DoD spent $23.2M on two Bell 412 helicopters from Bell Textron Inc., a sole-source acquisition

Contract Overview

Contract Amount: $23,177,351 ($23.2M)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 2010-04-23

End Date: 2012-04-30

Contract Duration: 738 days

Daily Burn Rate: $31.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE OF 2 BELL 412 HELICOPTERS

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76118

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $23.2 million to BELL TEXTRON INC for work described as: PURCHASE OF 2 BELL 412 HELICOPTERS Key points: 1. The acquisition of two helicopters represents a significant investment in specialized aviation assets. 2. Sole-source procurement limits competitive pressure, potentially impacting overall value for money. 3. The fixed-price contract structure aims to control costs, but the absence of competition raises questions about optimal pricing. 4. The duration of the contract (738 days) suggests a need for timely delivery and integration of these assets. 5. The purchase falls under Aircraft Manufacturing, indicating a focus on acquiring new, specialized equipment rather than services. 6. The lack of small business involvement in this sole-source contract means limited opportunities for smaller enterprises.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source acquisitions of similar aircraft. The fixed price of $23.2 million for two helicopters suggests a per-unit cost of $11.6 million. Given the specialized nature of military-grade helicopters, this price may be within a reasonable range, but the lack of competition prevents a definitive assessment of whether it represents the best possible value. Without competitive bids, it's difficult to ascertain if the pricing reflects market rates or if there's an opportunity for cost savings.

Cost Per Unit: Approximately $11.6 million per helicopter.

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Bell Textron Inc., was solicited. This approach is typically used when a unique product or service is required, or when only one responsible source is available. The absence of competition means that taxpayers did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium due to the lack of competitive pressure to drive down prices.

Public Impact

The Department of Defense is the primary beneficiary, acquiring critical aviation assets. The services delivered are the acquisition of two specific helicopter models, likely for operational or support roles. The geographic impact is primarily tied to the operational deployment of these helicopters by the DoD, with manufacturing occurring in Texas. Workforce implications include jobs in aircraft manufacturing and maintenance, both at the contractor and potentially within the DoD.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential value for money.
Lack of transparency in pricing due to absence of competitive bids.
Potential for higher costs compared to a competed acquisition.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Acquisition of specific, potentially critical, aviation assets for defense needs.
Manufacturing located within the United States (Texas).

Sector Analysis

The acquisition of aircraft falls within the broader aerospace and defense manufacturing sector. This sector is characterized by high technological complexity, significant R&D investment, and often involves specialized government contracts. Bell Textron Inc. is a major player in this industry. The market for military helicopters is relatively concentrated, with a few key manufacturers dominating. The price of $11.6 million per unit, while substantial, needs to be viewed in the context of specialized military aviation equipment, which can command premium pricing due to stringent performance, safety, and technological requirements.

Small Business Impact

This contract was not competed and did not include small business set-asides. As a sole-source award to a large manufacturer, there are no direct subcontracting opportunities for small businesses stemming from this specific contract. This limits the participation of the small business ecosystem in this particular procurement.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration services to ensure compliance with terms and conditions. Oversight would typically involve monitoring delivery schedules, quality control, and payment processes. Transparency is limited due to the sole-source nature, with less public visibility into the negotiation and pricing justification compared to a competed contract. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Contract Awards
Aircraft Procurement
Helicopter Manufacturing
Sole-Source Contracts
Bell Helicopters

Risk Flags

Sole-source procurement
Lack of competition
Potential for inflated pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.2 million to BELL TEXTRON INC. PURCHASE OF 2 BELL 412 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $23.2 million.

What is the period of performance?

Start: 2010-04-23. End: 2012-04-30.

What is Bell Textron Inc.'s track record with the Department of Defense for similar helicopter acquisitions?

Bell Textron Inc. has a long-standing relationship with the Department of Defense, supplying various rotary-wing aircraft for decades. Their track record includes numerous contracts for different helicopter models, ranging from training aircraft to attack and utility helicopters. For the Bell 412 specifically, the DoD has procured these aircraft in the past, often for special operations, utility transport, or training roles. While specific data on prior 412 acquisitions in this exact configuration and quantity might require deeper database analysis, Bell's general history with the DoD is extensive, marked by both successful deliveries and occasional performance-related discussions common in large-scale defense contracting. Their ability to manufacture and deliver complex aircraft is well-established, though the specifics of pricing and value on any given contract depend heavily on the competitive environment and the unique requirements of the acquisition.

How does the $11.6 million per-unit cost compare to market rates for similar helicopters, considering it was a sole-source acquisition?

Determining precise market rates for military-grade helicopters, especially when acquired via sole-source contracts, is complex. The $11.6 million per-unit cost for the Bell 412 in this 2010 acquisition needs to be contextualized. Civilian versions of the Bell 412 have historically ranged from $5 million to $10 million, depending on configuration and avionics. However, military variants often include enhanced survivability features, specialized communication and navigation systems, weapons integration capabilities (even if not initially armed), and more robust airframes, all of which increase the price. The sole-source nature of this contract means the government did not benefit from competitive bidding, which typically drives prices down. Therefore, while $11.6 million might seem high compared to civilian models, it could be within a reasonable range for a military-specific configuration, but without competitive data, it's impossible to definitively state if it represents optimal value or if the price was inflated due to the lack of competition.

What are the primary risks associated with sole-source procurements like this one?

The primary risks associated with sole-source procurements are centered around cost and competition. Without competing bids, the government loses the opportunity to leverage market forces to achieve the lowest possible price. This can lead to paying a premium for goods or services. There's also a risk of reduced innovation, as the incumbent contractor may have less incentive to improve efficiency or offer advanced solutions when they are the only option. Furthermore, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single supplier, potentially creating vendor lock-in and making future procurements more difficult or expensive. For taxpayers, the main risk is financial: potentially overpaying for necessary assets due to the absence of competitive pressure.

What is the expected program effectiveness or utility of acquiring two Bell 412 helicopters for the Department of Defense?

The Bell 412 is a versatile medium-lift helicopter known for its reliability and adaptability, making it suitable for a range of military missions. Acquiring two such aircraft likely enhances the DoD's capabilities in areas such as troop transport, cargo movement, search and rescue operations, medical evacuation (MEDEVAC), or special operations support. The utility is derived from the helicopter's payload capacity, range, and ability to operate in diverse environmental conditions. The effectiveness of the program hinges on how well these helicopters are integrated into existing operational plans, the quality of maintenance and support, and the specific missions they are assigned. Having two units provides redundancy and allows for simultaneous operations or mission flexibility.

How does this $23.2 million expenditure compare to the DoD's overall annual spending on aircraft procurement?

The $23.2 million expenditure for two Bell 412 helicopters represents a very small fraction of the Department of Defense's overall annual budget for aircraft procurement. The DoD's aircraft procurement budget typically runs into the tens of billions of dollars annually, encompassing a wide array of fixed-wing aircraft, helicopters, drones, and associated systems for all branches of the military. For instance, major programs like the F-35 fighter jet program alone involve hundreds of billions of dollars over their lifecycle. Therefore, while $23.2 million is a significant sum for a single contract, in the context of the DoD's vast aerospace acquisition portfolio, it is a relatively modest investment focused on acquiring a specific, limited number of utility or special-purpose helicopters.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ10R0157

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Textron Inc (UEI: 001338979)

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: $23,177,351

Exercised Options: $23,177,351

Current Obligation: $23,177,351

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline