DoD's $145.8M V-22 Program Effort Awarded to Bell Boeing, Lacking Competition

Contract Overview

Contract Amount: $145,854,298 ($145.9M)

Contractor: Bell Boeing Joint Project Office

Awarding Agency: Department of Defense

Start Date: 2019-01-22

End Date: 2019-11-30

Contract Duration: 312 days

Daily Burn Rate: $467.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: PBL&E EFFORT FOR THE V-22 PROGRAM

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $145.9 million to BELL BOEING JOINT PROJECT OFFICE for work described as: PBL&E EFFORT FOR THE V-22 PROGRAM Key points: 1. The contract value of $145.8 million represents a significant investment in aircraft parts and auxiliary equipment. 2. Awarded to Bell Boeing Joint Project Office, this contract highlights a concentrated supplier base for critical V-22 components. 3. The absence of competition raises concerns about potential price inflation and limited market responsiveness. 4. The fixed-price incentive contract type suggests an attempt to balance cost control with performance incentives. 5. The contract duration of 312 days indicates a focused effort on a specific set of deliverables. 6. The geographic location of Texas (TX) as the place of performance may have implications for regional economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for V-22 program components. The fixed-price incentive structure aims to control costs, but the lack of competition prevents a true market-based assessment of value for money. Without competitive bids, it's difficult to ascertain if the pricing reflects optimal market rates or if taxpayers are potentially overpaying for the required parts and services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically justified when only one responsible source can provide the required goods or services. However, the lack of multiple bidders limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from competitive bidding processes, potentially leading to higher overall program expenditures.

Public Impact

The primary beneficiaries are the Department of Defense and the V-22 Osprey program, ensuring the continued availability of critical aircraft components. Services delivered include the manufacturing and supply of 'Other Aircraft Parts and Auxiliary Equipment'. The place of performance is Texas (TX), potentially benefiting the regional economy through employment and supply chain activities. The contract supports specialized manufacturing capabilities within the aerospace sector, maintaining a skilled workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce government leverage in price negotiations.
Dependence on a single contractor for critical components poses supply chain risks.

Positive Signals

Fixed-price incentive contract aims to align contractor and government interests.
Award to established joint venture (Bell Boeing) suggests technical capability.
Focus on V-22 program indicates support for a critical defense asset.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Contracts for specialized aircraft components, like those for the V-22 program, often involve a limited number of qualified manufacturers. The market size for such specialized parts is substantial, driven by military readiness and modernization efforts. This contract fits within the broader category of defense manufacturing and sustainment.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the specialized requirements of V-22 components, it is unlikely that small businesses would be primary awardees. However, the prime contractor, Bell Boeing, may engage small businesses as subcontractors, contributing to the broader small business ecosystem within the aerospace supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The Defense Contract Management Agency (DCMA) likely provides oversight for performance and compliance. Transparency is facilitated through contract databases, but the sole-source nature limits public insight into the negotiation process. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

V-22 Osprey Program
Defense Logistics Agency Procurement
Aircraft Parts Manufacturing
Fixed-Price Incentive Contracts

Risk Flags

Lack of Competition
Potential for Cost Overruns
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $145.9 million to BELL BOEING JOINT PROJECT OFFICE. PBL&E EFFORT FOR THE V-22 PROGRAM

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 (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $145.9 million.

What is the period of performance?

Start: 2019-01-22. End: 2019-11-30.

What is the historical spending trend for V-22 program components awarded to Bell Boeing?

Analyzing historical spending for V-22 program components awarded to Bell Boeing requires access to detailed contract databases beyond the provided data. However, general trends in defense spending often show consistent investment in sustainment and modernization of major platforms like the V-22. Without specific historical data points for this particular contract or similar component awards, it's difficult to establish a precise trend. Factors influencing spending include operational tempo, component lifespan, and technological upgrades. A comprehensive review would involve examining annual spending patterns, the number and value of contracts awarded over several fiscal years, and any significant fluctuations that might indicate changes in program requirements or market conditions.

How does the pricing of this contract compare to similar sole-source awards for aircraft components?

Direct comparison of pricing for this $145.8 million V-22 component contract to similar sole-source awards is challenging without access to a comprehensive database of comparable contracts, including their specific technical requirements, quantities, and pricing structures. Sole-source awards inherently lack the price discovery mechanism of competition. The 'fixed-price incentive' (FPI) type suggests that while a target cost and price exist, there are provisions for sharing savings or overruns, aiming to incentivize efficiency. However, without benchmarks from competitively awarded contracts for equivalent parts or services, it's difficult to definitively assess if the pricing is optimal or if taxpayers are receiving fair value. Government auditors and cost analysts would typically perform detailed cost realism analyses during the negotiation phase to validate pricing.

What are the primary risks associated with a sole-source award for critical V-22 program components?

The primary risks associated with a sole-source award for critical V-22 program components include potential for inflated pricing due to the absence of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and increased vulnerability to supply chain disruptions if the sole source faces production issues or financial instability. Taxpayers may bear higher costs without the assurance of best value. Furthermore, the government's negotiating leverage is diminished, potentially leading to less favorable contract terms. Dependence on a single entity for essential parts can also create strategic risks if geopolitical factors or unforeseen events impact the contractor's ability to deliver.

What is the expected performance outcome or effectiveness of the services delivered under this contract?

The expected performance outcome under this contract is the timely and quality delivery of 'Other Aircraft Parts and Auxiliary Equipment' essential for the V-22 program. The 'fixed-price incentive' (FPI) contract type implies that performance is tied to specific cost and delivery targets. Success would be measured by the contractor meeting these targets, ensuring the components are delivered on schedule and meet all technical specifications required for the V-22 aircraft's operational readiness. Effectiveness is ultimately gauged by the contribution of these parts to the overall reliability, maintainability, and mission capability of the V-22 fleet, minimizing downtime and ensuring mission success for the warfighter.

What is the significance of the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code (336413) in the context of this contract?

The NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' signifies that the contract is for the production of components and accessories for aircraft that are not elsewhere classified. This broad category encompasses a wide range of parts, from structural elements and engine components to electronic systems and specialized equipment. For the V-22 program, this likely includes critical, high-technology parts that are specific to the tiltrotor design. The code indicates a specialized manufacturing capability is required, often involving advanced materials, precision engineering, and rigorous quality control, aligning with the complex nature of modern military aircraft.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 401 TILTROTOR DR, 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: $145,854,298

Exercised Options: $145,854,298

Current Obligation: $145,854,298

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $257,584

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX19D9410

IDV Type: IDC

Timeline