DoD awards $211M contract for F117 engine parts, with limited competition and no small business set-aside

Contract Overview

Contract Amount: $211,077,169 ($211.1M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2018-10-01

End Date: 2021-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $192.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F117

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $211.1 million to RTX CORPORATION for work described as: F117 Key points: 1. Contract awarded for sustainment of F117 engines, critical for C-17 aircraft. 2. Significant portion of contract value allocated to a single, large defense contractor. 3. Lack of robust competition raises concerns about potential price inflation. 4. Absence of small business participation limits broader economic impact. 5. Contract duration of three years suggests a need for ongoing sustainment. 6. Fixed-price contract type aims to control costs, but market dynamics are key.

Value Assessment

Rating: fair

The contract value of $211 million for F117 engine parts over three years appears substantial. Benchmarking against similar sustainment contracts for large aircraft engines is difficult without more specific data on the types and quantities of parts procured. However, the 'NOT COMPETED' status and sole-source nature suggest potential for higher-than-market pricing. The fixed-price contract type provides some cost control, but the lack of competition limits the government's ability to leverage market forces for optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that the Department of Defense did not conduct a competitive bidding process. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition means that price discovery through market forces was not utilized, potentially leading to less favorable pricing for the government compared to a fully competed scenario.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Department of the Air Force and its C-17 Globemaster III fleet, ensuring operational readiness. Services delivered include the provision of essential parts for the sustainment and maintenance of F117 engines. Geographic impact is national, supporting Air Force bases and operations across the United States. Workforce implications are primarily within the aerospace manufacturing and maintenance sectors, supporting jobs at the prime contractor and potentially its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential value for taxpayer dollars.
Lack of small business participation misses opportunities to foster growth in smaller enterprises.
Reliance on a single contractor for critical engine parts could create supply chain vulnerabilities.
Limited transparency due to non-competitive nature makes independent value assessment challenging.

Positive Signals

Fixed-price contract type offers cost certainty for the government.
Contract supports critical sustainment for a key military transport aircraft.
Awardee is a major defense contractor with established expertise in aerospace.
Contract duration aligns with expected operational needs for C-17 sustainment.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Contracts for aircraft engine parts fall under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry. This segment is vital for maintaining the operational readiness of military fleets. Spending in this area is often driven by specific aircraft platforms and their sustainment requirements. Comparable spending benchmarks are difficult to ascertain without detailed part-specific data, but large-scale sustainment contracts for major weapon systems can run into billions of dollars over their lifecycle.

Small Business Impact

This contract did not include a small business set-aside, and the prime contractor, RTX Corporation, is a large business. There is no indication of subcontracting plans specifically targeting small businesses within the provided data. The absence of a small business set-aside means that opportunities for smaller, specialized firms to compete for this work were not pursued, potentially limiting the broader economic impact on the small business ecosystem within the aerospace supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Air Force is the procuring agency. Accountability measures are inherent in the contract terms, particularly the fixed-price nature, which obligates the contractor to deliver specified parts. Transparency is limited due to the sole-source award; however, contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

F117 Engine Maintenance and Repair
C-17 Globemaster III Sustainment
Aerospace Parts Manufacturing
Defense Logistics Agency Contracts
Air Force Aircraft Parts Procurement

Risk Flags

Sole-source award
Lack of competition
No small business participation
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $211.1 million to RTX CORPORATION. F117

Who is the contractor on this award?

The obligated recipient is RTX 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 $211.1 million.

What is the period of performance?

Start: 2018-10-01. End: 2021-09-30.

What is the historical spending trend for F117 engine parts with this contractor?

Analyzing historical spending for F117 engine parts with RTX Corporation (or its predecessor entities) would require accessing historical contract data beyond this single award. Typically, sustainment contracts for major aircraft components like engines are long-term and involve multiple awards over the life of the aircraft. Without access to prior contract databases or specific solicitations, it's challenging to establish a precise spending trend. However, the C-17 has been in service for decades, suggesting a consistent need for engine parts and sustainment services. The $211 million awarded here represents a significant, but likely not the entirety, of the spending over the contract's three-year duration and the aircraft's operational life. Further investigation into prior contract awards for F117 sustainment would be necessary to identify trends in volume, pricing, and contractor performance.

How does the per-unit cost of these F117 engine parts compare to industry benchmarks?

Determining a precise per-unit cost benchmark for F117 engine parts is complex without specific part numbers, quantities, and detailed specifications. The provided data indicates a total award of $211 million for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' related to the F117 engine. This is a broad category, and unit costs can vary dramatically based on the complexity, size, and criticality of each part. Furthermore, the 'NOT COMPETED' status suggests that competitive market pricing may not have been fully leveraged. To establish a benchmark, one would need to identify specific part numbers within this contract, research their market prices from other suppliers (if available), or compare them to similar parts used in other large military aircraft engines. The lack of competition makes direct comparison to market rates difficult and potentially less reliable.

What are the specific risks associated with a sole-source award for critical aircraft engine components?

A sole-source award for critical aircraft engine components presents several risks. Firstly, it eliminates competitive pressure, which is a primary mechanism for ensuring fair and reasonable pricing. This can lead to higher costs for the government and taxpayers. Secondly, it can foster complacency in the contractor, potentially reducing incentives for innovation or efficiency improvements. Thirdly, it creates a dependency on a single supplier, which can be a vulnerability in the supply chain. If the sole-source contractor experiences production issues, financial difficulties, or geopolitical disruptions, the availability of critical parts could be jeopardized, impacting aircraft readiness. Lastly, the lack of transparency inherent in sole-source procurements can make it harder to identify potential overpricing or inefficiencies.

What is the track record of RTX Corporation in delivering similar aircraft engine parts contracts?

RTX Corporation (through its Pratt & Whitney division, which manufactures the F117 engine) has an extensive track record in delivering aircraft engine components and sustainment services to the Department of Defense and other government agencies. They are a primary original equipment manufacturer (OEM) for many military aircraft engines, including the F117 powering the C-17. Their history typically involves long-term sustainment contracts, spare parts provisioning, and maintenance, repair, and overhaul (MRO) services. While specific performance metrics for this particular contract are not detailed here, RTX is generally considered a major, experienced player in the defense aerospace sector. However, like any large contractor, they may have faced past performance issues or contract disputes on other programs, which would require a deeper dive into contract performance databases and historical reviews.

How does this contract's value compare to overall DoD spending on aircraft parts and maintenance?

The $211 million awarded for F117 engine parts represents a fraction of the Department of Defense's overall budget for aircraft parts and maintenance. The DoD spends tens of billions of dollars annually on aviation sustainment, encompassing everything from routine maintenance and repair to the procurement of spare parts, engines, and upgrades for its vast fleet of aircraft. Contracts for major components like engines and their associated parts are significant but are part of a much larger ecosystem of aviation support. For context, the total DoD budget often exceeds hundreds of billions of dollars, with aviation programs constituting a substantial portion. This specific contract, while large in absolute terms, is one of many necessary expenditures to maintain the operational readiness of the C-17 fleet and the broader Air Force inventory.

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: $211,077,169

Exercised Options: $211,077,169

Current Obligation: $211,077,169

Actual Outlays: $6,179,153

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA812418D0001

IDV Type: IDC

Timeline