DoD's $83.8M C-130J Propulsion Sustainment Contract Awarded to Rolls-Royce Corporation
Contract Overview
Contract Amount: $83,855,202 ($83.9M)
Contractor: Rolls-Royce Corporation
Awarding Agency: Department of Defense
Start Date: 2022-02-01
End Date: 2022-11-30
Contract Duration: 302 days
Daily Burn Rate: $277.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: C-130J PROPULSION LONG TERM SUSTAINMENT- MISSION CARE - OPTION III
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $83.9 million to ROLLS-ROYCE CORPORATION for work described as: C-130J PROPULSION LONG TERM SUSTAINMENT- MISSION CARE - OPTION III Key points: 1. The contract focuses on long-term sustainment for C-130J aircraft propulsion systems. 2. Rolls-Royce Corporation is the sole provider for this specific sustainment mission. 3. The award is a delivery order under an existing contract, indicating a continuation of services. 4. The sector is dominated by a few large players, with Rolls-Royce being a key one.
Value Assessment
Rating: fair
The $83.8M award for a 10-month period suggests a significant per-unit cost. Benchmarking against similar long-term sustainment contracts for complex aircraft components is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, likely due to the specialized nature of C-130J propulsion systems and Rolls-Royce's proprietary knowledge. This lack of competition limits price discovery and potentially leads to higher costs.
Taxpayer Impact: Taxpayers may be paying a premium due to the sole-source nature of this award, as competitive pressures that typically drive down costs are absent.
Public Impact
Ensures continued operational readiness of critical C-130J transport aircraft. Supports the Air Force's global mobility and logistical capabilities. Maintains the specialized expertise required for these advanced engine systems. Potential for higher costs due to lack of competition impacts overall defense budget.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- High contract value for a relatively short duration.
- Lack of transparency in cost breakdown.
Positive Signals
- Ensures critical sustainment for essential military aircraft.
- Leverages established expertise of a known provider.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine parts and maintenance. Spending in this area is critical for maintaining military readiness but is often characterized by high R&D costs and limited competition due to specialized technology.
Small Business Impact
This contract was awarded directly to Rolls-Royce Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within this specific award notice.
Oversight & Accountability
The award is a delivery order under an existing contract, suggesting some level of prior oversight. However, the sole-source nature warrants scrutiny to ensure fair pricing and value for taxpayer dollars.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for cost overruns
- Dependency on a single supplier
- Limited transparency in pricing
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 $83.9 million to ROLLS-ROYCE CORPORATION. C-130J PROPULSION LONG TERM SUSTAINMENT- MISSION CARE - OPTION III
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 $83.9 million.
What is the period of performance?
Start: 2022-02-01. End: 2022-11-30.
What is the justification for the sole-source award, and how was the price determined to be fair and reasonable without competition?
The justification for a sole-source award typically stems from the unique capabilities or proprietary nature of the product or service. For C-130J propulsion sustainment, Rolls-Royce likely holds the intellectual property and specialized knowledge. The price is usually determined through negotiation, referencing historical data, cost analysis, and market research, though without direct competition, validating 'fairness' is more challenging.
What are the long-term cost implications of relying on a sole-source provider for critical aircraft sustainment?
Long-term reliance on a sole-source provider can lead to escalating costs as the provider faces no competitive pressure to innovate or reduce prices. It also creates a dependency risk, where the government has limited leverage if the provider decides to increase prices significantly or alter service terms. This can strain defense budgets over time.
How does this contract contribute to the overall operational effectiveness and readiness of the C-130J fleet?
This contract is crucial for maintaining the operational effectiveness and readiness of the C-130J fleet by ensuring the availability of necessary parts, maintenance, and technical support for its propulsion systems. Reliable sustainment directly translates to fewer aircraft downtime hours, enabling the Air Force to meet its global mission requirements consistently.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
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: $83,855,202
Exercised Options: $83,855,202
Current Obligation: $83,855,202
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA850417D0002
IDV Type: IDC
Timeline
Start Date: 2022-02-01
Current End Date: 2022-11-30
Potential End Date: 2022-11-30 00:00:00
Last Modified: 2023-01-27
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