DoD's $278.7M Bell Helicopter contract for V-22 aircraft parts shows long duration and limited competition

Contract Overview

Contract Amount: $27,870,112 ($27.9M)

Contractor: Bell Helicopter Textron Inc

Awarding Agency: Department of Defense

Start Date: 1999-04-13

End Date: 2012-06-30

Contract Duration: 4,827 days

Daily Burn Rate: $5.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199907!1700!9351!A8050!NAVAL AIR WARFARE CENTER, AIRCRA!N6833599C0216 !A!*!* !19990413!20020430!620162602!062923321!001338979!N!62851!BELL HELICOPTER TEXTRON INC !1235 JEFFERSON DAVIS HWY !ARLINGTON !VA!22202!60650!037!24!PATUXENT RIVER NAS !ST. MARY S !MARYLAND !0001!+000014664000!N!N!000000000000!1730!AIRCRAFT GROUND SERVICING EQUIPMENT !C9E!ALL OTHER SUPPLIES AND EQUIPME!2AVQ!V22 VERTICAL LIFT AIRCRAFT !3728!3!*!*!*!B!A!*!D !U!U!1!001!N!1G!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $27.9 million to BELL HELICOPTER TEXTRON INC for work described as: 199907!1700!9351!A8050!NAVAL AIR WARFARE CENTER, AIRCRA!N6833599C0216 !A!*!* !19990413!20020430!620162602!062923321!001338979!N!62851!BELL HELICOPTER TEXTRON INC !1235 JEFFERSON DAVIS HWY !ARLINGTON !VA!22202!60650!037!24!PATUXENT RIVER NAS !ST. MA… Key points: 1. Contract awarded for V-22 aircraft parts, indicating a critical component for a high-profile defense program. 2. The contract's extended duration suggests a long-term need for these specific parts. 3. Limited competition raises questions about potential price efficiencies and market responsiveness. 4. The award to Bell Helicopter Textron Inc. points to a sole-source or highly concentrated supplier relationship. 5. Analysis of cost-plus-fixed-fee structure is crucial for understanding profit margins and cost control. 6. Geographic concentration in Maryland for contract performance.

Value Assessment

Rating: fair

The total value of $278.7 million over its extended period of performance (from 1999 to 2012) suggests a significant investment. Benchmarking this against similar sole-source or limited-competition contracts for specialized aerospace components is challenging without more data. The cost-plus-fixed-fee (CPFF) contract type, while common for R&D or uncertain cost environments, can sometimes lead to higher overall costs if not managed rigorously, as the contractor is reimbursed for allowable costs plus a fixed fee. Without detailed cost breakdowns, it's difficult to definitively assess value for money, but the extended duration and limited competition warrant scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED,' indicating a sole-source or limited competition scenario. This typically occurs when only one responsible source can provide the required supplies or services, or when there's a compelling justification for not seeking competition. The lack of a competitive bidding process means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a fully competed contract. The specific reasons for this sole-source award are not detailed in the provided data.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium, as the government lacks the leverage of multiple bidders to negotiate the best possible price. This necessitates robust oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who utilize the V-22 Osprey aircraft. This contract ensures the continued availability of critical parts for the V-22 program, supporting national defense readiness. The contract's performance is centered around Patuxent River, Maryland, impacting the local economy and workforce in that region. The supply chain for these specialized parts likely involves a network of subcontractors, potentially supporting various manufacturing jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for inflated costs due to sole-source award.
Lack of transparency in pricing due to limited competition.
Risk of contractor lock-in and reduced negotiation leverage for future contracts.
Extended performance period could mask inefficiencies if not closely monitored.

Positive Signals

Ensures critical parts availability for a key defense asset (V-22 Osprey).
Award to a known entity (Bell Helicopter Textron Inc.) suggests established expertise.
Contract structure (CPFF) can accommodate evolving requirements in complex programs.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically supporting aircraft manufacturing and maintenance. The V-22 Osprey is a unique tiltrotor aircraft, and contracts for its components are often specialized. The market for such specific parts is typically concentrated among a few key manufacturers with the necessary expertise and certifications. Spending benchmarks are difficult to establish without comparable sole-source contracts for similar high-value, specialized aerospace components.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. Given the specialized nature of V-22 aircraft parts and the likely sole-source award to Bell Helicopter Textron Inc., it is improbable that small businesses were primary awardees. Subcontracting opportunities for small businesses may exist within Bell's supply chain, but this is not explicitly detailed in the contract information.

Oversight & Accountability

The contract type is Cost Plus Fixed Fee (CPFF), which requires the government to reimburse the contractor for allowable costs plus a predetermined fixed fee. Oversight would typically involve rigorous auditing of costs, performance monitoring against milestones, and ensuring compliance with contract terms. The Department of the Navy's contracting officers and potentially Inspector General's office would be responsible for oversight. Transparency is limited due to the sole-source nature, making detailed public scrutiny of cost justifications challenging.

Related Government Programs

V-22 Osprey Program
Naval Air Systems Command (NAVAIR) Contracts
Aerospace Component Procurement
Defense Logistics Agency (DLA) Support

Risk Flags

Sole-source award
Extended contract duration
Cost-plus contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.9 million to BELL HELICOPTER TEXTRON INC. 199907!1700!9351!A8050!NAVAL AIR WARFARE CENTER, AIRCRA!N6833599C0216 !A!*!* !19990413!20020430!620162602!062923321!001338979!N!62851!BELL HELICOPTER TEXTRON INC !1235 JEFFERSON DAVIS HWY !ARLINGTON !VA!22202!60650!037!24!PATUXENT RIVER NAS !ST. MARY S !MARYLAND !0001!+000014664000!N!N!000000000000!1730!AIRCRAFT GROUND SERVICING EQUIPMENT !C9E!ALL OTHER SUPPLIES AND EQUIPME!2AVQ!V22 VERTICAL LIFT AIRCRAFT !3728!3!*!*!*!B!A!*!D !U!U!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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $27.9 million.

What is the period of performance?

Start: 1999-04-13. End: 2012-06-30.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. Common justifications for sole-source contracts include that only one responsible source is available, or that there is a compelling urgency, or that the acquisition is for a specific type of service or product where competition is not feasible. For a specialized component like parts for the V-22 Osprey, it's likely that Bell Helicopter Textron Inc. possessed unique manufacturing capabilities, proprietary knowledge, or existing tooling essential for producing these specific parts, making them the only viable source. Without further documentation from the awarding agency (Department of the Navy), the precise justification remains speculative but likely centers on technical expertise and intellectual property.

How does the Cost Plus Fixed Fee (CPFF) structure impact cost control and value for money in this contract?

The Cost Plus Fixed Fee (CPFF) contract structure reimburses the contractor for all allowable costs incurred, plus a fixed fee representing profit. This structure is often used when the exact costs cannot be determined in advance, such as in research and development or when dealing with complex, evolving requirements. For value for money, CPFF can be a double-edged sword. On one hand, it allows the government to procure necessary items even with cost uncertainties. On the other hand, it can incentivize the contractor to incur higher costs, as their profit (the fixed fee) is not directly tied to cost savings. Effective government oversight, including stringent cost auditing and performance monitoring, is crucial to ensure that costs remain reasonable and that the fixed fee represents fair profit for the work performed. Without such oversight, there's a risk of cost overruns and reduced value for taxpayers.

What is the historical spending pattern for V-22 aircraft parts procured by the Department of the Navy?

Historical spending on V-22 aircraft parts by the Department of the Navy is substantial, reflecting the program's lifecycle and operational demands. While this specific contract represents a significant portion ($278.7 million) over its extended period, it is part of a larger, ongoing investment in the V-22 program. The Navy and Marine Corps operate a fleet of V-22 Ospreys, requiring continuous procurement of spare parts, maintenance support, and upgrades. Annual spending can fluctuate based on fleet readiness needs, modernization efforts, and the availability of funding. Analyzing broader spending trends would involve examining multiple contracts over several fiscal years, including those for different component categories, sustainment, and upgrades, to understand the total cost of ownership for the V-22 platform.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

Sole-source contracts, especially those of significant value and long duration like this $278.7 million award to Bell Helicopter Textron Inc., carry inherent risks. A primary risk is the lack of price competition, which can lead to inflated costs for the government as the contractor faces less pressure to offer the lowest possible price. Contractor lock-in is another concern; the government may become overly reliant on a single supplier, diminishing its leverage in future negotiations and potentially hindering the adoption of alternative solutions. Furthermore, without the scrutiny of multiple bidders, there's a heightened risk of complacency or reduced innovation from the incumbent contractor. Effective contract management, including robust cost analysis and performance monitoring, is essential to mitigate these risks.

How does the performance location in Maryland potentially impact the contract's execution and oversight?

The contract's performance location in Maryland, specifically at Patuxent River NAS, places it within a major hub for naval aviation research, development, and acquisition. This proximity can facilitate closer collaboration between the contractor (Bell Helicopter Textron Inc.) and the Naval Air Systems Command (NAVAIR), which is also headquartered at Patuxent River. This can streamline communication, oversight, and issue resolution. However, it also means that a significant portion of the contract's economic impact is concentrated in this region. Oversight from the government's perspective might be more direct due to physical proximity, potentially allowing for more frequent site visits and inspections. The concentration of defense-related activities in Maryland also means a skilled workforce is available, which can be beneficial for contract execution.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline