DoD's V-22 Program Spends $960M on Aircraft Parts in 2019, Lacking Competition
Contract Overview
Contract Amount: $960,852,737 ($960.9M)
Contractor: Bell Boeing Joint Project Office
Awarding Agency: Department of Defense
Start Date: 2019-01-01
End Date: 2021-12-31
Contract Duration: 1,095 days
Daily Burn Rate: $877.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: V-22 PBL PERIOD OF PERFORMANCE 1 (1 JANUARY 2019 - 31 DECEMBER 2019)
Place of Performance
Location: AMARILLO, POTTER County, TEXAS, 79111
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $960.9 million to BELL BOEING JOINT PROJECT OFFICE for work described as: V-22 PBL PERIOD OF PERFORMANCE 1 (1 JANUARY 2019 - 31 DECEMBER 2019) Key points: 1. Significant spending on V-22 aircraft parts highlights a critical defense program's financial scale. 2. The sole reliance on Bell Boeing Joint Project Office indicates a lack of competitive pressure. 3. Potential risks include inflated costs and limited innovation due to the absence of market forces. 4. The 'Other Aircraft Parts' sector is vital for military readiness, but this contract lacks transparency.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure, with a base fee of $877.5M and an award fee of $960.9M, suggests potential for cost overruns. Benchmarking against similar sole-source contracts for specialized aircraft components is difficult but likely shows a premium.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to the Bell Boeing Joint Project Office. This lack of competition limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition on a nearly $1 billion contract raises concerns about the efficient use of taxpayer funds and the potential for overpayment.
Public Impact
Taxpayers may be overpaying for V-22 aircraft parts due to the lack of competitive bidding. The long-term reliance on a single provider could stifle technological advancements in aircraft component manufacturing. The Department of Defense's procurement strategy for critical assets like the V-22 warrants closer scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Lack of competition
- Cost-plus contract type
- High contract value
Positive Signals
- Essential for V-22 program
- Potential for performance incentives
Sector Analysis
The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is crucial for national defense, supporting complex platforms like the V-22 Osprey. Spending benchmarks for sole-source contracts in this specialized area are often higher than for competed contracts.
Small Business Impact
This contract was awarded to the Bell Boeing Joint Project Office, a joint venture, and there is no indication of small business participation. The nature of sole-source, high-value defense contracts often limits opportunities for small businesses.
Oversight & Accountability
The sole-source nature of this contract raises questions about the effectiveness of oversight in ensuring fair pricing and promoting competition. Further review by the Government Accountability Office or Inspector General may be warranted.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns
- Limited innovation incentives
- High contract value without competition
- Sole-source dependency
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, tx, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $960.9 million to BELL BOEING JOINT PROJECT OFFICE. V-22 PBL PERIOD OF PERFORMANCE 1 (1 JANUARY 2019 - 31 DECEMBER 2019)
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 $960.9 million.
What is the period of performance?
Start: 2019-01-01. End: 2021-12-31.
What is the justification for the sole-source award of this significant V-22 parts contract?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of viable alternative sources. For the V-22, specific components might be exclusively manufactured or supported by the Bell Boeing Joint Project Office, making competition impractical or impossible without substantial investment in new capabilities.
How does the cost-plus incentive fee structure impact the overall cost and risk for the government?
A cost-plus incentive fee (CPIF) contract allows for costs plus a fee that is adjusted based on performance against targets. While it aims to incentivize efficiency, it can still lead to higher costs if targets are not well-defined or if the government lacks robust oversight. The government bears the risk of cost overruns, but the incentive fee aims to mitigate this by rewarding cost savings or performance improvements.
What is the potential long-term impact of this non-competitive award on the V-22 program's sustainment and future upgrades?
The long-term impact of a sole-source award can include reduced pressure on the contractor to innovate or reduce costs, potentially leading to higher sustainment expenses over the V-22's lifecycle. It may also limit the government's flexibility in pursuing future upgrades or alternative solutions if the sole provider's technology becomes outdated or prohibitively expensive.
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 INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 401 TILTROTOR DR PLANT A, 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: $960,852,737
Exercised Options: $960,852,737
Current Obligation: $960,852,737
Subaward Activity
Number of Subawards: 38
Total Subaward Amount: $9,003,967
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0038319DU501
IDV Type: IDC
Timeline
Start Date: 2019-01-01
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2023-02-23
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