DoD's $34.5M Huey II Aircraft Purchase: Sole Source Acquisition Raises Value Concerns

Contract Overview

Contract Amount: $34,484,728 ($34.5M)

Contractor: Bell Textron Inc

Awarding Agency: Department of Defense

Start Date: 2016-09-26

End Date: 2018-12-31

Contract Duration: 826 days

Daily Burn Rate: $41.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PURCHASE AND DELIVERY OF 5 HUEY II AIRCRAFTS AND ALL REQUIRED SPARES.

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76118

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $34.5 million to BELL TEXTRON INC for work described as: PURCHASE AND DELIVERY OF 5 HUEY II AIRCRAFTS AND ALL REQUIRED SPARES. Key points: 1. The acquisition of five Huey II aircraft and associated spares was awarded on a sole-source basis, limiting price discovery and potentially impacting value for money. 2. The contract's firm-fixed-price structure provides cost certainty for the government but may not fully capture potential savings from competitive bidding. 3. The duration of the contract (826 days) suggests a significant integration and delivery timeline for these specialized aircraft. 4. The purchase falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicating a niche within the broader aerospace sector. 5. The absence of small business set-asides or subcontracting plans suggests this contract primarily involved a large prime contractor.

Value Assessment

Rating: questionable

The sole-source nature of this contract prevents a direct comparison to similar competitive procurements, making a definitive value-for-money assessment challenging. While the firm-fixed-price contract offers cost certainty, the lack of competition means the government did not benefit from potential price reductions that could arise from a bidding process. Benchmarking the unit price against market rates for comparable aircraft and spare parts would be necessary to ascertain if the $34.5 million expenditure represents a fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically reserved for situations where only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means there were no other bidders to compare against, and the government did not have the opportunity to solicit the best possible pricing through a competitive process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, as the contractor faced no direct incentive to lower their price to win the contract.

Public Impact

The Department of Defense is the primary beneficiary, acquiring critical rotary-wing aircraft for operational needs. The contract delivers five Huey II aircraft and essential spare parts, enhancing the military's aviation capabilities. The contract was awarded to a Texas-based entity, potentially impacting the local economy through associated business activities. The acquisition supports the military's operational readiness and ability to conduct missions requiring versatile helicopter platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential taxpayer savings.
Lack of transparency in the procurement process due to non-competitive nature.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Acquisition of specific, potentially specialized, Huey II aircraft meets a defined military need.
Contract awarded to a known entity in the aerospace manufacturing sector.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government procurement. The manufacturing of specialized aircraft like the Huey II falls within a niche segment of this industry. Bell Textron Inc. is a major player in this market. The total market for military aircraft is substantial, with significant annual spending by governments worldwide. This contract represents a small portion of that overall market, but its sole-source nature is a common point of analysis within the sector's procurement practices.

Small Business Impact

This contract does not appear to have included any small business set-aside provisions, nor is there information indicating subcontracting goals for small businesses. The award to Bell Textron Inc., a large aerospace manufacturer, suggests that the primary focus was on the prime contractor's capabilities. This lack of small business involvement means that the contract did not directly contribute to the small business ecosystem within the defense aerospace supply chain for this specific procurement.

Oversight & Accountability

The contract was awarded by the Department of Defense, overseen by the Defense Contract Management Agency. As a firm-fixed-price contract, the primary oversight would focus on delivery schedules, quality standards, and adherence to contract terms. Transparency is limited due to the sole-source nature of the award. There is no specific mention of Inspector General involvement for this particular contract, though broader DoD oversight mechanisms would apply.

Related Government Programs

Military Aircraft Procurement
Rotary-Wing Aircraft
Defense Logistics Agency
Bell Helicopters
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.5 million to BELL TEXTRON INC. PURCHASE AND DELIVERY OF 5 HUEY II AIRCRAFTS AND ALL REQUIRED SPARES.

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 $34.5 million.

What is the period of performance?

Start: 2016-09-26. End: 2018-12-31.

What is the track record of Bell Textron Inc. in delivering Huey II aircraft and related services to the U.S. military?

Bell Textron Inc. has a long-standing history with the Huey platform, dating back to the original Huey helicopters used extensively by the U.S. military. The Huey II is an upgraded version of the Vietnam-era UH-1 Iroquois, featuring modernized engines, transmissions, and avionics. Bell Textron has been involved in the production, upgrade, and support of these aircraft for various military and civilian operators. Their track record generally indicates a capability to produce and deliver these types of helicopters, though specific performance metrics for individual contracts, such as on-time delivery and adherence to budget for past Huey II procurements, would require detailed contract-level analysis beyond the scope of this summary.

How does the per-unit cost of these Huey II aircraft compare to similar procurements or market benchmarks?

A precise per-unit cost comparison is difficult without knowing the exact breakdown of the $34.5 million between aircraft and spares, and without access to competitive bidding data. However, if we assume the $34.5 million is primarily for the five aircraft, that would place the approximate cost per aircraft at around $6.9 million. This figure needs to be benchmarked against market prices for new or refurbished Huey IIs, as well as against other comparable utility helicopters. Given the sole-source nature of this award, it is plausible that the price may be higher than what could have been achieved through a competitive process. Further analysis would require access to detailed pricing data and market intelligence on similar aircraft sales.

What are the primary risks associated with a sole-source acquisition of this nature?

The primary risk associated with a sole-source acquisition is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not secure the best possible value for its expenditure. Another risk is reduced transparency in the procurement process, making it harder to scrutinize the justification for the sole-source award and the reasonableness of the price. Furthermore, sole-source contracts can sometimes indicate a lack of market availability or a reliance on a single supplier, which can create long-term dependency and potential supply chain vulnerabilities. Ensuring adequate justification and fair pricing in such cases is critical for effective stewardship of taxpayer funds.

What is the expected program effectiveness and operational impact of acquiring these five Huey II aircraft?

The acquisition of five Huey II aircraft is expected to enhance the Department of Defense's rotary-wing aviation capabilities. The Huey II is known for its versatility, reliability, and relatively lower operating costs compared to some newer helicopter models, making it suitable for various missions including troop transport, utility, and light attack roles. These aircraft can provide crucial support for ground operations, reconnaissance, and logistical movements. The addition of five such platforms would likely bolster operational readiness, potentially replacing aging assets or expanding the fleet's capacity to meet mission demands. The specific impact will depend on the intended roles and deployment locations for these aircraft.

How does this contract's spending compare to historical U.S. military spending on Huey variants or similar aircraft?

Historical U.S. military spending on Huey variants is extensive, spanning decades and involving thousands of aircraft. The original UH-1 Huey program alone represented billions of dollars in procurement and sustainment over its service life. Modernized versions like the Huey II continue to be procured or upgraded by various branches of the U.S. military and allied nations. The $34.5 million for five Huey IIs represents a specific, relatively modest investment within the broader context of military aviation procurement. Comparing this to historical spending requires looking at inflation-adjusted figures and the scale of past procurements, which were often much larger in quantity and total dollar value. This contract is a single acquisition event, whereas historical spending often involved multi-year, large-scale programs.

What are the implications of the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code for this contract?

The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicates that the primary business activity related to this contract falls within the manufacturing of components and accessories for aircraft, rather than the assembly of complete aircraft (which might fall under a different code like 336411, 'Aircraft Manufacturing'). This suggests that while the contract is for Huey II aircraft, the classification might emphasize the manufacturing of specific parts, systems, or auxiliary equipment integral to those aircraft, or perhaps the refurbishment and upgrade of existing airframes with new components. It highlights a specific segment of the aerospace supply chain involved in this procurement.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ16R0197

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: $34,484,728

Exercised Options: $34,484,728

Current Obligation: $34,484,728

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Timeline