DoD awards $38.8M for System Configuration Sets, raising concerns about competition and value

Contract Overview

Contract Amount: $38,823,345 ($38.8M)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 2020-02-24

End Date: 2022-08-18

Contract Duration: 906 days

Daily Burn Rate: $42.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SYSTEM CONFIGURATION SETS - TERM SEPM 2

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76118

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $38.8 million to BELL TEXTRON INC for work described as: SYSTEM CONFIGURATION SETS - TERM SEPM 2 Key points: 1. Significant contract value for specialized engine equipment. 2. Sole-source award limits competitive pricing. 3. Potential for cost overruns due to Cost Plus Fixed Fee structure. 4. Lack of transparency in pricing benchmarks. 5. Limited small business participation expected.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type, combined with a lack of competitive bidding, makes it difficult to assess value. The awarded amount of $38.8M for system configuration sets needs further benchmarking against similar specialized equipment contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating a lack of competition. This significantly limits the government's ability to discover the lowest possible price and may lead to inflated costs.

Taxpayer Impact: Taxpayer funds may be used inefficiently due to the absence of competitive pressure on pricing.

Public Impact

Limited visibility into the necessity and cost-effectiveness of these specific system configuration sets. Potential for higher costs to taxpayers due to non-competitive award. Impact on readiness if these components are critical and overpriced.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of pricing transparency
Limited small business involvement

Positive Signals

Contract awarded to a known entity (Bell Textron Inc.)
Duration of contract aligns with potential need for system configuration.

Sector Analysis

This contract falls under 'Other Engine Equipment Manufacturing,' a specialized sector within the broader aerospace and defense industry. Spending in this niche can be high due to unique technical requirements and limited suppliers, making competitive bidding crucial.

Small Business Impact

The contract was not set aside for small businesses, and the sole-source nature further limits opportunities for SMB participation. This suggests a reliance on large, established contractors for these specialized components.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential waste. Robust justification for the sole-source decision should be publicly available and scrutinized.

Related Government Programs

Other Engine Equipment Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns
Limited transparency in pricing
No small business set-aside
Reliance on sole-source justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.8 million to BELL TEXTRON INC. SYSTEM CONFIGURATION SETS - TERM SEPM 2

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 $38.8 million.

What is the period of performance?

Start: 2020-02-24. End: 2022-08-18.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's difficult to assess the validity of the sole-source decision. The government should have conducted a price analysis, potentially using historical data or market research, to ensure the Cost Plus Fixed Fee structure resulted in a reasonable overall cost, despite the lack of competition.

How does the Cost Plus Fixed Fee structure impact the government's ability to control costs for these system configuration sets?

The Cost Plus Fixed Fee (CPFF) structure provides the contractor with reimbursement for allowable costs plus a predetermined fixed fee. While the fee is fixed, the contractor has less incentive to control costs compared to fixed-price contracts, as cost overruns directly increase the total payment. This structure can lead to higher overall spending if not rigorously monitored and managed by the government.

What is the potential impact on future procurement if this sole-source award sets a precedent for similar 'Other Engine Equipment Manufacturing' needs?

If this sole-source award becomes a precedent, it could stifle competition in the 'Other Engine Equipment Manufacturing' sector, leading to consistently higher prices and reduced innovation. It may discourage new entrants and entrench incumbent contractors, limiting the government's options and potentially increasing long-term costs for critical components.

Industry Classification

NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Other Engine Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6893613R0054

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc

Address: 3255 BELL FLIGHT BLVD, 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: $41,505,840

Exercised Options: $41,505,840

Current Obligation: $38,823,345

Actual Outlays: $10,551,628

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $75,279

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6893615D0022

IDV Type: IDC

Timeline