DoD awards $4.8M for C-130J engine spares to Rolls-Royce, raising competition concerns
Contract Overview
Contract Amount: $47,959,610 ($48.0M)
Contractor: Rolls-Royce Corporation
Awarding Agency: Department of Defense
Start Date: 2019-08-28
End Date: 2021-06-30
Contract Duration: 672 days
Daily Burn Rate: $71.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MISSION CARE SPARES C-130 J ENGINE BUY
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $48.0 million to ROLLS-ROYCE CORPORATION for work described as: MISSION CARE SPARES C-130 J ENGINE BUY Key points: 1. Significant contract value for specialized aircraft engine parts. 2. Sole-source award to Rolls-Royce limits competitive pricing. 3. Potential risk of overpayment due to lack of competition. 4. Spending falls within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $4.8 million for C-130J engine spares is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar specialized parts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Rolls-Royce Corporation, was considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award may result in higher taxpayer costs than if the contract had been competitively bid.
Public Impact
Ensures continued operational readiness of the C-130J Super Hercules fleet. Supports critical maintenance and repair capabilities for a key military aircraft. Potential for increased costs impacts overall defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
Positive Signals
- Supports critical military aircraft
- Ensures operational readiness
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, which is crucial for maintaining the operational capabilities of military aviation. Spending benchmarks for specialized parts like these can vary widely based on technology and exclusivity.
Small Business Impact
The contract was awarded to Rolls-Royce Corporation, a large business. There is no indication that small businesses were involved in this specific sole-source award, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price paid was fair and reasonable, despite the absence of competition. Transparency in the justification for the sole-source award is key.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for inflated pricing.
- Limited transparency in price justification.
- Missed opportunity for small business participation.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, in, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.0 million to ROLLS-ROYCE CORPORATION. MISSION CARE SPARES C-130 J ENGINE BUY
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 $48.0 million.
What is the period of performance?
Start: 2019-08-28. End: 2021-06-30.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, or urgent and compelling needs where competition is not feasible or practical within the required timeframe. Further investigation into the specific documentation for this contract would be needed to confirm the exact rationale.
What is the potential cost impact of this sole-source award on the C-130J program?
Sole-source awards often carry a higher cost risk compared to competitive contracts. Without competing bids, the government may pay a premium. The $4.8 million awarded could potentially be higher than if multiple vendors had vied for the contract, impacting the overall budget allocated for C-130J sustainment and readiness.
Are there alternative suppliers or methods to ensure future competition for C-130J engine spares?
Exploring alternative suppliers or developing strategies to foster competition for future spare parts procurements is essential. This could involve encouraging new entrants into the market, exploring remanufacturing options, or negotiating long-term agreements with incentives for competitive pricing. Proactive planning can mitigate the risks associated with sole-source awards.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: ENGINES AND TURBINES AND COMPONENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA850419R3256
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 and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $47,959,610
Exercised Options: $47,959,610
Current Obligation: $47,959,610
Subaward Activity
Number of Subawards: 12
Total Subaward Amount: $2,317,832
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA850417D0002
IDV Type: IDC
Timeline
Start Date: 2019-08-28
Current End Date: 2021-06-30
Potential End Date: 2021-06-30 00:00:00
Last Modified: 2022-09-26
More Contracts from Rolls-Royce Corporation
- This Contract IS for the Procurement of AE1107C Turboshaft Engines (installs and Spares) — $847.1M (Department of Defense)
- Pbth Contract — $615.2M (Department of Defense)
- AE1107C Turboshaft Engines (installs) — $527.0M (Department of Defense)
- AE1107C Turboshaft Engines — $520.7M (Department of Defense)
- Federal Contract — $340.6M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)