Naval Air Systems Command awards $2.03B contract to Bell Helicopter for V-22 Osprey aircraft and spares

Contract Overview

Contract Amount: $2,032,188,651 ($2.0B)

Contractor: Bell Helicopter Textron Inc

Awarding Agency: Department of Defense

Start Date: 1996-12-24

End Date: 2010-09-16

Contract Duration: 5,014 days

Daily Burn Rate: $405.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: 199712!1700!1384!AC5J0!NAVAL AIR SYSTEMS COMMAND !N0001996C0054 !A!*!P00004 !19961224!19980930!620162602!062923321!001338979!N!* !BELL HELICOPTER TEXTRON INC !1235 JEFFERSON DAVIS HWY !ARLINGTON !VA!22202!01000!510!51!ALEXANDRIA !ALEXANDRIA (CITY) !VIRGINIA !0001!+000030272000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2AVQ!V22 VERTICAL LIFT AIRCRAFT !3721!3!B!S!C!B!A!*!D !U!V!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $2.03 billion to BELL HELICOPTER TEXTRON INC for work described as: 199712!1700!1384!AC5J0!NAVAL AIR SYSTEMS COMMAND !N0001996C0054 !A!*!P00004 !19961224!19980930!620162602!062923321!001338979!N!* !BELL HELICOPTER TEXTRON INC !1235 JEFFERSON DAVIS HWY !ARLINGTON !VA!22202!01000!510!51!ALEXANDRIA !ALEXAN… Key points: 1. The contract, valued at over $2 billion, is for the V-22 Vertical Lift Aircraft. 2. Bell Helicopter Textron Inc. is the sole awardee, indicating a lack of competition. 3. The contract type is Cost Plus Incentive Fee, which can lead to cost overruns. 4. The primary sector is Aircraft Manufacturing, with a specific focus on defense aviation.

Value Assessment

Rating: questionable

The contract value of $2.03 billion is substantial. Benchmarking against similar V-22 contracts is difficult without more granular data, but the 'Cost Plus Incentive Fee' structure warrants scrutiny for potential cost escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition for a contract of this magnitude raises concerns about taxpayer value and the potential for inflated prices.

Public Impact

Significant taxpayer investment in a critical defense platform. Impact on the readiness and operational capability of the V-22 Osprey fleet. Potential for follow-on contracts and sustainment costs over the aircraft's lifecycle.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Incentive Fee contract type
Long contract duration (1996-2010)

Positive Signals

Awarded to a known prime contractor for a critical defense asset
Potential for technological advancement in vertical lift aircraft

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. The V-22 Osprey is a unique and complex vertical lift aircraft, often associated with high development and production costs.

Small Business Impact

The data does not indicate any specific provisions or subcontracting goals for small businesses within this contract. As a sole-source award to a large prime contractor, direct small business participation may be limited.

Oversight & Accountability

The contract's long duration and sole-source nature suggest a need for robust oversight to ensure cost control and performance. The 'Cost Plus Incentive Fee' structure requires careful monitoring of performance metrics and cost targets.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition and price discovery.
Cost Plus Incentive Fee structure carries inherent risk of cost overruns.
Long contract duration may indicate potential for scope creep or evolving requirements.
Lack of transparency on small business participation.
Significant financial commitment for a single platform.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.03 billion to BELL HELICOPTER TEXTRON INC. 199712!1700!1384!AC5J0!NAVAL AIR SYSTEMS COMMAND !N0001996C0054 !A!*!P00004 !19961224!19980930!620162602!062923321!001338979!N!* !BELL HELICOPTER TEXTRON INC !1235 JEFFERSON DAVIS HWY !ARLINGTON !VA!22202!01000!510!51!ALEXANDRIA !ALEXANDRIA (CITY) !VIRGINIA !0001!+000030272000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2AVQ!V22 VERTICAL LIFT AIRCRAFT !3721!3!B!S!C!B!A!*!D !U!V!1!0

Who is the contractor on this award?

The obligated recipient is BELL HELICOPTER TEXTRON INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $2.03 billion.

What is the period of performance?

Start: 1996-12-24. End: 2010-09-16.

What was the justification for the sole-source award, and were alternative solutions considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. For complex platforms like the V-22, specific technical requirements or existing program investments might have precluded open competition. A thorough review of the original justification documentation would be necessary to understand the rationale and confirm if alternatives were indeed evaluated.

How did the final costs compare to the initial estimates under the Cost Plus Incentive Fee structure?

The Cost Plus Incentive Fee (CPIF) contract aims to incentivize the contractor to control costs by sharing savings or overruns with the government based on performance targets. Analyzing the final contract cost against the initial target cost and the incentive fee structure would reveal the effectiveness of this mechanism in managing expenditures for the V-22 program.

What is the long-term sustainment cost projection for the V-22 fleet awarded under this contract?

While this contract covers the initial acquisition of V-22 aircraft and spares, the total cost of ownership extends to long-term sustainment, maintenance, and upgrades. Understanding these future costs is crucial for assessing the overall value and financial impact on the Department of Defense and taxpayers over the operational life of the aircraft.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Contractor Details

Address: 1235 JEFFERSON DAVIS HWY, ARLINGTON, VA, 22202

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline