Dod Awards $38.4M for T-108 Quick Engine Change Assembly (qeca) to Rolls-Royce Corporation

Contract Overview

Contract Amount: $38,374,941 ($38.4M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2025-09-24

End Date: 2026-09-25

Contract Duration: 366 days

Daily Burn Rate: $104.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: T-108 QUICK ENGINE CHANGE ASSEMBLY (QECA)

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $38.4 million to ROLLS-ROYCE CORPORATION for work described as: T-108 QUICK ENGINE CHANGE ASSEMBLY (QECA) Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns. 2. Limited competition may have impacted the government's ability to secure the best value. 3. The contract duration of 366 days suggests a focused, short-term need for the assemblies. 4. Fixed-price contract type shifts risk to the contractor, potentially incentivizing efficiency. 5. The specific nature of the QECA suggests a critical component for aircraft readiness. 6. The award falls within the Aircraft Engine and Engine Parts Manufacturing sector.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without comparable bids. The firm fixed-price structure is a positive indicator for cost control, but the lack of competition means the government cannot be certain it received the most competitive pricing available. Further analysis would require understanding the market for these specific assemblies and Rolls-Royce's pricing power.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one bidder, Rolls-Royce Corporation, was deemed capable of fulfilling the requirement. This limits the government's ability to leverage competition to drive down prices and ensure the most cost-effective solution. The rationale for sole-sourcing should be thoroughly documented to justify the absence of broader competition.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from competitive pricing, potentially leading to higher costs than if multiple vendors had bid.

Public Impact

The primary beneficiaries are the Department of the Air Force, ensuring the availability of critical engine components. The contract delivers T-108 QUICK ENGINE CHANGE ASSEMBLIES (QECA), essential for aircraft maintenance and operational readiness. The geographic impact is primarily within Indiana, where Rolls-Royce Corporation is located, potentially supporting local jobs. Workforce implications may include specialized technicians and engineers involved in the production or assembly of these critical parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to inflated prices.
Sole-source justification needs rigorous review to ensure necessity.
Potential for vendor lock-in if alternatives are not explored.

Positive Signals

Firm fixed-price contract type aligns incentives for cost efficiency.
Rolls-Royce is a known entity in aerospace manufacturing, suggesting established quality.
The award is for a specific, critical component, indicating a focused requirement.

Sector Analysis

The Aircraft Engine and Engine Parts Manufacturing sector is a highly specialized and capital-intensive industry. Major players like Rolls-Royce dominate, often leading to sole-source or limited-competition contracts for unique or proprietary components. The total market for aerospace engine parts is substantial, with government contracts forming a significant portion due to defense spending.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of aircraft engine components and the sole-source award to a large corporation, subcontracting opportunities for small businesses may be limited unless specifically mandated by the prime contractor.

Oversight & Accountability

Oversight will likely be managed by the Department of the Air Force contracting officers and program managers. Transparency is dependent on the public availability of the sole-source justification and any performance reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Engine Maintenance
Aerospace Parts Manufacturing
Defense Logistics Support
Air Force Readiness Programs

Risk Flags

Sole-source award
Lack of competition
Potential for price escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.4 million to ROLLS-ROYCE CORPORATION. T-108 QUICK ENGINE CHANGE ASSEMBLY (QECA)

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 $38.4 million.

What is the period of performance?

Start: 2025-09-24. End: 2026-09-25.

What is the historical spending pattern for T-108 QUICK ENGINE CHANGE ASSEMBLY (QECA) by the Department of Defense?

Analyzing historical spending for the T-108 QUICK ENGINE CHANGE ASSEMBLY (QECA) is crucial for understanding the long-term cost implications and identifying potential trends. Without specific historical data for this exact assembly, we can infer that spending on critical engine components for the Air Force is generally consistent, driven by fleet readiness requirements and aircraft lifecycle management. Rolls-Royce Corporation, as a major engine manufacturer, likely holds numerous contracts for parts and services. A review of past awards for similar engine components or maintenance services from Rolls-Royce could provide context. However, the absence of detailed historical data for this specific QECA makes it difficult to establish a precise spending trajectory or identify significant fluctuations. Future analysis should aim to track spending on this specific contract and compare it against any subsequent awards for the same item.

How does the pricing of this contract compare to similar engine component contracts awarded by the DoD?

Direct price comparison for this T-108 QUICK ENGINE CHANGE ASSEMBLY (QECA) contract is challenging due to its sole-source nature and the specificity of the component. Without competitive bids, it's difficult to benchmark against market rates or other similar contracts. Generally, sole-source awards to large, established manufacturers like Rolls-Royce can be at a premium compared to competitively bid items. To assess value, one would need to compare the per-unit cost against internal cost estimates, historical pricing for the same or similar components if available, or pricing for components on different but comparable aircraft platforms. The firm fixed-price (FFP) nature of the contract is a positive sign, as it caps the government's liability. However, the true value-for-money can only be determined through a thorough review of the sole-source justification and potentially by comparing the unit price to industry benchmarks for similar complexity and scale of components, if such data is accessible.

What are the primary risks associated with this sole-source contract for the T-108 QUICK ENGINE CHANGE ASSEMBLY (QECA)?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. When only one vendor is available or selected, the government loses the leverage that competitive bidding provides, potentially leading to higher costs than if multiple vendors had vied for the contract. Another risk is vendor lock-in; if Rolls-Royce is the sole provider of this specific assembly, the Air Force may become dependent on them for future needs, limiting flexibility and negotiation power. Furthermore, without competitive pressure, there's a reduced incentive for the contractor to innovate or offer cost-saving efficiencies beyond what is contractually required. Ensuring the sole-source justification is robust and that the government has explored all avenues for competition is critical to mitigating these risks.

What is the track record of Rolls-Royce Corporation in fulfilling similar defense contracts?

Rolls-Royce Corporation has a long-standing and extensive track record as a major supplier of aerospace engines and components to defense organizations worldwide, including the U.S. Department of Defense. They are known for producing high-quality, complex engine systems for various military aircraft. Historically, Rolls-Royce has been awarded numerous contracts for engine manufacturing, maintenance, repair, and overhaul services. While specific performance metrics for every contract are not always publicly available, their continued role as a prime contractor suggests a generally reliable performance history. However, like any large defense contractor, they may have faced scrutiny or performance issues on specific contracts. A detailed review of their past performance ratings and any past disputes or contract terminations related to similar components would provide a more granular assessment.

What are the implications of the firm fixed-price (FFP) contract type for this award?

The firm fixed-price (FFP) contract type for the T-108 QUICK ENGINE CHANGE ASSEMBLY (QECA) award is significant because it places the primary responsibility for cost control on the contractor, Rolls-Royce Corporation. Under an FFP agreement, the agreed-upon price is fixed regardless of the contractor's actual costs incurred. This structure incentivizes the contractor to manage its expenses efficiently and effectively to maximize profit. For the government, it provides cost certainty and predictability, as the total expenditure is known upfront, assuming no contract modifications. This type of contract is generally preferred when the scope of work is well-defined and the risks are manageable. It shifts the financial risk of cost overruns from the government to the contractor, which can be advantageous for taxpayers, provided the initial price negotiated is fair and reasonable.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts 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: 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: $38,374,941

Exercised Options: $38,374,941

Current Obligation: $38,374,941

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA812423D0002

IDV Type: IDC

Timeline