performance period of over 5 years suggests a sustained requirement for these specialized services. 4. The sole contractor, Bell Boeing, is the original manufacturer, which is common for highly specialized aerospace components. 5. The absence of competition may limit opportunities for innovation and cost reduction from alternative suppliers. 6. The contract's value, while significant, needs to be benchmarked against similar aerospace upgrade programs for a full value assessment.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without competitive bids. The firm-fixed-price structure provides some cost certainty for the government. However, the lack of competition means there's no direct market comparison to assess if the pricing is optimal. Similar complex aerospace modification contracts can vary widely in cost depending on the scope and technology involved. Further analysis would require access to historical pricing data for comparable V-22 modifications or similar aircraft upgrade programs.

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 solicited. This approach is typically used when a product or service is unique and only available from a single source, often due to proprietary technology, specialized expertise, or existing system integration. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing offers, there is less assurance that the price reflects the lowest possible cost for these essential V-22 retrofit kits and installations.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, ensuring the continued operational readiness and modernization of their MV-22 Osprey tiltrotor aircraft. The contract delivers critical retrofit kits and installation services, enhancing the performance, safety, and lifespan of the V-22 fleet. The geographic impact is primarily within the United States, likely at military bases where V-22s are stationed or undergoing maintenance. The contract supports specialized jobs within the aerospace manufacturing and maintenance sectors, particularly at Bell and Boeing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Long-term contract duration may not account for future technological advancements or cost efficiencies.
Reliance on a single supplier for critical aircraft components can create supply chain vulnerabilities.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarding to the original manufacturer ensures compatibility and specialized knowledge.
Contract addresses a clear need for V-22 fleet modernization and sustainment.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, complex supply chains, and significant R&D investment. Contracts for military aircraft components and upgrades are often sole-sourced due to the specialized nature of the technology and the established relationship between defense contractors and the government. The V-22 Osprey is a unique platform, and modifications are typically handled by the original equipment manufacturers. Spending in this sub-sector is driven by defense modernization priorities and the need to maintain aging fleets.

Small Business Impact

This contract does not appear to include specific small business set-asides. Given the sole-source nature and the specialized requirements for V-22 retrofits, it is unlikely that small businesses would be primary contractors. However, Bell Boeing may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's established procurement regulations and contract management processes. The Defense Contract Management Agency (DCMA) likely plays a role in monitoring performance and compliance. Transparency is limited due to the sole-source award, but contract modifications and payment milestones would be subject to standard government financial oversight. Inspector General reviews could be initiated if specific concerns regarding waste, fraud, or abuse arise.

Related Government Programs

V-22 Osprey Sustainment Programs
DoD Aircraft Modernization Contracts
Aerospace Component Manufacturing
Military Aircraft Parts and Equipment

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without market checks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.0 million to BELL BOEING JOINT PROJECT OFFICE. V-22 AFT SPONSON MV-22 RETROFIT KITS & RETROFIT INSTALLS

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 $16.0 million.

What is the period of performance?

Start: 2022-12-20. End: 2028-01-31.

What is the track record of Bell Boeing in delivering V-22 related components and services?

Bell Boeing, a joint venture between Bell Helicopter (Textron) and Boeing, has been the sole manufacturer and primary support provider for the V-22 Osprey program since its inception. They have a long history of delivering V-22 aircraft, associated kits, and sustainment services to the U.S. military. While the program has faced developmental challenges and cost overruns in the past, Bell Boeing has consistently provided the necessary components and technical expertise for the V-22 fleet's operation and upgrades. Their extensive experience with the V-22 platform makes them the logical, albeit sole, source for specialized retrofit kits and installations.

How does the pricing of this contract compare to similar aerospace retrofit contracts?

Direct comparison of pricing for this specific V-22 retrofit contract is difficult due to its sole-source nature and the unique specifications of the V-22 Osprey. Generally, specialized aerospace modifications for complex platforms like the V-22 are high-value, low-volume procurements. Benchmarking would require access to proprietary data on similar retrofits for other tiltrotor or large military aircraft, which is not publicly available. The firm-fixed-price contract aims to cap costs, but without competitive bids, it's hard to ascertain if the price is market-optimal. Historical spending on V-22 sustainment and upgrades by the DoD would offer some context but not a direct price comparison.

What are the primary risks associated with this sole-source contract?

The primary risk is the lack of competitive pressure, which could lead to higher-than-necessary costs for the government. Without competing bids, there's less incentive for the contractor to offer the lowest possible price or to innovate cost-saving measures. Another risk is potential vendor lock-in, where the government becomes overly reliant on Bell Boeing for future upgrades and maintenance, potentially limiting flexibility. Supply chain disruptions affecting Bell Boeing could also impact the delivery of these critical retrofit kits, posing a risk to fleet readiness.

How effective is the DoD in ensuring value for money on sole-source contracts like this?

The DoD employs several mechanisms to ensure value on sole-source contracts, though effectiveness can vary. These include conducting thorough cost and price analyses, negotiating contract terms rigorously, and leveraging historical pricing data. For highly specialized systems like the V-22, the DoD relies on the contractor's established expertise and cost proposals, scrutinizing them for reasonableness. However, the inherent limitation of sole-source awards is the absence of direct market validation through competition. Value is also assessed through performance metrics and the ultimate operational benefit derived from the upgrades.

What are the historical spending patterns for V-22 Osprey sustainment and upgrades?

Historical spending on the V-22 Osprey program, including sustainment and upgrades, has been substantial, reflecting the complexity and advanced capabilities of the aircraft. The DoD has consistently allocated significant funds annually for the operation, maintenance, and modernization of the V-22 fleet across the Navy and Marine Corps. This includes funding for spare parts, depot maintenance, technical support, and specific upgrade programs like the retrofit kits covered in this contract. Spending fluctuates based on fleet size, operational tempo, and specific modernization initiatives, but it represents a consistent, multi-billion dollar investment over the program's lifecycle.

What is the potential impact of this contract on the overall V-22 fleet readiness?

This contract is crucial for maintaining and enhancing the overall readiness of the MV-22 Osprey fleet. By providing necessary retrofit kits and installation services, it addresses potential obsolescence, improves performance, and ensures the aircraft meet current operational requirements. Timely completion of these retrofits directly contributes to the availability and reliability of the V-22s, which are vital assets for troop transport, special operations, and logistical support missions. Delays or issues with this contract could negatively impact fleet readiness and operational capability.

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

Solicitation ID: N0001923R0007

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 401 TILTROTOR DR, 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: $16,727,836

Exercised Options: $15,955,623

Current Obligation: $15,955,623

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $547,301

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001922G0002

IDV Type: BOA

Timeline