DoD's $91M C-130J Propulsion Sustainment Contract Awarded to Rolls-Royce Corporation
Contract Overview
Contract Amount: $91,170,972 ($91.2M)
Contractor: Rolls-Royce Corporation
Awarding Agency: Department of Defense
Start Date: 2022-07-01
End Date: 2024-03-29
Contract Duration: 637 days
Daily Burn Rate: $143.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: C-130J PROPULSION LONG TERM SUSTAINMENT- MISSION CARE
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $91.2 million to ROLLS-ROYCE CORPORATION for work described as: C-130J PROPULSION LONG TERM SUSTAINMENT- MISSION CARE Key points: 1. Significant contract value for long-term sustainment of critical aircraft. 2. Sole-source award to Rolls-Royce Corporation, raising questions about competition. 3. Potential risk associated with single-source provider for essential aircraft parts. 4. Spending falls within the 'Aircraft Engine and Engine Parts Manufacturing' sector.
Value Assessment
Rating: questionable
The $91.17 million contract for C-130J propulsion sustainment is substantial. Benchmarking against similar long-term sustainment contracts for military aircraft engines is difficult without more specific data on scope and duration, but the lack of competition warrants scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating no other vendors were considered. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive procurement process.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.
Public Impact
Ensures continued operational readiness of the C-130J Super Hercules fleet. Supports critical military airlift capabilities for national defense. Potential for increased costs due to lack of competitive pressure. Impacts the supply chain for specialized aircraft engine components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long-term sustainment contract
Positive Signals
- Ensures critical asset availability
- Supports established supply chain
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, which is crucial for maintaining military aviation capabilities. Spending in this sector can be high due to the specialized nature and long lifecycle of military aircraft components.
Small Business Impact
The contract was awarded to Rolls-Royce Corporation, a large business. There is no indication of subcontracting opportunities for small businesses within this specific award notice, suggesting limited direct impact on the small business sector.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and performance. The Department of the Air Force should monitor contract execution diligently to mitigate risks associated with single-source providers.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Potential for higher costs due to lack of competitive bidding.
- Dependency on a single supplier for critical components.
- Long-term sustainment contracts can be prone to cost overruns if not managed effectively.
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 $91.2 million to ROLLS-ROYCE CORPORATION. C-130J PROPULSION LONG TERM SUSTAINMENT- MISSION CARE
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 $91.2 million.
What is the period of performance?
Start: 2022-07-01. End: 2024-03-29.
What is the justification for the sole-source award, and has an alternatives analysis been conducted?
The justification for a sole-source award typically involves factors like unique capabilities, proprietary technology, or urgent and compelling needs. An alternatives analysis would assess whether other sources could meet the requirement. Without this specific justification, it's difficult to fully evaluate the necessity of bypassing competition and its potential impact on value for money.
How does the pricing structure compare to previous sustainment contracts for the C-130J propulsion system?
Comparing the pricing structure to previous contracts is essential for assessing value. If this contract represents a significant cost increase without a corresponding increase in scope or service level, it could indicate potential overpricing due to the lack of competition. A detailed cost-benefit analysis would be needed to determine if the current pricing is fair and reasonable.
What are the long-term risks associated with relying on a single provider for critical engine sustainment?
Relying on a single provider for critical engine sustainment poses risks such as potential supply chain disruptions, price escalation, and reduced innovation. If Rolls-Royce faces production issues or decides to increase prices significantly, the Air Force has limited recourse. This highlights the importance of robust contract management and contingency planning.
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: $91,170,972
Exercised Options: $91,170,972
Current Obligation: $91,170,972
Subaward Activity
Number of Subawards: 5
Total Subaward Amount: $5,329,703
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA850417D0002
IDV Type: IDC
Timeline
Start Date: 2022-07-01
Current End Date: 2024-03-29
Potential End Date: 2024-03-29 00:00:00
Last Modified: 2023-09-26
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