Department of the Navy awards $11.2M for aircraft parts, with limited competition and a cost-plus-fixed-fee structure

Contract Overview

Contract Amount: $11,227,975 ($11.2M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2023-09-27

End Date: 2026-09-30

Contract Duration: 1,099 days

Daily Burn Rate: $10.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FY23 MV/CMV/CV CDPS

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $11.2 million to BELL BOEING JOINT PROJECT OFFICE for work described as: FY23 MV/CMV/CV CDPS Key points: 1. The contract utilizes a cost-plus-fixed-fee pricing model, which can lead to higher costs if contractor expenses exceed projections. 2. Limited competition raises concerns about potential overpayment and reduced incentive for cost efficiency. 3. The contract duration of nearly three years suggests a need for sustained supply of these aircraft parts. 4. The award is a delivery order against an existing contract, indicating a pre-established relationship and potentially less rigorous vetting for this specific order. 5. The geographic location of the contractor in Texas may have implications for regional economic impact and supply chain logistics. 6. The absence of small business set-aside flags suggests this contract did not prioritize small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this $11.2 million contract is challenging without specific details on the aircraft parts and their required specifications. The cost-plus-fixed-fee (CPFF) structure, while allowing for flexibility, inherently carries a higher risk of cost overruns compared to fixed-price contracts. The contractor's base fee is fixed, but the government bears the risk of actual costs incurred. Without comparable contract data for similar aircraft parts, it's difficult to definitively assess if the pricing is competitive or represents good value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under a 'NOT COMPETED' status, indicating that the Bell Boeing Joint Project Office did not solicit bids from multiple sources for this specific delivery order. This suggests that the parts or services were likely procured under an existing contract vehicle where competition may have occurred previously, or there were specific justifications for not competing this particular order. The limited competition means there was less opportunity for price discovery and potentially less pressure on the contractor to offer the most competitive pricing.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers as the government may not benefit from the most favorable pricing achievable through a robust bidding process.

Public Impact

The primary beneficiaries are likely the U.S. Navy's aviation programs, ensuring the continued operational readiness of aircraft. The contract delivers essential aircraft parts, crucial for maintenance, repair, and operational sustainment of naval aviation assets. The geographic impact is concentrated in Texas, where the contractor is located, potentially supporting local jobs and the regional aerospace supply chain. Workforce implications may include employment opportunities for skilled labor in aircraft parts manufacturing and support within the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize higher spending by the contractor as the government absorbs the cost risk.
Lack of open competition limits the government's ability to secure the best possible pricing and terms.
The 'NOT COMPETED' status warrants scrutiny to ensure no viable competitive opportunities were overlooked.
Reliance on a single source or limited competition can create supply chain vulnerabilities.
The specific nature of 'Other Aircraft Parts' is broad and could encompass critical components where price variations are significant.

Positive Signals

The award is a delivery order against an existing contract, suggesting a potentially streamlined process for urgent needs.
The contractor, Bell Boeing Joint Project Office, is a known entity in defense contracting, implying some level of established capability.
The contract duration of nearly three years indicates a predictable demand and potential for stable supply.
The fixed fee component of the CPFF contract provides some cost certainty for the contractor's profit margin.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high technological demands, stringent quality control, and often long production cycles. Spending in this area is directly tied to military readiness and the sustainment of aging or active aircraft fleets. Comparable spending benchmarks would typically involve analyzing the unit costs of similar aircraft components across different military branches or allied nations, considering factors like material, complexity, and volume.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that large businesses, such as the Bell Boeing Joint Project Office, were the primary recipients. There is no explicit information regarding subcontracting plans for small businesses within this specific delivery order. The absence of small business set-asides in this instance means that opportunities for small business participation were not mandated, potentially limiting their direct involvement and the flow-down of contract value to this segment of the ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a delivery order against an existing contract, the initial oversight framework was likely established during the parent contract's award. Transparency is facilitated through contract databases like FPDS, which provide basic award details. Accountability measures would involve performance monitoring by the Navy to ensure delivery of parts meets specifications and timelines. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Parts Manufacturing
Defense Logistics
Naval Aviation Sustainment
Aerospace Components
Cost-Plus Contracts
Sole Source Procurement (if applicable to parent contract)

Risk Flags

Limited Competition
Cost-Plus Pricing Structure
Lack of Specific Part Identification
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.2 million to BELL BOEING JOINT PROJECT OFFICE. FY23 MV/CMV/CV CDPS

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 $11.2 million.

What is the period of performance?

Start: 2023-09-27. End: 2026-09-30.

What is the specific type of aircraft parts being procured under this contract, and what is their criticality to naval operations?

The provided data classifies the contract under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' However, it does not specify the exact nature or criticality of the parts. These could range from routine maintenance components to highly specialized equipment essential for specific aircraft systems. Understanding the exact parts would allow for a more precise assessment of their impact on naval operations, potential single points of failure in the supply chain, and the justification for limited competition. Without this detail, it's assumed they are necessary for maintaining fleet readiness.

What was the justification for not competing this delivery order, and what was the process for determining the 'NOT COMPETED' status?

The 'NOT COMPETED' status typically implies that the contracting officer determined that full and open competition was not feasible or not in the government's best interest for this specific order. Common justifications include: the existence of a sole-source parent contract, urgent and compelling needs where only one source can reasonably fulfill the requirement, or specific technical requirements that only one contractor can meet. The process involves documenting this justification in accordance with Federal Acquisition Regulation (FAR) Part 6. Without the specific justification document, it's impossible to know the precise reason, but it suggests that competitive bidding was either not possible or not pursued for this particular award.

How does the 'COST PLUS FIXED FEE' (CPFF) pricing structure compare to other contract types used for similar aircraft parts procurement by the Department of the Navy?

Cost-Plus-Fixed-Fee (CPFF) contracts are generally used when the scope of work is not well-defined, or when there is significant uncertainty in the costs of performance. In such cases, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts (e.g., FFP), CPFF shifts more cost risk to the government. For aircraft parts, especially those that are standardized or have well-understood manufacturing processes, fixed-price contracts are often preferred for better cost control. The Navy might opt for CPFF if these parts are developmental, require extensive R&D, or involve unique manufacturing challenges where upfront cost estimation is difficult. However, it generally leads to higher overall spending than fixed-price alternatives when costs are predictable.

What is the historical spending pattern for this specific contract or similar aircraft parts by the Department of the Navy?

The provided data only details a single delivery order valued at $11.2 million with an estimated completion date in September 2026. To understand historical spending patterns, one would need to examine the parent contract under which this delivery order was issued, looking at all prior delivery orders and their values, dates, and justifications. Additionally, analyzing broader Department of the Navy spending on NAICS code 336413 or specific aircraft part categories over multiple fiscal years (e.g., FY20-FY23) would reveal trends. Without access to the parent contract details or broader spending databases, a historical analysis is not possible from this data alone.

What are the potential risks associated with the contractor, Bell Boeing Joint Project Office, in fulfilling this contract, considering their track record?

The Bell Boeing Joint Project Office is a well-established entity within the defense sector, known for its work on V-22 Osprey programs. While this provides a degree of confidence in their technical capabilities and experience, potential risks can still exist. These might include past performance issues on other contracts (e.g., cost overruns, schedule delays, quality problems), though such information is not provided here. For this specific contract, risks could also stem from the CPFF structure leading to cost escalation, potential supply chain disruptions affecting component availability, or challenges in meeting the precise technical specifications required for the aircraft parts. A thorough review of their past performance metrics and any documented issues on similar contracts would be necessary for a comprehensive risk assessment.

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $12,145,422

Exercised Options: $11,227,975

Current Obligation: $11,227,975

Actual Outlays: $1,840

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $558,507

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001922G0002

IDV Type: BOA

Timeline