DoD's $30.9M STELR Demo contract with Rolls-Royce for advanced turbine research shows strong R&D investment

Contract Overview

Contract Amount: $30,875,541 ($30.9M)

Contractor: Rolls-Royce North American Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2011-12-07

End Date: 2019-09-03

Contract Duration: 2,827 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST NO FEE

Sector: R&D

Official Description: SUPERSONIC TURBINE ENGINE FOR LONG RANGE (STELR) DEMO

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46241

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $30.9 million to ROLLS-ROYCE NORTH AMERICAN TECHNOLOGIES INC for work described as: SUPERSONIC TURBINE ENGINE FOR LONG RANGE (STELR) DEMO Key points: 1. Contract awarded for advanced turbine engine research, indicating a focus on next-generation aerospace capabilities. 2. The research and development nature of the contract suggests potential for significant technological advancements. 3. A single delivery order under a larger contract structure implies phased development or specific project milestones. 4. The duration of the contract (2827 days) points to a long-term research commitment. 5. The 'Cost No Fee' contract type suggests the government bears the financial risk, with the contractor reimbursed for allowable costs. 6. The absence of small business set-asides indicates the scale and specialized nature of the research.

Value Assessment

Rating: fair

Benchmarking the value of this specific R&D contract is challenging due to its specialized nature and the 'Cost No Fee' structure, which shifts risk to the government. While the $30.9 million investment is substantial for a single R&D project, its ultimate value will be determined by the technological breakthroughs achieved. Comparing it to similar advanced propulsion research efforts would provide better context, but such data is often proprietary or not publicly available in a directly comparable format.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. However, the data indicates this was a single delivery order, meaning the competition likely occurred at the broader contract level, not necessarily for this specific order. The number of bidders for the original contract is not specified, but full and open competition generally promotes a wider range of proposals and potentially better pricing.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a competitive environment that can lead to more cost-effective solutions and innovation.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, seeking to advance long-range aircraft propulsion technology. The contract delivers research and development services focused on a supersonic turbine engine for long-range applications. The geographic impact is primarily within Indiana, where Rolls-Royce North American Technologies Inc. is located. Workforce implications include highly skilled engineers and researchers in the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' contract type places the financial risk of cost overruns on the government, which could be a concern if research proves more expensive than anticipated.
The long duration of the contract (2827 days) increases the potential for scope creep or evolving technological requirements that may not be fully captured in the initial award.
Limited public information on the specific performance metrics and milestones makes it difficult to assess progress and value realization.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process and potential for innovation.
The contract supports critical research and development for advanced military capabilities, aligning with national defense objectives.
Rolls-Royce is a well-established aerospace manufacturer with a strong track record in engine development, indicating a capable contractor.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced physical sciences and engineering related to aerospace propulsion. The market for advanced turbine engine technology is highly specialized, dominated by a few major players like Rolls-Royce and GE Aviation. Government investment in this area is crucial for maintaining technological superiority and developing next-generation defense platforms. Comparable spending benchmarks are difficult to ascertain due to the proprietary nature of R&D and the unique specifications of advanced engine programs.

Small Business Impact

The contract was not set aside for small businesses, which is typical for large-scale, specialized R&D projects requiring extensive resources and established expertise. There is no indication of subcontracting requirements for small businesses within the provided data. This suggests the primary focus is on the prime contractor's capabilities, potentially limiting direct opportunities for smaller firms in this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force, likely through program managers and contracting officers responsible for R&D initiatives. Accountability measures would be tied to the achievement of research milestones and deliverables outlined in the contract. Transparency is limited due to the classified or sensitive nature of advanced defense R&D, but progress reports and financial audits would be standard oversight mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Turbine Engine Program (ATEP)
Hypersonic Technology
Aerospace Propulsion Research
Defense Research and Development Contracts
Next Generation Air Dominance (NGAD)

Risk Flags

Cost Risk (Cost No Fee)
Long-Term R&D Uncertainty
Technological Obsolescence Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.9 million to ROLLS-ROYCE NORTH AMERICAN TECHNOLOGIES INC. SUPERSONIC TURBINE ENGINE FOR LONG RANGE (STELR) DEMO

Who is the contractor on this award?

The obligated recipient is ROLLS-ROYCE NORTH AMERICAN TECHNOLOGIES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $30.9 million.

What is the period of performance?

Start: 2011-12-07. End: 2019-09-03.

What is the specific technological objective of the STELR Demo contract?

The STELR (SUPERSONIC TURBINE ENGINE FOR LONG RANGE) DEMO contract aims to research and develop advanced turbine engine technology suitable for long-range, high-speed aircraft. While specific technical details are often proprietary in defense R&D, the objective is generally to explore novel designs, materials, and operational concepts that can enable future supersonic or hypersonic platforms. This could involve improvements in fuel efficiency, thrust generation, thermal management, and overall engine performance under demanding flight conditions. The 'Demo' designation suggests a focus on proving the feasibility and potential of these advanced concepts through prototypes or simulations.

How does the 'Cost No Fee' contract type impact risk and contractor incentive?

The 'Cost No Fee' (CNF) contract type means the government agrees to reimburse the contractor for all allowable costs incurred in performing the contract, but the contractor receives no fee or profit. This structure places the primary financial risk on the government, as it bears the full cost of the effort, regardless of the outcome. For the contractor, the incentive is not profit-driven but rather focused on fulfilling the contract requirements and potentially securing future work based on successful performance. This type of contract is often used for research and development efforts where the final outcome is uncertain, and the government wants to encourage exploration without the contractor being overly risk-averse due to potential profit loss.

What is the significance of the contract's duration (2827 days)?

A contract duration of 2827 days, approximately 7.75 years, signifies a substantial, long-term commitment to the research and development of the STELR technology. Such extended timelines are characteristic of complex R&D projects that require iterative design, testing, and refinement. This duration suggests that the project is intended to explore fundamental technological challenges and mature a concept over an extended period, rather than a short-term demonstration. It also implies that the government anticipates significant advancements and potential breakthroughs that will take considerable time to achieve and validate.

Can the value of this $30.9 million R&D contract be benchmarked against similar projects?

Benchmarking the $30.9 million value of the STELR Demo contract against similar R&D projects is challenging due to several factors. Firstly, advanced aerospace propulsion R&D is a highly specialized field with limited publicly available data on project costs. Secondly, the specific objectives and technological scope of the STELR project may be unique. Thirdly, contract types like 'Cost No Fee' and the nature of R&D make direct cost comparisons difficult, as value is tied to potential future capabilities rather than immediate deliverables. While Rolls-Royce is a major player, the exact cost-effectiveness relative to industry norms for such advanced research is not readily quantifiable from public records.

What are the potential implications of this contract for future military aviation capabilities?

This contract has significant potential implications for future military aviation capabilities by investing in the foundational technology for advanced turbine engines. Success in the STELR Demo could pave the way for the development of next-generation aircraft platforms that are faster, have longer ranges, and potentially possess enhanced maneuverability. This aligns with strategic goals for air dominance and power projection. The research could influence the design of future fighter jets, bombers, or reconnaissance aircraft, ensuring the U.S. maintains a technological edge in aerospace propulsion systems critical for national security.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rolls-Royce Holdings PLC (UEI: 217127290)

Address: 2001-2059 S TIBBS AVE, INDIANAPOLIS, IN, 46241

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $33,175,541

Exercised Options: $33,175,541

Current Obligation: $30,875,541

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865009D2921

IDV Type: IDC

Timeline