DoD's $17.6M Bell Helicopter contract for airframe components shows limited competition and potential value concerns

Contract Overview

Contract Amount: $17,638,090 ($17.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2003-04-30

End Date: 2011-08-03

Contract Duration: 3,017 days

Daily Burn Rate: $5.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200309!3P4105!1700!JA101 !NAVAL INVENTORY CONTROL POINT !N0038397G002N !A!N! !N!0045 !20030430!20040922!062923321!062923321!001338979!N!BELL HELICOPTER TEXTRON, INC !600 E HURST BLVD !HURST !TX!76053!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000018449943!N!N!000000000000!1560!AIRFRAME STRUCTURAL COMPONENTS !A1A!AIRFRAMES AND SPARES !2AHD!AH-1J SEA COBRA !336413!E! !4! ! ! ! ! !99990909!B! ! !N!A!D!U!J!1!001!N!2A!A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! !N00383!0001! !

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79111

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $17.6 million to THE BOEING COMPANY for work described as: 200309!3P4105!1700!JA101 !NAVAL INVENTORY CONTROL POINT !N0038397G002N !A!N! !N!0045 !20030430!20040922!062923321!062923321!001338979!N!BELL HELICOPTER TEXTRON, INC !600 E HURST BLVD !HURST !TX!76053!27000!439!48!FORT WORTH !TARRA… Key points: 1. The contract was awarded on a sole-source basis, raising questions about price competitiveness. 2. A significant portion of the contract value was allocated to a single vendor, Bell Helicopter Textron, Inc. 3. The duration of the contract (over 8 years) suggests a long-term need for these components. 4. The Public Law 114-264 designation indicates a specific justification for the procurement method. 5. The contract falls under the 'Airframes and Spares' category, crucial for aircraft maintenance and readiness.

Value Assessment

Rating: questionable

The contract's value of $17.6 million for airframe structural components, awarded to Bell Helicopter Textron, Inc., warrants scrutiny due to the sole-source nature of the award. Without competitive bidding, it is difficult to benchmark the pricing against market rates or other potential suppliers. The extended duration of the contract (over 8 years) further emphasizes the need for assurance that the government is receiving fair value. While specific performance metrics are not detailed here, the lack of competition inherently limits the government's ability to negotiate the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Bell Helicopter Textron, Inc., was solicited. The data indicates a 'NOT COMPETED' status. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less price discovery and potentially higher costs for the government compared to fully competed contracts.

Taxpayer Impact: The lack of competition means taxpayers may have paid a premium for these airframe components, as there was no pressure from competing bids to drive down the price. This also limits the opportunity for new or smaller businesses to enter the supply chain for these critical parts.

Public Impact

The primary beneficiary is the U.S. Navy, which receives essential airframe structural components for its aircraft fleet. This contract supports the operational readiness and maintenance of specific helicopter models, likely including the AH-1J Sea Cobra. The contract's geographic impact is centered around Hurst, Texas, where Bell Helicopter Textron, Inc. is located, potentially supporting local jobs and the regional economy. It ensures the continued availability of critical spare parts, contributing to the overall effectiveness of naval aviation operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Long contract duration (over 8 years) may obscure opportunities for cost savings through re-competition or alternative solutions.
Lack of transparency regarding the specific justification for sole-sourcing makes it difficult to assess necessity.
The contract is for structural components, implying potential safety and operational criticality, making vendor reliability paramount.

Positive Signals

Award to an established prime contractor (Bell Helicopter Textron, Inc.) suggests a degree of reliability and existing expertise.
Firm Fixed Price contract type provides cost certainty for the government, assuming the scope is well-defined.
The contract supports critical defense needs, ensuring the availability of essential aircraft components.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and maintenance. The market for airframe structural components is often dominated by original equipment manufacturers (OEMs) like Bell Helicopter Textron, Inc., due to proprietary designs, technical specifications, and established supply chains. Spending benchmarks for such specialized components can vary widely based on the specific aircraft model, complexity, and volume. However, contracts of this magnitude for sole-source components often represent a significant investment in maintaining fleet readiness.

Small Business Impact

The provided data indicates this contract was not competed and does not appear to have specific small business set-aside provisions. Bell Helicopter Textron, Inc. is a large business. Without a competitive bidding process that includes small business participation goals or subcontracting requirements, the direct impact on the small business ecosystem for these specific components is likely minimal. However, large prime contractors are often required to meet broader subcontracting goals across their portfolio, which could indirectly benefit small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). The 'Public Law 114-264' designation suggests a specific legislative framework governing this procurement, which may include its own oversight provisions. Transparency is limited due to the sole-source nature, but contract modifications, delivery schedules, and payment milestones would typically be tracked. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Defense Logistics Agency (DLA) Aviation
Aircraft Parts and Components Procurement
Sole-Source Defense Contracts
Helicopter Maintenance and Sustainment

Risk Flags

Sole-source award
Lack of competitive bidding
Extended contract duration
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.6 million to THE BOEING COMPANY. 200309!3P4105!1700!JA101 !NAVAL INVENTORY CONTROL POINT !N0038397G002N !A!N! !N!0045 !20030430!20040922!062923321!062923321!001338979!N!BELL HELICOPTER TEXTRON, INC !600 E HURST BLVD !HURST !TX!76053!27000!439!48!FORT WORTH !TARRANT !TEXAS !+000018449943!N!N!000000000000!1560!AIRFRAME STRUCTURAL COMPONENTS !A1A!AIRFRAMES AND SPARES !2AHD!AH-1J SEA COBRA !336413!E! !4! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.6 million.

What is the period of performance?

Start: 2003-04-30. End: 2011-08-03.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and has a 'Public Law 114-264' designation. Public Law 114-264, also known as the National Defense Authorization Act for Fiscal Year 2017, contains provisions related to procurement. While the exact justification requires deeper investigation into the contract file and associated documentation (e.g., Justification and Approval document), sole-source awards are typically granted when only one responsible source can provide the required supplies or services, or when there is a compelling urgency, or when specific technological capabilities are unique to a single provider. Given the nature of specialized airframe components, it's plausible that Bell Helicopter Textron, Inc. is the sole authorized manufacturer or possesses unique technical expertise essential for these parts.

How does the $17.6 million contract value compare to similar procurements for airframe components?

Directly comparing the $17.6 million value is challenging without knowing the exact quantity, specific components, and aircraft model. However, the contract duration of over 8 years (from April 30, 2003, to August 3, 2011) suggests a substantial, long-term supply agreement. For sole-source contracts, especially those involving proprietary parts from an Original Equipment Manufacturer (OEM) like Bell Helicopter, the price is often determined through negotiation rather than competitive bidding. This means the value might be higher than if multiple suppliers were competing. Benchmarking would ideally involve comparing unit prices for similar components on other sole-source contracts or, if available, historical pricing data for these specific parts under previous agreements.

What are the primary risks associated with this sole-source contract?

The primary risk is the potential for overpayment due to the lack of price competition. Without competing bids, the government has less leverage to negotiate the lowest possible price. Another risk is vendor lock-in; the reliance on a single supplier for critical components can make the government vulnerable to price increases or supply disruptions. Furthermore, the extended duration of the contract might mean the government misses opportunities to adopt newer, potentially more cost-effective technologies or alternative solutions that could emerge during the contract period. Ensuring the quality and timely delivery of components is also a risk, though mitigated by the contractor's established presence.

What is the historical spending pattern for Bell Helicopter Textron, Inc. with the Department of Defense for similar components?

Analyzing historical spending requires access to broader contract databases. However, Bell Helicopter Textron, Inc. (now part of Textron Aviation) is a major defense contractor with a long history of supplying helicopters and parts to the U.S. military. It is highly probable that they have been a consistent supplier of airframe components for various helicopter platforms over many years. The $17.6 million awarded here represents a significant, but likely not isolated, investment in their products. Understanding their broader contract history, including competitive vs. sole-source awards and average pricing trends, would provide better context for this specific contract's value and necessity.

How does the Public Law 114-264 designation impact the contract's oversight and execution?

The 'Public Law 114-264' designation points to a specific legislative authority under which this contract was awarded. This implies that the procurement process adhered to the requirements outlined in that particular law, which might include specific justifications, reporting requirements, or limitations on competition. While the law itself doesn't inherently change standard contract oversight mechanisms (like monitoring performance, delivery, and payment), it provides the legal basis for the procurement method chosen. It suggests that the contracting officers followed a defined legal pathway, potentially related to specific defense needs or program requirements mandated by Congress. Further review of the law's text would clarify any unique oversight implications.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 25 GATE 6 BLDG 3, RIDLEY PARK, PA, 05

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline