DoD awards $165M for H-1 helicopter parts, with Bell Textron Inc. as the sole provider

Contract Overview

Contract Amount: $165,263,874 ($165.3M)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 2025-01-01

End Date: 2025-12-31

Contract Duration: 364 days

Daily Burn Rate: $454.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: H-1 PBL YEAR 1 DELIVERY ORDER

Place of Performance

Location: RICHLAND HILLS, TARRANT County, TEXAS, 76118

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $165.3 million to BELL TEXTRON INC for work described as: H-1 PBL YEAR 1 DELIVERY ORDER Key points: 1. Value for money is difficult to assess due to limited competition and lack of detailed cost breakdowns. 2. Competition dynamics are heavily skewed towards a sole-source provider, potentially limiting price negotiation. 3. Risk indicators include reliance on a single supplier and potential for cost overruns without competitive pressure. 4. Performance context is tied to ongoing H-1 helicopter sustainment, a critical but potentially costly area. 5. Sector positioning is within the defense aerospace manufacturing segment, dominated by established prime contractors.

Value Assessment

Rating: questionable

The contract value of $165.26 million for one year of H-1 PBL (Product Based Logistics) delivery order is substantial. However, without a competitive bidding process, it is challenging to benchmark the pricing against market rates or similar contracts. The firm-fixed-price structure offers some cost certainty, but the absence of competition raises concerns about whether the government is achieving the best possible value. Further analysis of cost breakdowns and historical pricing would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. Bell Textron Inc. is identified as the sole provider for these H-1 helicopter parts. The lack of competition limits the opportunity for multiple bidders to present proposals, which typically drives down prices and encourages innovation. This approach is often used when a specific manufacturer's parts are required for existing platforms, but it removes the price discovery mechanism inherent in open competition.

Taxpayer Impact: The sole-source nature of this award means taxpayers are likely paying a premium, as there was no competitive pressure to secure the lowest possible price. This also limits the government's leverage in negotiating terms and pricing.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who rely on the H-1 helicopter fleet for critical operations. Services delivered include the provision of essential parts for the sustainment and operational readiness of H-1 helicopters. The geographic impact is primarily within the United States, supporting military bases and operations. Workforce implications include supporting specialized manufacturing jobs within Bell Textron Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential savings.
Lack of transparency in cost build-up for sole-source parts.
Potential for price increases in future years without competitive pressure.
Dependence on a single supplier for critical aircraft components.

Positive Signals

Firm-fixed-price contract provides cost certainty for the current performance period.
Award supports the sustainment of a critical military aviation platform.
Contract ensures availability of necessary parts for operational readiness.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. This sector is characterized by high barriers to entry, specialized technical expertise, and significant reliance on established relationships with prime defense contractors. Bell Textron Inc. is a major player in this space, particularly for its legacy helicopter platforms. Comparable spending benchmarks are difficult to establish without more granular data on specific part types and volumes, but overall defense aircraft parts procurement represents a multi-billion dollar market annually.

Small Business Impact

There is no indication that this contract includes small business set-asides or subcontracting requirements. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal. However, Bell Textron Inc. may engage small businesses within its own supply chain, but this is not explicitly detailed in the award information. The absence of set-asides means opportunities for small businesses to directly compete for this specific contract are non-existent.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified parts at an agreed-upon price. Transparency is limited due to the sole-source nature and the proprietary nature of specific part costs. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

H-1 Helicopter Program
Naval Aviation Sustainment
Defense Logistics Agency (DLA) Parts Procurement
Aircraft Component Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price escalation
Dependence on single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $165.3 million to BELL TEXTRON INC. H-1 PBL YEAR 1 DELIVERY ORDER

Who is the contractor on this award?

The obligated recipient is BELL TEXTRON INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $165.3 million.

What is the period of performance?

Start: 2025-01-01. End: 2025-12-31.

What is Bell Textron Inc.'s track record with the H-1 helicopter program and similar sustainment contracts?

Bell Textron Inc. has a long-standing relationship with the Department of Defense, particularly concerning the H-1 family of helicopters, which includes the UH-1Y Venom and AH-1Z Viper. As the original equipment manufacturer (OEM) for these platforms, Bell Textron possesses unique knowledge and capabilities for their sustainment. Their track record typically involves providing a range of services, including parts manufacturing, repair, overhaul, and technical support. Historically, contracts for OEM parts sustainment, especially sole-source, are common due to intellectual property rights and specialized manufacturing requirements. While generally reliable in delivering required components, the cost-effectiveness of sole-source OEM parts can be a recurring point of scrutiny, as competitive alternatives are often unavailable or require extensive qualification.

How does the $165.26 million contract value compare to previous years' spending on H-1 PBL?

Direct year-over-year comparison of the $165.26 million value for this specific delivery order is challenging without access to historical contract data for the H-1 Product Based Logistics (PBL) program. PBL contracts are often structured with multiple CLINs (Contract Line Item Numbers) and delivery orders that can fluctuate based on demand, inventory levels, and specific sustainment needs. However, given the ongoing operational tempo and the age of the H-1 fleet, annual sustainment costs in the hundreds of millions of dollars are not uncommon for major aviation platforms. To provide a precise comparison, one would need to analyze the specific delivery orders issued under the overarching PBL contract in previous fiscal years and aggregate their values.

What are the primary risks associated with relying on a sole-source provider like Bell Textron Inc. for critical aircraft parts?

The primary risks associated with sole-source procurement from Bell Textron Inc. for critical H-1 helicopter parts include: 1. **Price Escalation:** Without competition, the government has limited leverage to negotiate prices, potentially leading to higher costs over time. Bell Textron can dictate pricing based on its cost structure and market position. 2. **Supply Chain Vulnerability:** Dependence on a single supplier creates a vulnerability. Any disruption in Bell Textron's manufacturing, supply chain, or financial stability could directly impact the availability of essential parts, jeopardizing aircraft readiness. 3. **Lack of Innovation:** Sole-source arrangements can disincentivize the supplier from innovating or seeking cost-saving efficiencies, as there is no competitive pressure to do so. 4. **Limited Alternatives:** If a critical part becomes unavailable or prohibitively expensive, the government may have few, if any, alternative sources, potentially leading to costly platform modifications or extended grounding.

What is the expected effectiveness of this contract in ensuring the operational readiness of the H-1 helicopter fleet?

This contract is expected to be highly effective in ensuring the operational readiness of the H-1 helicopter fleet, provided Bell Textron Inc. fulfills its obligations. The award is specifically for 'H-1 PBL YEAR 1 DELIVERY ORDER,' indicating it directly supports the Product Based Logistics strategy for these aircraft. PBL aims to ensure weapon system availability and performance by shifting focus from component delivery to system readiness outcomes. By securing a year's worth of necessary parts through a firm-fixed-price contract with the OEM, the Department of the Navy is taking a proactive step to maintain the supply chain for critical components. This should directly translate to reduced downtime for maintenance and repair, thereby supporting the operational tempo and mission capabilities of the H-1 fleet.

Are there any historical spending patterns or trends related to H-1 helicopter parts procurement that this contract aligns with?

This contract aligns with historical spending patterns for major military aviation platforms, which typically involve significant, long-term investments in sustainment and spare parts. The H-1 helicopter fleet, comprising the AH-1Z Viper and UH-1Y Venom, has been in service for a considerable period, necessitating ongoing procurement of parts for maintenance, repair, and overhaul (MRO). Historically, the Department of Defense has relied heavily on Original Equipment Manufacturers (OEMs) like Bell Textron for such parts, often through sole-source or limited-competition contracts, especially for specialized or proprietary components. Product Based Logistics (PBL) contracts, like the one this delivery order falls under, represent a more modern approach to sustainment, aiming for performance-based outcomes rather than just component delivery. However, the underlying need for OEM parts and the associated costs remain a consistent feature of defense aviation spending.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038324R002C

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc

Address: 3255 BELL FLIGHT BOULEVARD, FORT WORTH, TX, 76118

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $165,263,874

Exercised Options: $165,263,874

Current Obligation: $165,263,874

Subaward Activity

Number of Subawards: 62

Total Subaward Amount: $3,383,033

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038325DNA01

IDV Type: IDC

Timeline