DoD awards $208M to RTX Corp for F117 engine sustainment, facing limited competition

Contract Overview

Contract Amount: $208,152,480 ($208.2M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2017-10-01

End Date: 2018-09-30

Contract Duration: 364 days

Daily Burn Rate: $571.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F117 ENGINE SUSTAINMENT SUPPORT (ESS)

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $208.2 million to RTX CORPORATION for work described as: F117 ENGINE SUSTAINMENT SUPPORT (ESS) Key points: 1. Contract value of $208M for a single year of sustainment support. 2. Sole-source award indicates potential lack of market competition. 3. Firm-fixed-price contract type shifts risk to the contractor. 4. Awarded to RTX Corporation, a major defense contractor. 5. Sustainment support for F117 engines, critical for specific aircraft. 6. Geographic focus on Connecticut for contract performance.

Value Assessment

Rating: fair

The contract value of $208 million for one year of sustainment support for F117 engines appears substantial. Without specific benchmarks for F117 engine sustainment, it is difficult to definitively assess value for money. However, given the sole-source nature of the award, there is a risk that pricing may not reflect competitive market dynamics. Further analysis would require comparing this contract's unit costs or overall value to similar sustainment contracts for comparable engine types or to historical spending on this specific engine program.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when only one responsible source is available or when the agency determines it is not in the public interest to compete. The lack of competition limits the government's ability to explore alternative pricing and service models, potentially leading to higher costs than if multiple bidders were involved.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the government did not benefit from price reductions that often result from a competitive procurement process.

Public Impact

The primary beneficiaries are the U.S. Department of Defense, ensuring the operational readiness of aircraft powered by F117 engines. Services delivered include sustainment support, likely encompassing maintenance, repair, and parts for the engines. Geographic impact is concentrated in Connecticut, where the contractor RTX Corporation is based and likely performs the work. Workforce implications include employment for skilled technicians and engineers at RTX Corporation involved in engine sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition raises concerns about contractor performance incentives and innovation.
High contract value for a single year warrants scrutiny of efficiency and necessity.

Positive Signals

Firm-fixed-price contract structure transfers cost overrun risk to the contractor.
Sustainment support ensures critical operational readiness for defense assets.
Award to a large, established defense contractor may indicate reliability in meeting complex requirements.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technological requirements, and significant government spending. Contracts for engine sustainment are crucial for maintaining the operational readiness of military aircraft. This award to RTX Corporation for F117 engine sustainment fits within the broader category of aircraft parts and auxiliary equipment manufacturing, a segment that relies heavily on specialized expertise and long-term support agreements. Comparable spending benchmarks in this niche would involve analyzing other sustainment contracts for similar high-value aerospace components.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless RTX Corporation engages small businesses as subcontractors for specific components or services. Further investigation into subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and inspection agencies, such as the Defense Contract Management Agency (DCMA), which is listed as the servicing agency. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver services at an agreed-upon price. Transparency is generally limited for sole-source awards, but contract details and performance reports are usually available through official channels like the Federal Procurement Data System (FPDS).

Related Government Programs

F117 Engine Maintenance and Repair
Aerospace Engine Support Services
Department of Defense Aircraft Sustainment
Defense Contractor Logistics Support

Risk Flags

Sole-source award may indicate lack of competition, potentially leading to higher costs.
High contract value warrants scrutiny for efficiency and necessity.
Dependence on a single contractor for critical sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $208.2 million to RTX CORPORATION. F117 ENGINE SUSTAINMENT SUPPORT (ESS)

Who is the contractor on this award?

The obligated recipient is RTX CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $208.2 million.

What is the period of performance?

Start: 2017-10-01. End: 2018-09-30.

What is the historical spending trend for F117 engine sustainment support?

Analyzing historical spending on F117 engine sustainment is crucial for understanding cost trends and identifying potential anomalies. While the provided data details a single $208 million award for the period of October 1, 2017, to September 30, 2018, a comprehensive review would involve examining contract awards for this specific engine type over several preceding years. This would help determine if the current award represents an increase, decrease, or stable level of spending. It would also reveal if previous awards were also sole-source or competed, providing context for the current procurement strategy and its potential impact on cost-effectiveness. Understanding the historical context allows for a more informed assessment of whether the current spending aligns with established patterns or indicates a deviation requiring further investigation.

What specific services are included under 'F117 ENGINE SUSTAINMENT SUPPORT (ESS)'?

The term 'F117 ENGINE SUSTAINMENT SUPPORT (ESS)' broadly covers the ongoing maintenance, repair, and operational readiness activities required to keep the F117 engines functioning effectively. This typically includes scheduled and unscheduled maintenance, component repair and overhaul, spare parts provisioning, technical support, engineering services for performance improvements or issue resolution, and potentially depot-level maintenance. The exact scope would be detailed in the contract's Statement of Work (SOW). Given the sole-source nature and the substantial value, it implies a comprehensive package of services essential for maintaining the airworthiness and operational availability of aircraft utilizing these engines, likely for a specific fleet or mission requirement.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when urgency or national security dictates. For engine sustainment, this often arises due to proprietary technology, unique tooling, specialized expertise held exclusively by the original equipment manufacturer (OEM), or when existing infrastructure and training are deeply integrated with a single provider. In this case, RTX Corporation, as the likely OEM or a highly specialized provider for the F117 engine, may possess unique capabilities, data rights, or intellectual property essential for its sustainment. The government would have had to formally justify why competition was not feasible or advantageous, a process that requires rigorous documentation and approval.

What is the track record of RTX Corporation in providing similar sustainment services?

RTX Corporation (formerly Raytheon Technologies) is a major defense contractor with extensive experience in aerospace and defense systems, including engine manufacturing and sustainment. They have a long history of supporting various military aircraft engines through complex sustainment programs. Their track record typically involves managing large-scale logistics, providing technical expertise, and ensuring the operational readiness of critical components for the U.S. military and allied nations. Performance reviews and past contract data, often available through government procurement databases, would provide specific insights into their reliability, cost-effectiveness, and adherence to contractual obligations in similar sustainment roles. Given their size and market position, they are generally considered a capable provider for such services.

How does the $208 million contract value compare to industry benchmarks for engine sustainment?

Benchmarking the $208 million contract value for F117 engine sustainment requires comparing it against similar contracts within the aerospace and defense industry. This comparison should ideally involve contracts for sustainment of comparable engine types (e.g., other turbofan or turboprop engines used in military aircraft), considering factors like engine size, complexity, thrust class, and the number of engines supported. It's also important to consider the contract duration (one year in this case) and the specific services included. Without access to proprietary industry data or a detailed breakdown of the services rendered, a precise benchmark is challenging. However, for major military aircraft engines, annual sustainment costs can range from millions to tens of millions of dollars per engine, making $208 million a significant but potentially justifiable figure for a fleet's annual support, especially if it involves complex overhauls or specialized maintenance.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 400 MAIN ST, EAST HARTFORD, CT, 06118

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: $208,881,733

Exercised Options: $208,881,733

Current Obligation: $208,152,480

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA812418D0001

IDV Type: IDC

Timeline