Air Force awards $39.2M contract for B-52 engine sustainment to Rolls-Royce Corporation

Contract Overview

Contract Amount: $39,182,816 ($39.2M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2024-03-07

End Date: 2027-07-31

Contract Duration: 1,241 days

Daily Burn Rate: $31.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: B-52 CERP ENGINE CONTRACT, TINKER AFB OK

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $39.2 million to ROLLS-ROYCE CORPORATION for work described as: B-52 CERP ENGINE CONTRACT, TINKER AFB OK Key points: 1. Contract focuses on sustainment of critical B-52 bomber engines, ensuring operational readiness. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Firm-fixed-price contract type aims to control costs and provide predictability. 4. Long-duration contract (over 3 years) indicates a sustained need for these services. 5. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 6. Rolls-Royce Corporation is the incumbent provider, likely leveraging existing expertise.

Value Assessment

Rating: good

The contract value of $39.2 million for engine sustainment over approximately 3.5 years appears reasonable given the critical nature of B-52 bomber engines. Benchmarking against similar complex aerospace sustainment contracts is challenging without more specific service details. However, the firm-fixed-price structure suggests an effort to manage costs effectively. The award to a known incumbent with specialized knowledge in these engines also points towards a potentially efficient use of funds, assuming competitive pricing was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages multiple companies to offer their best terms. The Air Force's decision to use full and open competition suggests confidence in the market's ability to provide competitive solutions for B-52 engine sustainment.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government receives the best value for its investment in critical defense assets.

Public Impact

The primary beneficiaries are the U.S. Air Force and its B-52 bomber fleet, ensuring the continued operational capability of these strategic aircraft. Services delivered include sustainment, maintenance, and potentially repair of B-52 bomber engines. The contract has a geographic impact centered around Tinker Air Force Base, Oklahoma, a key hub for aircraft sustainment. Workforce implications include the potential for skilled labor employment at Rolls-Royce facilities, particularly in Indiana where the contractor is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical issues arise with aging engines, despite the firm-fixed-price structure.
Dependence on a single contractor for critical engine sustainment could pose long-term supply chain risks.
Limited visibility into the specific maintenance procedures and parts used without detailed reporting requirements.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Award to an experienced incumbent (Rolls-Royce) suggests a high likelihood of successful execution.
Full and open competition indicates a robust market assessment was likely performed.
Long contract duration allows for stable planning and resource allocation for sustainment.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine sustainment. The market for military aircraft engine maintenance and repair is highly specialized, dominated by original equipment manufacturers like Rolls-Royce. Spending in this area is critical for maintaining the readiness of aging fleets, such as the B-52, which requires continuous support to remain operational. Comparable spending benchmarks would typically involve other sustainment contracts for major weapon systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large, complex sustainment contract likely requiring specialized engineering and manufacturing capabilities, it is typical for such awards to go to prime contractors with extensive experience. Subcontracting opportunities for small businesses may exist within the supply chain for specific parts or services, but the primary award is not directed towards them.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force, with specific oversight personnel assigned to monitor performance, adherence to contract terms, and financial expenditures. The firm-fixed-price nature of the contract provides a degree of accountability by capping costs. Transparency is generally maintained through contract award databases and reporting requirements, though specific maintenance details may be proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

B-52 Bomber Modernization Programs
Air Force Aircraft Engine Maintenance and Repair
Strategic Bomber Sustainment Contracts
Defense Logistics Agency (DLA) Aviation Support

Risk Flags

Aging Aircraft Component Obsolescence
Long-Term Sustainment Cost Uncertainty
Dependence on Single Source for Critical Parts
Potential for Unforeseen Maintenance Requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.2 million to ROLLS-ROYCE CORPORATION. B-52 CERP ENGINE CONTRACT, TINKER AFB OK

Who is the contractor on this award?

The obligated recipient is ROLLS-ROYCE CORPORATION.

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 $39.2 million.

What is the period of performance?

Start: 2024-03-07. End: 2027-07-31.

What is Rolls-Royce Corporation's track record with B-52 engine sustainment?

Rolls-Royce Corporation has a long-standing relationship with the U.S. Air Force concerning the B-52 bomber's TF33 engines. As the original equipment manufacturer, they possess unique expertise in the design, production, and maintenance of these engines. Their track record includes providing sustainment services for decades, ensuring the continued operation of the B-52 fleet. This includes managing the supply chain for parts, performing depot-level maintenance, and addressing obsolescence issues. The current contract builds upon this established history, leveraging their deep institutional knowledge and technical capabilities to support the aging aircraft.

How does the value of this contract compare to previous B-52 engine sustainment awards?

Direct comparison of this $39.2 million delivery order to previous B-52 engine sustainment awards requires access to historical contract data, which is not fully detailed here. However, sustainment costs for major weapon systems like the B-52 are typically substantial and span many years. The value of this specific delivery order reflects a portion of the overall sustainment effort over its 1241-day duration (approx. 3.4 years). Annual sustainment costs for such platforms can range from tens to hundreds of millions of dollars, depending on the scope of services, number of aircraft supported, and specific maintenance needs. This award appears to be a component of a larger, ongoing sustainment strategy.

What are the primary risks associated with sustaining the B-52's TF33 engines?

The primary risks associated with sustaining the B-52's TF33 engines stem from their age and the obsolescence of certain components. The TF33 engine entered service in the 1960s, meaning many parts are no longer in current production, increasing lead times and costs for replacements. Maintaining a sufficient supply of spare parts is a significant challenge. Furthermore, the engines require extensive maintenance to ensure reliability and safety, and unforeseen technical issues could lead to increased repair costs or operational delays. The long-term viability of the TF33 engine is also a consideration as the Air Force plans for the B-52's extended service life.

How effective is the firm-fixed-price contract type in managing costs for engine sustainment?

The firm-fixed-price (FFP) contract type is generally considered effective in managing costs for sustainment services like engine maintenance because it shifts the risk of cost overruns to the contractor. Under an FFP agreement, the contractor is obligated to perform the specified work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to be efficient and control their expenses. While FFP provides cost certainty for the government, it can sometimes lead to higher initial bid prices as contractors factor in potential risks. For complex sustainment where unforeseen issues can arise, careful scope definition and negotiation are crucial to ensure the FFP structure truly benefits the government.

What is the strategic importance of the B-52 bomber fleet to the U.S. Air Force?

The B-52 Stratofortress remains a cornerstone of the U.S. Air Force's strategic deterrence and power projection capabilities. Despite its age, the bomber's long range, payload capacity, and ability to carry both conventional and nuclear munitions make it a unique asset. It provides a visible and credible deterrent against potential adversaries and offers flexible response options in various global scenarios. The B-52 is capable of performing a wide range of missions, including strategic attack, close air support, maritime operations, and intelligence, surveillance, and reconnaissance. Its continued sustainment is critical for maintaining the U.S.'s strategic nuclear triad and global strike capabilities for decades to come.

Industry Classification

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

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rolls-Royce Holdings PLC

Address: 450 S MERIDIAN ST, INDIANAPOLIS, IN, 46225

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $39,182,816

Exercised Options: $39,182,816

Current Obligation: $39,182,816

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $205,352

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810721D0001

IDV Type: IDC

Timeline