DoD awards $28.3M to Rolls-Royce for RSAF C-130J engine support, raising competition concerns

Contract Overview

Contract Amount: $28,282,974 ($28.3M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2016-09-01

End Date: 2021-08-25

Contract Duration: 1,819 days

Daily Burn Rate: $15.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF FIELD SERVICE REPRESENTATIVES IN SUPPORT OF THE ROYAL SAUDI AIR FORCE C-130J AIRCRAFT FLEET; PART OF THE MISSIONCARE TM EFFORT

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $28.3 million to ROLLS-ROYCE CORPORATION for work described as: IGF::OT::IGF FIELD SERVICE REPRESENTATIVES IN SUPPORT OF THE ROYAL SAUDI AIR FORCE C-130J AIRCRAFT FLEET; PART OF THE MISSIONCARE TM EFFORT Key points: 1. Contract awarded for critical C-130J aircraft engine parts and field service. 2. Rolls-Royce Corporation is the sole provider, limiting competitive pricing. 3. The contract duration is 1819 days, indicating long-term reliance. 4. Firm Fixed Price contract type aims to control costs, but competition is key.

Value Assessment

Rating: questionable

The contract value of $28.3M for specialized aircraft engine support is significant. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract is not available for competition, indicating a sole-source award to Rolls-Royce Corporation. This lack of competition limits price discovery and may lead to higher costs for the government.

Taxpayer Impact: Taxpayer funds are committed without the benefit of competitive pricing, potentially resulting in a less cost-effective outcome.

Public Impact

Ensures continued operational readiness of the Royal Saudi Air Force's C-130J fleet. Supports a critical component of a key U.S. ally's air mobility capabilities. Highlights reliance on a single manufacturer for specialized aerospace components and services. Potential for cost overruns due to the absence of competitive pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Long contract duration may not reflect evolving market conditions.
Lack of transparency in pricing due to no-bid nature.

Positive Signals

Firm Fixed Price contract aims to provide cost certainty.
Supports a critical defense asset for an allied nation.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft engine manufacturing and maintenance. Spending in this area is often characterized by high technical barriers to entry and long product lifecycles, frequently leading to sole-source or limited competition scenarios.

Small Business Impact

The contract data does not indicate any subcontracting opportunities for small businesses. The nature of specialized aerospace manufacturing and support often involves large, established prime contractors.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency, which is responsible for ensuring contractor performance and compliance. However, the sole-source nature of the award warrants close oversight to ensure fair pricing and value.

Related Government Programs

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

Risk Flags

Sole-source award
Lack of competition
Potential for price escalation
Long contract duration
Reliance on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.3 million to ROLLS-ROYCE CORPORATION. IGF::OT::IGF FIELD SERVICE REPRESENTATIVES IN SUPPORT OF THE ROYAL SAUDI AIR FORCE C-130J AIRCRAFT FLEET; PART OF THE MISSIONCARE TM EFFORT

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 $28.3 million.

What is the period of performance?

Start: 2016-09-01. End: 2021-08-25.

What specific technical or proprietary reasons necessitate a sole-source award for these C-130J engine services?

Sole-source awards in defense contracting are typically justified by unique technical requirements, proprietary technology, or the unavailability of alternative solutions. For specialized aircraft components like C-130J engines, the original equipment manufacturer often holds unique knowledge, tooling, and intellectual property essential for maintenance and support, making competition infeasible without significant government investment in developing alternative capabilities.

How is the government ensuring fair and reasonable pricing without competitive bids?

In sole-source situations, the government relies on robust cost and price analysis techniques. This involves scrutinizing the contractor's proposed costs, including labor, materials, and overhead, and comparing them against historical data, industry benchmarks, and independent cost estimates. The Defense Contract Management Agency plays a crucial role in this negotiation and oversight process to achieve a fair and reasonable price.

What is the long-term strategy for mitigating risks associated with sole-source reliance on Rolls-Royce for C-130J engine support?

Mitigation strategies may include exploring potential second-source qualification efforts, negotiating long-term agreements with favorable terms, or investing in organic government capabilities for certain maintenance tasks. Additionally, fostering competition for future engine models or upgrades can help reduce long-term sole-source dependency and ensure better value.

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

Solicitation ID: FA855316R0001

Offers Received: 1

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,282,974

Exercised Options: $28,282,974

Current Obligation: $28,282,974

Subaward Activity

Number of Subawards: 113

Total Subaward Amount: $163,530,584

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline