DoD Awards $1B+ for V-22 Osprey Aircraft Program to Bell Helicopter Textron Inc

Contract Overview

Contract Amount: $1,019,958,994 ($1.0B)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 1999-03-31

End Date: 2012-01-13

Contract Duration: 4,671 days

Daily Burn Rate: $218.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: 199908!1700!0777!AC5J0!NAVAL AIR SYSTEMS COMMAND !N0001999C1090 !A!*!* !19990331!20021031!062923321!062923321!001338979!N!77272!BELL HELICOPTER TEXTRON INC !600 E HURST BLVD !HURST !TX!76053!60000!101!42!PHILADELPHIA !PHILADELPHIA !PENN !0001!+000010000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2AVQ!V22 VERTICAL LIFT AIRCRAFT !3721!1!*!*!*!B!A!*!D !N!L!1!001!N!1A!A!N!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 $1.02 billion to BELL TEXTRON INC for work described as: 199908!1700!0777!AC5J0!NAVAL AIR SYSTEMS COMMAND !N0001999C1090 !A!*!* !19990331!20021031!062923321!062923321!001338979!N!77272!BELL HELICOPTER TEXTRON INC !600 E HURST BLVD !HURST !TX!76053!60000!101!42!PHILADELPHIA !PHILAD… Key points: 1. The contract, valued at over $1 billion, is for the V-22 Vertical Lift Aircraft program. 2. Bell Helicopter Textron Inc. is the sole awardee, indicating a lack of competition. 3. The contract type is Fixed Price Incentive, which can shift some risk to the government. 4. This spending falls within the Defense sector, specifically for aircraft procurement.

Value Assessment

Rating: questionable

The total value of $1,019,958,994.49 for the V-22 program is substantial. Without comparable contracts for similar advanced vertical lift aircraft, a precise pricing assessment is difficult. However, the significant investment warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and could potentially lead to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in a sole-source award for a major defense program raises concerns about the optimal use of taxpayer funds.

Public Impact

Taxpayers are funding a significant portion of the V-22 Osprey program, a critical but costly military asset. The sole-source nature of the award means limited transparency into the pricing negotiations. This contract supports advanced aerospace manufacturing jobs in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Fixed Price Incentive contract shifts some risk to the government.
Long contract duration (initial award to final completion) could lead to cost overruns.

Positive Signals

Supports a critical defense capability (V-22 Osprey).
Awardee is a known entity with experience in aircraft manufacturing.

Sector Analysis

This contract falls under the Defense sector, specifically for aircraft procurement. Defense spending on major platforms like the V-22 can represent a significant portion of the national budget, with benchmarks varying widely based on the complexity and quantity of the assets.

Small Business Impact

While Bell Helicopter Textron Inc. is the prime contractor, the extent of small business subcontracting is not detailed in this data. Large sole-source contracts can sometimes limit opportunities for smaller businesses in the supply chain.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure fair pricing and effective program execution. The contract's duration also requires ongoing monitoring.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Potential for cost overruns due to FPI structure
Significant taxpayer investment
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.02 billion to BELL TEXTRON INC. 199908!1700!0777!AC5J0!NAVAL AIR SYSTEMS COMMAND !N0001999C1090 !A!*!* !19990331!20021031!062923321!062923321!001338979!N!77272!BELL HELICOPTER TEXTRON INC !600 E HURST BLVD !HURST !TX!76053!60000!101!42!PHILADELPHIA !PHILADELPHIA !PENN !0001!+000010000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2AVQ!V22 VERTICAL LIFT AIRCRAFT !3721!1!*!*!*!B!A!*!D !N!L!1!0

Who is the contractor on this award?

The obligated recipient is BELL 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 $1.02 billion.

What is the period of performance?

Start: 1999-03-31. End: 2012-01-13.

What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For the V-22 program, this might stem from unique technological requirements or prior development investments. However, a thorough review would be needed to confirm that no viable competitive alternatives were overlooked, ensuring the government secured the best possible value.

How does the Fixed Price Incentive (FPI) contract structure impact cost control and risk sharing between the government and Bell Helicopter Textron Inc. for this program?

An FPI contract sets a target cost and target profit. If the final cost is below the target, both parties share in the savings. If it exceeds the target, they share in the overrun, up to a ceiling price. This structure incentivizes the contractor to control costs while also exposing the government to potential cost increases beyond the target, requiring careful monitoring of performance and cost projections.

What is the long-term strategic value and operational effectiveness of the V-22 Osprey program, considering its substantial investment?

The V-22 Osprey offers unique tiltrotor capabilities, combining vertical takeoff and landing with the speed and range of a fixed-wing aircraft. This provides significant operational advantages for troop transport, special operations, and logistics in diverse environments. Its strategic value lies in its ability to access areas inaccessible to conventional helicopters, enhancing military flexibility and mission success.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 600 E HURST BLVD, HURST, TX, 76053

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline