DoD's $1.2B software infrastructure support contract awarded to Bell Boeing Joint Project Office, with no competition

Contract Overview

Contract Amount: $12,025,498 ($12.0M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2024-05-01

End Date: 2026-02-13

Contract Duration: 653 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: SOFTWARE INFRASTRUCTURE SUPPORT

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to BELL BOEING JOINT PROJECT OFFICE for work described as: SOFTWARE INFRASTRUCTURE SUPPORT Key points: 1. Significant investment in critical software infrastructure, suggesting a foundational role in naval operations. 2. Sole-source award raises questions about potential overpricing and lack of market-driven cost efficiencies. 3. Long contract duration (653 days) necessitates close monitoring for performance and evolving needs. 4. Contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not managed rigorously. 5. Awardee's established presence in defense contracting suggests familiarity with requirements but also potential for complacency. 6. Geographic concentration in Texas may indicate specific operational or logistical dependencies.

Value Assessment

Rating: questionable

The $1.2 billion price tag for software infrastructure support is substantial. Without competitive bidding, it's difficult to benchmark against market rates or similar contracts. The Cost Plus Fixed Fee structure, while offering flexibility, carries inherent risks of cost escalation if not meticulously managed. The lack of competition means taxpayers may not be receiving the best possible value, as there's no external pressure to optimize pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were considered. This approach bypasses the standard competitive bidding process, which typically involves multiple proposals and evaluations to ensure fair pricing and optimal solutions. The absence of competition limits the government's ability to leverage market dynamics for cost savings and innovation.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage that competition provides to negotiate favorable terms and pricing.

Public Impact

Naval operations and readiness are expected to benefit from enhanced software infrastructure. The contract supports critical IT functions within the Department of the Navy. Work is primarily located in Texas, potentially impacting the local technology and defense workforce. Ensures the continuity and modernization of essential software systems for naval aviation or other platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs and reduced innovation.
Cost Plus Fixed Fee contract type increases risk of cost overruns.
Long contract duration requires sustained oversight to ensure performance and relevance.

Positive Signals

Awardee is a joint venture with significant experience in defense contracting.
Contract addresses critical software infrastructure, essential for operational effectiveness.
Awardee's established relationship may facilitate smoother execution and integration.

Sector Analysis

This contract falls within the broader Information Technology and Defense sectors, specifically focusing on software infrastructure crucial for military operations. The market for defense IT infrastructure is characterized by long procurement cycles, high security requirements, and a mix of large prime contractors and specialized subcontractors. Benchmarking this spending is challenging due to the unique nature of defense software and the sole-source award, but it represents a significant investment in maintaining and upgrading the technological backbone of naval forces.

Small Business Impact

The contract data indicates no specific small business set-aside (ss: false, sb: false). As a sole-source award to a large joint venture, it is unlikely to directly benefit small businesses through prime contract opportunities. However, the prime contractor may engage small businesses as subcontractors, though this is not explicitly detailed in the provided data. The impact on the small business ecosystem is likely indirect, depending on the subcontracting strategy employed by Bell Boeing.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Given the sole-source nature and Cost Plus Fixed Fee structure, rigorous oversight of expenditures, performance metrics, and adherence to scope will be critical. Transparency may be limited due to the lack of competitive disclosures, but contract performance reviews and audits by the Defense Contract Audit Agency (DCAA) would be standard accountability measures.

Related Government Programs

Naval IT Modernization Programs
Defense Software Development Contracts
Aircraft Systems Support
Department of Defense Infrastructure Investments

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to BELL BOEING JOINT PROJECT OFFICE. SOFTWARE INFRASTRUCTURE SUPPORT

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 $12.0 million.

What is the period of performance?

Start: 2024-05-01. End: 2026-02-13.

What is the historical spending pattern for software infrastructure support by the Department of the Navy with Bell Boeing Joint Project Office?

Detailed historical spending data specifically for 'software infrastructure support' between the Department of the Navy and the Bell Boeing Joint Project Office is not publicly available in a consolidated format. However, Bell Boeing is known for its work on the V-22 Osprey program, which involves significant software components for flight control, mission systems, and avionics. Past contracts related to the V-22 likely included substantial software development and sustainment costs. Analyzing the total contract value over time for the V-22 program could provide an indirect indicator of the scale of their software-related work. Without specific line items for 'software infrastructure support,' a precise historical comparison is challenging, but the $1.2 billion value suggests a significant, potentially ongoing, investment in this area.

How does the Cost Plus Fixed Fee (CPFF) structure typically impact project costs and contractor incentives in defense contracts?

The Cost Plus Fixed Fee (CPFF) contract type is used when the exact costs are difficult to estimate upfront but the scope of work is well-defined. The contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. This structure incentivizes the contractor to complete the work efficiently to maximize their fee relative to the effort expended. However, it also shifts much of the financial risk to the government, as the contractor is guaranteed their fee regardless of cost overruns. Effective oversight is crucial to control costs and ensure the contractor does not inflate expenses to increase the 'cost' portion of the payment, thereby indirectly increasing the base upon which the fixed fee is calculated or simply ensuring the fee is earned.

What are the potential risks associated with a sole-source award for critical software infrastructure?

Sole-source awards for critical software infrastructure present several risks. Firstly, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, as there is no market pressure to offer the best value. Secondly, it can stifle innovation, as the incumbent contractor may have less incentive to develop novel or more cost-effective solutions. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch providers in the future. Finally, without the scrutiny of multiple bids, there's an increased possibility of the contract not fully meeting the government's needs or being awarded at an unfavorable price point. Robust contract management and performance monitoring are essential to mitigate these risks.

What is the typical performance period for similar software infrastructure support contracts within the Department of the Navy?

The typical performance period for similar software infrastructure support contracts within the Department of the Navy can vary significantly based on the nature of the software and the system it supports. For foundational infrastructure, contracts often span multiple years, sometimes with options for extension, to ensure continuity and allow for phased implementation or upgrades. Periods ranging from 3 to 5 years are common for major system support. However, specific contracts for new development or specialized support might be shorter. The 653-day duration (approximately 1.8 years) for this particular contract is on the shorter side for a large infrastructure project, suggesting it might be focused on a specific phase, upgrade, or sustainment effort rather than a complete lifecycle overhaul.

How does the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) classification relate to software infrastructure support?

The NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' primarily categorizes businesses involved in the physical production of aircraft components. Its relevance to 'SOFTWARE INFRASTRUCTURE SUPPORT' (the contract's description) is indirect but plausible within the defense sector. Modern aircraft are highly reliant on complex software for flight control, navigation, communication, and mission systems. Therefore, a contractor manufacturing aircraft parts might also possess or be responsible for the integrated software systems that operate these parts. This contract likely pertains to the software embedded within or supporting aircraft systems manufactured or maintained by entities within this sector, rather than standalone IT infrastructure.

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: $18,668,363

Exercised Options: $12,025,498

Current Obligation: $12,025,498

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