Air Force awards $13M engine contract to Rolls-Royce for B-52 CERP, ensuring bomber fleet readiness

Contract Overview

Contract Amount: $13,063,038 ($13.1M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2025-12-22

End Date: 2027-09-30

Contract Duration: 647 days

Daily Burn Rate: $20.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: B52-J COMMERCIAL ENGINE REPLACEMENT PROGRAM (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 $13.1 million to ROLLS-ROYCE CORPORATION for work described as: B52-J COMMERCIAL ENGINE REPLACEMENT PROGRAM (CERP) ENGINE CONTRACT, TINKER AFB, OK Key points: 1. Contract value represents a significant investment in maintaining the B-52 bomber fleet's operational capability. 2. Sole awardee suggests a specialized capability or a highly competitive initial selection process. 3. Long-term contract duration indicates a sustained need for engine support and potential for follow-on work. 4. Firm Fixed Price contract type shifts cost risk to the contractor, potentially stabilizing program expenses. 5. The contract aligns with broader modernization efforts for aging strategic assets. 6. Geographic location of awardee (Indiana) may have implications for regional economic impact and workforce.

Value Assessment

Rating: good

The contract value of $13.06 million for engine support appears reasonable given the critical nature of the B-52 bomber fleet and the specialized components involved. Benchmarking against similar large-scale aerospace sustainment contracts is challenging without more granular data on specific engine models and service scope. However, the firm fixed-price structure suggests an effort to control costs. The historical data point of $20.19 million in 2019 for related work indicates a potentially lower current award value, which could signal improved pricing or a different scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. While the specific number of bidders is not provided, this competitive approach is generally expected to yield favorable pricing and innovative solutions for the government. The selection of a single awardee from this competitive pool suggests Rolls-Royce offered the most advantageous proposal based on technical merit, price, and other factors.

Taxpayer Impact: Full and open competition maximizes the potential for taxpayer savings by encouraging a wide range of offers and driving down prices through market forces.

Public Impact

The primary beneficiaries are the U.S. Air Force and the national defense infrastructure, ensuring the continued operational readiness of the B-52 bomber fleet. Services delivered include the provision of commercial engines, crucial for the sustainment and modernization of strategic airpower. The geographic impact is national, supporting a key component of U.S. strategic deterrence, with potential localized economic benefits in Indiana where the contractor is based. Workforce implications include the potential for skilled jobs in aerospace engineering, manufacturing, and maintenance within Rolls-Royce and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical issues arise despite the fixed-price structure.
Dependence on a single contractor for critical engine components could pose supply chain risks.
Long-term sustainment needs may exceed initial contract estimates, requiring future funding adjustments.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Full and open competition suggests a robust selection process and potential for best value.
Award to an established manufacturer like Rolls-Royce indicates a high likelihood of technical success.
Contract duration aligns with the expected service life of the B-52 fleet's modernization phase.

Sector Analysis

This contract falls within the aerospace manufacturing and defense sector, specifically focusing on aircraft engine sustainment. The market for military aircraft engine support is highly specialized, dominated by a few major manufacturers. The B-52 CERP is a critical program for maintaining one of the U.S.'s most enduring strategic assets. Comparable spending benchmarks would likely involve other large-scale sustainment contracts for major weapon systems, where costs can run into hundreds of millions or billions over the life cycle.

Small Business Impact

The provided data indicates that small business participation is not a primary focus of this specific contract award (ss: false, sb: false). While Rolls-Royce Corporation may engage small businesses in its supply chain, there is no explicit set-aside for small businesses or mandated subcontracting goals evident in this award notice. This suggests that the primary contract is likely too specialized or large in scope to be effectively competed among small businesses, or that the government did not prioritize small business set-asides for this particular requirement.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices at Tinker Air Force Base. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified engines and services within the agreed-upon price. Transparency is facilitated through contract award databases, though detailed performance metrics and cost breakdowns may be considered sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

B-52 Bomber Modernization Programs
Air Force Aircraft Engine Sustainment
Strategic Deterrence Programs
Commercial Engine Manufacturing Contracts
Defense Logistics Agency Support Contracts

Risk Flags

Long-term sustainment requirement
Critical component for strategic asset
Sole awardee from competition
Potential supply chain dependencies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.1 million to ROLLS-ROYCE CORPORATION. B52-J COMMERCIAL ENGINE REPLACEMENT PROGRAM (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 $13.1 million.

What is the period of performance?

Start: 2025-12-22. End: 2027-09-30.

What is the historical spending trend for B-52 engine sustainment by the Air Force?

Historical spending on B-52 engine sustainment has been substantial, reflecting the age and operational demands placed on the fleet. While specific figures for engine-only sustainment are often embedded within broader program costs, the data indicates a prior related award of $20.19 million in 2019. This suggests that annual or periodic investments in engine maintenance, repair, and replacement are significant. The current $13.06 million award for the CERP engine contract, spanning over two years, represents a focused investment in a critical component. Over the life cycle of the B-52, which is expected to extend well beyond 2050, total sustainment costs, including engines, are projected to be in the billions of dollars. Analyzing trends requires looking at the cumulative spending across multiple contracts and fiscal years, factoring in inflation and evolving maintenance strategies.

How does the pricing of this Rolls-Royce contract compare to similar commercial engine contracts for other military aircraft?

Direct price comparison is challenging due to the unique nature of the B-52's engine (TF33) and the specific scope of this contract (CERP engine contract). However, Rolls-Royce is a major supplier for various military and commercial aircraft. For comparable large turbofan engines on other platforms, unit costs can range widely from hundreds of thousands to several million dollars per engine, depending on thrust, technology, and support package. The $13.06 million award, likely covering multiple engines or a significant portion of the fleet's engine needs over its duration, suggests a substantial per-unit cost when amortized. Benchmarking against contracts for engines on aircraft like the C-17 (Pratt & Whitney F117) or F-35 (Pratt & Whitney F135) would require detailed analysis of engine type, thrust class, and the specific services included (e.g., spare parts, overhaul, technical support). The firm fixed-price nature aims to cap these costs for the government.

What are the key performance indicators (KPIs) expected for this engine contract, and how will they be measured?

While specific KPIs are not detailed in the award abstract, typical performance indicators for aircraft engine sustainment contracts include engine reliability (e.g., Mean Time Between Failures - MTBF), availability rates (ensuring engines are ready when needed), turnaround time for repairs and overhauls, and adherence to delivery schedules for parts and services. The Air Force will likely monitor these through contractor performance reports, joint technical reviews, and operational data from the B-52 fleet. Meeting stringent reliability and availability targets is crucial for maintaining the operational readiness of the B-52 bomber wing. Failure to meet these KPIs could result in contractually defined remedies, such as performance-based payments or penalties, depending on the contract's specific clauses.

What is the track record of Rolls-Royce Corporation in fulfilling large defense contracts, particularly for engine sustainment?

Rolls-Royce Corporation has a long and extensive track record in supplying and sustaining engines for both military and commercial aviation globally. They are a key player in the defense sector, providing engines for numerous platforms, including the B-52 (historically), C-130 variants, V-22 Osprey, and fighter jets. Their experience encompasses design, manufacturing, and comprehensive lifecycle support. While major defense contractors can face challenges, Rolls-Royce generally has a reputation for technical competence in engine technology. Past performance evaluations, often documented in government databases, would provide a more granular view of their success rates, on-time delivery, and cost performance on previous, similar contracts. Their selection for the B-52 CERP underscores their perceived capability to handle this critical and long-term sustainment requirement.

What are the potential risks associated with the long duration (647 days) of this contract?

The 647-day duration (approximately 21 months) for this delivery order presents several potential risks. Firstly, economic fluctuations, such as inflation or changes in raw material costs, could impact the contractor's profitability under a fixed-price agreement if not adequately accounted for in the initial pricing. Secondly, technological advancements in engine maintenance or component manufacturing could emerge during the contract period, potentially making the current approach suboptimal or requiring costly modifications. Thirdly, geopolitical events or global supply chain disruptions could affect the availability of necessary parts or specialized labor, leading to delays. Finally, personnel turnover within the contractor's organization could lead to a loss of institutional knowledge, impacting performance. The government mitigates some of these risks through contract clauses and ongoing oversight.

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: $13,063,038

Exercised Options: $13,063,038

Current Obligation: $13,063,038

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810721D0001

IDV Type: IDC

Timeline