Air Force awards $794M for F117 ESS sustainment to RTX Corporation, a sole-source contract

Contract Overview

Contract Amount: $794,249,535 ($794.2M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2021-10-04

End Date: 2022-09-30

Contract Duration: 361 days

Daily Burn Rate: $2.2M/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F117 ESS FY22 TASK ORDER

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $794.2 million to RTX CORPORATION for work described as: F117 ESS FY22 TASK ORDER Key points: 1. The contract value represents a significant investment in maintaining critical aircraft systems. 2. Sole-source award suggests limited market alternatives or specific contractor expertise required. 3. The firm-fixed-price structure aims to control costs, but requires careful monitoring of performance. 4. This award falls within the broader context of ongoing defense spending for aircraft sustainment. 5. The duration of the contract indicates a long-term commitment to the F117 ESS program. 6. Geographic concentration in Connecticut may point to specific operational or maintenance facilities.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without comparable solicitations. The $794 million award over approximately one year represents a substantial expenditure for aircraft sustainment. While firm-fixed-price contracts are intended to provide cost certainty, the absence of competition raises questions about whether the government achieved the best possible price. Further analysis would require access to internal cost estimates or historical pricing for similar sustainment services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not conduct a competitive solicitation. This typically occurs when only one responsible source is available or when the agency determines that a sole-source award is in the government's best interest, often due to unique capabilities or urgent needs. The lack of competition limits the opportunity for price discovery and may result in higher costs compared to a fully competed contract.

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 U.S. Air Force units operating the F117 ESS aircraft, ensuring operational readiness. The contract delivers essential sustainment services, including maintenance, repair, and parts for the F117 ESS. The geographic impact is concentrated in Connecticut, likely supporting key Air Force installations or contractor facilities. This contract supports a specialized workforce within RTX Corporation, including engineers, technicians, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the sole-source justification process could obscure potential alternatives.
Long-term sustainment contracts can become entrenched, making future competition difficult.
Dependence on a single contractor for critical systems poses a risk if performance falters.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government, assuming performance is met.
Award to a known entity (RTX Corporation) suggests a potentially reliable performance history.
Sustainment of critical aircraft systems ensures continued operational capability for the Air Force.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing and sustainment. The market for specialized aircraft sustainment is often characterized by high barriers to entry due to technical expertise, proprietary technology, and long-standing relationships with government agencies. Spending in this area is critical for maintaining the readiness and longevity of military aviation assets, with significant government outlays dedicated annually to such services.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a sole-source award to a large corporation (RTX), it is unlikely to have direct subcontracting opportunities for small businesses unless specified by the prime contractor. The absence of a set-aside means that the primary contract value does not directly benefit the small business ecosystem, though indirect impacts through the supply chain are possible.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The firm-fixed-price nature implies that performance standards and delivery schedules are key metrics. Transparency is limited due to the sole-source nature. The Inspector General of the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

F117 ESS Program Support
Air Force Aircraft Maintenance Contracts
Defense Contractor Sustainment Services
Aerospace Parts Manufacturing
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Potential for cost overruns
Lack of competitive benchmarking
Long-term contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $794.2 million to RTX CORPORATION. F117 ESS FY22 TASK ORDER

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 $794.2 million.

What is the period of performance?

Start: 2021-10-04. End: 2022-09-30.

What is the historical spending trend for F117 ESS sustainment with RTX Corporation?

Analyzing historical spending for F117 ESS sustainment with RTX Corporation requires access to historical contract data beyond this single FY22 task order. Typically, sustainment costs can fluctuate based on operational tempo, component life cycles, and required upgrades. A trend analysis would involve examining previous contracts, delivery orders, and modifications awarded to RTX for this specific system over several fiscal years. Without that granular data, it's difficult to ascertain if the $794 million award represents an increase, decrease, or stable level of spending compared to prior periods. Factors such as inflation, changes in system reliability, and evolving maintenance strategies would all influence historical spending patterns.

How does the per-unit cost of F117 ESS sustainment compare to similar aircraft sustainment contracts?

Directly comparing the per-unit cost of F117 ESS sustainment is challenging without specific unit definitions (e.g., per flight hour, per maintenance action, per component replaced) and access to detailed cost breakdowns. Furthermore, the sole-source nature of this award complicates benchmarking against competitively awarded contracts. Generally, sole-source awards tend to be higher than competitive ones due to the lack of price pressure. To perform a valid comparison, one would need to identify contracts for sustainment of similarly complex military aircraft, ideally with similar operational roles and age, and then normalize the costs based on contract type, duration, and scope of services. This often requires specialized cost analysis tools and access to proprietary pricing data.

What are the key performance indicators (KPIs) for this F117 ESS sustainment contract, and how is performance being measured?

While the specific Key Performance Indicators (KPIs) for this F117 ESS sustainment contract are not detailed in the provided data, typical KPIs for such agreements often include metrics related to aircraft availability, mission capable rates, turnaround time for repairs, quality of maintenance performed, and adherence to delivery schedules for parts and services. Performance measurement would likely involve regular reporting by RTX Corporation, reviewed by Air Force program managers. Contractual clauses would define acceptable performance thresholds, and failure to meet these could result in penalties or corrective actions. The firm-fixed-price nature suggests that meeting delivery and quality standards is paramount.

What is RTX Corporation's track record in fulfilling sole-source sustainment contracts for the Department of Defense?

RTX Corporation (formerly Raytheon Technologies) has a substantial track record in fulfilling various defense contracts, including sustainment services, often through sole-source or limited competition awards due to their specialized capabilities and established relationships. Their history encompasses a wide range of platforms and systems across different military branches. Assessing their track record specifically for sole-source sustainment would involve reviewing past performance evaluations, contract histories, and any documented issues or successes on similar long-term support agreements. Generally, major defense contractors like RTX are expected to have robust processes for managing such critical contracts, though performance can vary by program and specific contract requirements.

Are there any identified risks associated with the sole-source nature of this F117 ESS sustainment contract?

The primary risk associated with the sole-source nature of this F117 ESS sustainment contract is the potential for inflated costs due to the lack of competitive bidding. Without competing offers, the government has reduced leverage to negotiate the lowest possible price. Additionally, sole-source awards can sometimes indicate a lack of market research or an over-reliance on a single provider, which can create long-term dependencies and limit future flexibility. There's also a risk that innovation may be stifled, as the incumbent contractor may face less pressure to improve efficiency or introduce cost-saving measures compared to a competitive environment. Ensuring robust oversight and performance management becomes even more critical in sole-source situations.

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

Solicitation ID: FA812415R0001

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: $794,249,535

Exercised Options: $794,249,535

Current Obligation: $794,249,535

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA812418D0001

IDV Type: IDC

Timeline