DoD awards $480.8M for aircraft parts, with RTX Corporation receiving the sole-source contract

Contract Overview

Contract Amount: $480,859,855 ($480.9M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2019-10-04

End Date: 2022-12-31

Contract Duration: 1,184 days

Daily Burn Rate: $406.1K/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 $480.9 million to RTX CORPORATION for work described as: F117 Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns. 2. Significant duration of the contract (1184 days) suggests a long-term need for these parts. 3. The contract falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' a critical sector for defense readiness. 4. No small business set-aside was included, potentially limiting opportunities for smaller enterprises. 5. The firm fixed-price structure aims to control costs, but sole-sourcing can undermine competitive pricing. 6. Performance is managed by the Defense Contract Management Agency, indicating a focus on oversight.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without competitive bids. The total award of $480.8 million over nearly four years indicates substantial spending. Without comparable contracts or market data, it's difficult to definitively assess if the pricing is optimal. However, the lack of competition inherently introduces a risk of less favorable pricing for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, RTX Corporation, was solicited. The justification for sole-sourcing is not provided in the data, but typically it is due to unique capabilities or proprietary technology. This lack of competition limits the government's ability to explore alternative solutions or negotiate based on multiple offers, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing offers, the government cannot be assured it is receiving the best possible price for these aircraft parts.

Public Impact

The Department of Defense is the primary beneficiary, ensuring the availability of critical aircraft parts for its fleet. Services delivered include the manufacturing and supply of specialized aircraft components. The geographic impact is likely national, supporting military operations across various bases. Workforce implications include sustained employment within RTX Corporation and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of small business participation may exclude innovative smaller firms from contributing.
Long contract duration without clear performance metrics could mask inefficiencies.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Award to a major defense contractor like RTX suggests a focus on established capabilities.
Awarded by the Department of Defense, indicating alignment with national security priorities.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. This industry is characterized by high technological barriers to entry, significant R&D investment, and a concentrated market with a few major players. Spending in this category is crucial for maintaining military readiness and supporting complex defense systems. Comparable spending benchmarks would typically involve analyzing other large sole-source or competitively bid contracts for similar aircraft components within the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for them. This means that opportunities for small businesses to participate in this significant $480.8 million award are likely limited to direct supply chain roles, if any. The absence of a set-aside or explicit subcontracting plan could reduce the flow of federal dollars into the small business ecosystem for this particular contract.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price contract type provides a degree of cost accountability. Transparency regarding the justification for the sole-source award and detailed performance metrics would enhance further oversight. Inspector General jurisdiction would apply if any fraud or waste is suspected.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Manufacturing
Defense Procurement
Military Aircraft Components

Risk Flags

Sole-source award may lead to higher costs.
Lack of transparency regarding justification for sole-sourcing.
Potential for contractor complacency due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $480.9 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $480.9 million.

What is the period of performance?

Start: 2019-10-04. End: 2022-12-31.

What is the specific justification for awarding this contract on a sole-source basis to RTX Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, often due to unique capabilities, proprietary technology, or urgent and compelling needs. Without this information, it is difficult to assess whether the sole-source decision was appropriate and if it truly served the government's best interest. Further investigation into the contract file or agency justifications would be necessary to understand the rationale behind bypassing competitive procedures.

How does the $480.8 million award compare to historical spending on similar aircraft parts by the Department of Defense?

Comparing this $480.8 million award to historical spending requires access to broader DoD procurement data for similar aircraft parts. The provided data is for a single contract (F117) awarded to RTX Corporation. To establish a benchmark, one would need to analyze spending trends for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' over several fiscal years, identify comparable contract types (e.g., sole-source vs. competitive), and examine the average award values for similar components. Without this broader dataset, it's impossible to definitively state if this award is higher, lower, or in line with historical patterns.

What are the key performance indicators (KPIs) associated with this contract, and how is RTX Corporation's performance being measured?

The provided data does not specify the key performance indicators (KPIs) or the detailed performance measurement plan for this contract. While the contract is firm fixed-price and managed by the Defense Contract Management Agency (DCMA), the specific metrics for delivery timeliness, quality, and technical performance are not detailed. Understanding these KPIs is crucial for assessing the contractor's effectiveness and ensuring the government receives the intended value. DCMA typically monitors performance against contract requirements, but the exact metrics would be outlined in the contract's statement of work and performance clauses.

What is the risk profile of RTX Corporation as a contractor for this specific type of aircraft part?

Assessing the risk profile of RTX Corporation for this specific contract requires examining their past performance on similar contracts, their financial stability, and any history of quality issues or delivery delays. RTX Corporation is a major defense contractor with extensive experience, which generally suggests a lower risk of technical failure. However, the sole-source nature of this award introduces a risk related to pricing and potential complacency. Without access to detailed performance history and specific risk assessments conducted by the DoD for this contract, a comprehensive risk evaluation is limited.

Given the sole-source nature, what mechanisms are in place to ensure fair pricing and prevent cost overruns throughout the contract's duration?

The primary mechanism to ensure fair pricing in a sole-source contract, especially a firm fixed-price one, relies heavily on pre-award cost analysis and negotiation by the contracting agency. While the firm fixed-price structure caps the government's liability, it does not inherently guarantee the lowest possible price without competition. Post-award, the Defense Contract Management Agency (DCMA) would monitor performance and costs, and the contract may include clauses allowing for price adjustments under specific circumstances (e.g., significant changes in material costs if stipulated). However, the lack of competitive pressure remains a inherent risk factor for potentially inflated pricing.

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: $480,859,855

Exercised Options: $480,859,855

Current Obligation: $480,859,855

Actual Outlays: $44,524,034

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA812418D0001

IDV Type: IDC

Timeline