DoD awards $26.4M for C-130J engine support to Rolls-Royce, facing limited competition

Contract Overview

Contract Amount: $26,372,170 ($26.4M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2015-03-06

End Date: 2020-06-05

Contract Duration: 1,918 days

Daily Burn Rate: $13.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF THE PURPOSE OF THIS EFFORT IS TO PROVIDE MISSIONCARE [TM] FOR ROLLS-ROYCE CORPORATION AE 2100D# TURBOPROP ENGINES AND DOWTY R-391 PROPELLERS AND ASSOCIATED PROPULSION SYSTEM MODULES AND COMPONENTS INSTALLED OR USED ON ROYAL NORWEGIAN AIR FORCE C-130J.

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to ROLLS-ROYCE CORPORATION for work described as: IGF::OT::IGF THE PURPOSE OF THIS EFFORT IS TO PROVIDE MISSIONCARE [TM] FOR ROLLS-ROYCE CORPORATION AE 2100D# TURBOPROP ENGINES AND DOWTY R-391 PROPELLERS AND ASSOCIATED PROPULSION SYSTEM MODULES AND COMPONENTS INSTALLED OR USED ON ROYAL NORWEGIAN AIR FORCE C-130J. Key points: 1. The contract focuses on specialized maintenance for Royal Norwegian Air Force C-130J aircraft engines and propellers. 2. Rolls-Royce, the original equipment manufacturer, is the sole provider, indicating a lack of competitive bidding. 3. The firm-fixed-price contract type aims to control costs, but the absence of competition raises concerns about optimal pricing. 4. This spending falls within the Defense sector, specifically supporting aircraft engine parts manufacturing.

Value Assessment

Rating: questionable

The contract value of $26.4M over five years for specialized engine support is difficult to benchmark without competitive bids. The firm-fixed-price structure is positive, but the lack of competition prevents a true assessment of value for money against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract is not available for competition, implying a sole-source or limited competition scenario, likely due to the specialized nature of Rolls-Royce engines and proprietary knowledge. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure, as the government relies on a single provider for critical maintenance.

Public Impact

Ensures operational readiness of Royal Norwegian Air Force C-130J aircraft, vital for military logistics and operations. Supports a critical component of a key military transport aircraft, impacting national defense capabilities. The contract's duration and value highlight the ongoing need for specialized maintenance in defense aviation. Potential for increased costs due to limited competition could divert funds from other defense priorities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source provider
Potential for overpricing

Positive Signals

Firm-fixed-price contract
Supports critical defense asset
Long-term support agreement

Sector Analysis

This contract falls under the Defense sector, specifically supporting aircraft engine and engine parts manufacturing. Spending in this area is crucial for maintaining military aviation fleets, but often involves specialized, high-cost components and services where competition can be limited.

Small Business Impact

This contract was awarded directly to Rolls-Royce Corporation, a large business. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The contract was awarded by the Department of Defense through the Defense Contract Management Agency. Oversight would focus on ensuring performance and adherence to the firm-fixed-price terms, especially given the limited competition.

Related Government Programs

Aircraft Engine and Engine Parts Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competitive pricing.
Potential for cost overruns if not closely managed.
Dependency on a single supplier for critical components.
Lack of transparency in price negotiation.
Risk of performance issues if supplier prioritizes other contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to ROLLS-ROYCE CORPORATION. IGF::OT::IGF THE PURPOSE OF THIS EFFORT IS TO PROVIDE MISSIONCARE [TM] FOR ROLLS-ROYCE CORPORATION AE 2100D# TURBOPROP ENGINES AND DOWTY R-391 PROPELLERS AND ASSOCIATED PROPULSION SYSTEM MODULES AND COMPONENTS INSTALLED OR USED ON ROYAL NORWEGIAN AIR FORCE C-130J.

Who is the contractor on this award?

The obligated recipient is ROLLS-ROYCE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $26.4 million.

What is the period of performance?

Start: 2015-03-06. End: 2020-06-05.

What is the justification for the 'not available for competition' status, and were alternative solutions explored?

The justification for 'not available for competition' typically stems from proprietary technology, unique capabilities, or essential support for specific platforms where only one entity can provide the required service. For Rolls-Royce AE 2100D# engines, it's likely due to specialized knowledge and parts. Alternative solutions, such as exploring third-party maintenance providers or developing in-house capabilities, should be periodically assessed to mitigate long-term sole-source reliance.

How does the pricing compare to similar engine support contracts for other military aircraft, considering the limited competition?

Benchmarking this contract's pricing is challenging due to the limited competition and the specific nature of the AE 2100D# engines. Without comparable contracts awarded under competitive bidding, it's difficult to definitively assess if the $26.4M represents fair market value. A thorough review of historical pricing trends for Rolls-Royce support and industry-wide maintenance costs for similar turboprop engines would be necessary for a more robust comparison.

What measures are in place to ensure the effectiveness and efficiency of the maintenance services provided by Rolls-Royce?

Effectiveness and efficiency are primarily ensured through the contract's performance standards and the oversight provided by the Defense Contract Management Agency. The firm-fixed-price structure incentivizes Rolls-Royce to perform efficiently to maintain profitability. Regular performance reviews, adherence to maintenance schedules, and quality control checks are crucial mechanisms to guarantee the effectiveness of the mission-critical support.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rolls-Royce Holdings PLC (UEI: 217127290)

Address: 450 S MERIDIAN ST, INDIANAPOLIS, IN, 46225

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $53,398,360

Exercised Options: $28,181,255

Current Obligation: $26,372,170

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $67,107,753

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline