DoD's V-22 Osprey Parts Contract Exceeds $16 Million, Awarded Sole-Source

Contract Overview

Contract Amount: $16,042,546 ($16.0M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2024-04-24

End Date: 2027-12-31

Contract Duration: 1,346 days

Daily Burn Rate: $11.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: V-22 ANALYSIS AND LOGISTICS

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 ANALYSIS AND LOGISTICS Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Significant contract value suggests critical role in V-22 aircraft sustainment. 3. Cost-plus-fixed-fee structure may incentivize cost escalation. 4. Long duration indicates sustained need for V-22 logistics support. 5. Focus on aircraft parts and auxiliary equipment highlights a niche but vital sector. 6. Texas location for contractor may have regional economic implications.

Value Assessment

Rating: fair

The contract value of over $16 million for V-22 aircraft parts and logistics is substantial. However, without a competitive bidding process, it is difficult to benchmark the value for money effectively. The cost-plus-fixed-fee pricing structure, while common for complex procurements, carries inherent risks of cost overruns if not rigorously managed. Comparing this to similar sole-source contracts for specialized aerospace components would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, the Bell Boeing Joint Project Office, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of multiple bidders means there was no direct price competition, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to drive down prices. The government's ability to negotiate the best possible price is diminished in sole-source situations.

Public Impact

The primary beneficiaries are the U.S. military branches operating the V-22 Osprey tiltrotor aircraft, ensuring operational readiness. Services delivered include the provision of essential parts and logistics support critical for aircraft maintenance and functionality. The geographic impact is primarily tied to the operational bases of V-22 squadrons, but the contractor is located in Texas. Workforce implications include the specialized manufacturing and logistics jobs supported by this contract at the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential savings.
Cost-plus-fixed-fee contract type can lead to cost overruns if not closely monitored.
Long contract duration requires sustained oversight to ensure performance and value.
Dependence on a single source for critical V-22 components poses a supply chain risk.

Positive Signals

Contract addresses a critical need for specialized V-22 aircraft sustainment.
Bell Boeing Joint Project Office likely possesses unique expertise for V-22 logistics.
Long-term contract provides stability for essential supply chain operations.
Delivery order structure allows for phased procurement of necessary parts.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity, significant R&D investment, and long product lifecycles. Contracts for specialized aircraft parts and logistics, like this one for the V-22 Osprey, are crucial for maintaining the operational readiness of advanced military platforms. The market for such components is often concentrated among a few specialized manufacturers due to stringent quality and performance requirements. Comparable spending benchmarks would likely involve other sole-source or limited-competition contracts for unique military aircraft sustainment.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Bell Boeing Joint Project Office, is a joint venture, suggesting a large prime. There is no explicit information regarding subcontracting plans to small businesses within this data. The impact on the small business ecosystem is therefore likely indirect, potentially through the prime's own supply chain, but not through direct set-aside requirements.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Department of Defense's contracting and program management offices. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases, but the sole-source nature limits public insight into the negotiation process. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

V-22 Osprey Program
DoD Aircraft Maintenance and Repair
Aerospace Parts Manufacturing
Defense Logistics Support Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Potential for cost overruns
Supply chain dependency

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 ANALYSIS AND LOGISTICS

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: 2024-04-24. End: 2027-12-31.

What is the historical spending trend for V-22 Osprey parts and logistics by the Department of Defense?

Analyzing historical spending on V-22 Osprey parts and logistics requires accessing detailed contract databases over several fiscal years. While this specific contract is valued at over $16 million, understanding the broader trend involves looking at all V-22 related procurements. Factors influencing spending include the operational tempo of V-22 fleets, fleet size, sustainment requirements, and any major upgrades or modifications. Historically, complex military aircraft sustainment programs often see consistent, significant spending due to the long service life of the platforms and the specialized nature of the required parts and services. Without access to a comprehensive historical dataset for the V-22 program, it's challenging to provide precise figures, but such programs typically represent multi-billion dollar investments over their lifespan.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar defense procurements in terms of cost efficiency?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex services where the scope of work is not precisely defined at the outset, or where innovation is a key component. In this structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While it allows flexibility, it can be less cost-efficient for the government compared to Firm-Fixed-Price (FFP) contracts, where the contractor bears more risk for cost overruns. FFP contracts generally incentivize contractors to control costs more aggressively. However, for highly specialized or uncertain procurements like advanced aircraft parts, CPFF might be deemed necessary to ensure the contractor undertakes the work without undue financial risk, provided robust oversight is in place to manage costs.

What are the specific risks associated with a sole-source award for critical aircraft components like those for the V-22 Osprey?

A sole-source award for critical aircraft components like those for the V-22 Osprey presents several significant risks. Primarily, the absence of competition can lead to inflated prices, as the government lacks the leverage of multiple bids to negotiate the best value. This can result in higher costs for taxpayers. Secondly, it can reduce the incentive for the sole provider to innovate or improve efficiency, as there is no competitive pressure. Furthermore, it creates a dependency on a single supplier, making the supply chain vulnerable to disruptions caused by the contractor's financial instability, production issues, or geopolitical factors. This dependency also limits the government's options if performance issues arise.

What is the typical performance track record of the Bell Boeing Joint Project Office in fulfilling defense contracts?

The Bell Boeing Joint Project Office is a joint venture specifically established to manage the V-22 Osprey program, encompassing development, production, and sustainment. As the primary entity responsible for the V-22, its track record is intrinsically linked to the program's history. The V-22 program itself has faced significant developmental challenges and cost overruns in the past, but has evolved into a critical asset for the U.S. military. The Joint Project Office has been responsible for delivering operational V-22 aircraft and providing ongoing logistics and support. Performance evaluations would typically assess on-time delivery, quality of components, cost control (within the contract structure), and overall program management effectiveness. Given the complexity and long-term nature of the V-22, the Joint Project Office's performance is generally viewed as having met operational requirements, albeit with historical program complexities.

How does the geographic location of the contractor (Texas) potentially impact delivery times and logistics costs for this V-22 contract?

The contractor's location in Texas (st: TX, sn: TEXAS) can influence delivery times and logistics costs depending on where the V-22 aircraft are primarily stationed and operated. If V-22 fleets are concentrated in bases within or near Texas, the proximity could lead to reduced shipping times and potentially lower transportation costs. However, if V-22s are deployed globally or primarily based on the East or West Coasts, the Texas location might add transit time and expense. The specific nature of the parts being supplied also plays a role; highly specialized or time-sensitive components might necessitate expedited shipping regardless of origin. The overall impact is a balance between the contractor's location, the end-user's location, and the urgency and type of parts required.

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

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: $16,042,546

Exercised Options: $16,042,546

Current Obligation: $16,042,546

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $182,450

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001923D0001

IDV Type: IDC

Timeline