DoD's $58.8M Bell 407 Helicopter contract awarded to Bell Textron Inc. with limited competition

Contract Overview

Contract Amount: $58,762,914 ($58.8M)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 2009-04-27

End Date: 2012-09-30

Contract Duration: 1,252 days

Daily Burn Rate: $46.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PREDOMINANT - BELL 407 HELICOPTERS

Place of Performance

Location: HURST, TARRANT County, TEXAS, 76053

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $58.8 million to BELL TEXTRON INC for work described as: PREDOMINANT - BELL 407 HELICOPTERS Key points: 1. Value for money assessed against comparable helicopter procurements. 2. Competition dynamics indicate a sole-source award, potentially impacting price. 3. Risk indicators include reliance on a single manufacturer for specialized aircraft. 4. Performance context is tied to aircraft manufacturing and delivery. 5. Sector positioning within the broader aerospace and defense industry. 6. The contract's duration and firm-fixed-price structure offer some cost predictability.

Value Assessment

Rating: fair

The contract value of $58.8 million for Bell 407 helicopters appears within a reasonable range for specialized aircraft procurement, though direct comparisons are difficult without specific configuration details. Benchmarking against similar sole-source or limited-competition awards for advanced helicopter platforms suggests potential for premium pricing. The firm-fixed-price structure provides cost certainty for the government, but the absence of robust competition limits opportunities for aggressive price negotiation and value optimization.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Bell Textron Inc., was solicited. This approach is typically employed when a specific manufacturer's product is required due to unique capabilities, existing fleet commonality, or specialized modifications. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without alternative offers, the government has less leverage to negotiate the lowest possible price for these specialized helicopters.

Public Impact

The primary beneficiaries are the Department of Defense (specifically the Army) and its operational units requiring advanced helicopter capabilities. Services delivered include the manufacturing and potential modification of Bell 407 helicopters. The geographic impact is primarily linked to the contractor's facilities in Texas and the deployment locations of the helicopters. Workforce implications include employment at Bell Textron's manufacturing plants and potentially at Army aviation units.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Potential for cost overruns if market prices fluctuate significantly.
Dependence on a single supplier for critical assets.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Bell 407 is a known platform with established performance characteristics.
Contract awarded to a reputable and experienced manufacturer.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Helicopter manufacturing, a sub-sector, requires specialized engineering, complex supply chains, and stringent regulatory compliance. This contract fits within the broader defense procurement landscape, where the government often procures specialized platforms from established prime contractors. Comparable spending benchmarks for military helicopters vary widely based on type, capabilities, and quantity, but multi-million dollar contracts for advanced platforms are common.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor, Bell Textron Inc., is a large aerospace manufacturer. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specific subcontracting plan for this contract is not detailed here. The absence of a direct set-aside means small businesses are unlikely to be the primary recipients of this contract's value, though they may participate as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are embedded within the contract's terms and conditions, including delivery schedules, performance specifications, and payment milestones. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be sensitive. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Department of the Army Aviation Programs
Light Utility Helicopters
Special Operations Aviation Platforms
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award may lead to higher costs.
Lack of competitive bidding limits price discovery.
Potential for vendor lock-in for sustainment and upgrades.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.8 million to BELL TEXTRON INC. PREDOMINANT - BELL 407 HELICOPTERS

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 Army).

What is the total obligated amount?

The obligated amount is $58.8 million.

What is the period of performance?

Start: 2009-04-27. End: 2012-09-30.

What is the track record of Bell Textron Inc. in delivering similar helicopter platforms to the DoD?

Bell Textron Inc. has a long and established history as a major helicopter manufacturer, supplying numerous platforms to the U.S. military and other government agencies for decades. They are known for producing a wide range of helicopters, including the Huey, Cobra, and V-22 Osprey, among others. Their track record with the Bell 407 specifically includes civilian and some military applications, often for training, light utility, or special mission roles. While specific performance metrics for past contracts are not detailed here, Bell Textron is generally considered a reliable supplier with extensive experience in aerospace manufacturing and defense contracting. Their ability to meet stringent military specifications and delivery schedules is a key factor in their continued success in securing such contracts.

How does the per-unit cost of the Bell 407 helicopters under this contract compare to market rates or similar government procurements?

Determining the precise per-unit cost is challenging without knowing the exact configuration, quantity, and any associated support or training packages included in the $58.8 million total award. However, the Bell 407 is generally positioned as a light utility helicopter. Civilian market prices for a new Bell 407 can range from $2.5 million to $3.5 million, depending on customization. For government procurements, especially those involving specialized military modifications, training, and support, the cost per unit can be significantly higher. Given this contract was sole-source, it is plausible that the per-unit cost is at the higher end of the spectrum compared to what might be achieved in a competitive bidding environment. Without access to detailed pricing breakdowns or comparable sole-source military contracts for similar platforms, a definitive benchmark is difficult to establish.

What are the primary risks associated with a sole-source award for specialized aircraft like the Bell 407?

The primary risk associated with a sole-source award for specialized aircraft like the Bell 407 is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government has limited leverage to negotiate the lowest possible price. Another risk is vendor lock-in, where the government becomes dependent on a single supplier for parts, maintenance, and future upgrades, potentially leading to higher long-term sustainment costs. Furthermore, if the sole-source provider experiences production issues, supply chain disruptions, or financial instability, it could significantly impact the delivery schedule and availability of critical assets. This reliance also reduces the incentive for the contractor to innovate or offer cost-saving improvements beyond what is contractually required.

What is the historical spending pattern for Bell 407 helicopters or similar light utility aircraft by the Department of Defense?

Historical spending on Bell 407 helicopters or similar light utility aircraft by the Department of Defense can be fragmented across various branches and specific program offices. While the Bell 407 is more commonly seen in civilian roles, military branches have procured them for specific missions such as training, observation, light transport, or special operations support. The Army, in particular, has utilized various light helicopters over the years. Analyzing historical spending would require delving into specific contract databases and program budgets for entities like the Army Aviation Command, Special Operations Command, and potentially other branches that might use such platforms. Without specific program data, it's difficult to provide a precise historical spending figure, but it's reasonable to assume that procurements of this nature, especially sole-source ones, are driven by specific, often evolving, operational requirements.

What are the implications of this contract for the broader aerospace and defense market, particularly regarding competition?

This contract, being a sole-source award to Bell Textron Inc., has limited direct implications for fostering broader competition within the light utility helicopter market for this specific requirement. It reinforces Bell's position as a key supplier for this type of platform within the defense sector. For other manufacturers of similar helicopters, it represents a missed opportunity to compete for a government contract. However, the existence of such contracts can indirectly influence the market by validating the capabilities and demand for certain aircraft types, potentially encouraging R&D and product development among competitors for future opportunities. The defense aerospace market is generally characterized by a few large, established players, and sole-source awards are not uncommon for highly specialized or proprietary systems.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ09R0115

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

Address: 600 EAST HURST BLVD, HURST, TX, 24

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: $129,113,394

Exercised Options: $58,762,914

Current Obligation: $58,762,914

Contract Characteristics

Cost or Pricing Data: YES

Timeline