DoD's $25.6M C-130 FMS support contract for India awarded to Rolls-Royce Corporation

Contract Overview

Contract Amount: $25,574,799 ($25.6M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2017-01-11

End Date: 2020-10-31

Contract Duration: 1,389 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF FSR SUPPORT FOR C-130 FMS COUNTRY INDIA

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $25.6 million to ROLLS-ROYCE CORPORATION for work described as: IGF::CT::IGF FSR SUPPORT FOR C-130 FMS COUNTRY INDIA Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 1389 days suggests a long-term support requirement. 3. Fixed-price contract type aims to control costs for the government. 4. The contract supports foreign military sales, indicating international cooperation. 5. Rolls-Royce Corporation is a significant player in the aerospace engine market. 6. The contract value is substantial, reflecting the complexity of aircraft support.

Value Assessment

Rating: fair

The contract value of approximately $25.6 million for C-130 FMS support is difficult to benchmark without specific details on the services provided. As a sole-source award, direct comparison to competitive bids is not possible. However, given the nature of specialized aircraft engine support, the pricing would need to be assessed against Rolls-Royce's standard commercial rates and any established government pricing agreements for similar foreign military sales cases. The firm fixed-price structure provides some cost certainty, but the absence of competition raises concerns about achieving optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a single source possesses unique capabilities or when urgent needs preclude a competitive process. The lack of multiple bidders means that price discovery through market forces was not leveraged, potentially leading to higher costs for the government compared to a competitive scenario.

Taxpayer Impact: Taxpayers may bear a higher cost due to the absence of competitive bidding, as the government did not benefit from multiple offers to drive down prices.

Public Impact

The primary beneficiary is the country of India, receiving critical support for its C-130 aircraft fleet. Services delivered include support for C-130 aircraft engines, ensuring operational readiness. The geographic impact is primarily in India, where the supported aircraft operate. Workforce implications may involve specialized technical support personnel from Rolls-Royce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns if not closely managed due to lack of competition.

Positive Signals

Firm fixed-price contract provides cost certainty.
Rolls-Royce is a known entity with established expertise in aircraft engines.
Contract supports a critical foreign military sales program.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft engine manufacturing and support. The market for specialized aircraft components and maintenance is dominated by a few key players like Rolls-Royce. This contract represents a portion of the broader spending on defense equipment and sustainment for allied nations, which is a significant segment of the global aerospace industry. Benchmarking would involve comparing this to other FMS support contracts for similar aircraft platforms.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded to a large corporation, Rolls-Royce. There is no explicit information regarding subcontracting opportunities for small businesses within this award. The focus is on direct support from the prime contractor, potentially limiting the direct impact on the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes the contractor to manage costs. Transparency is limited due to the sole-source nature of the award, but contract modifications and performance reports would be subject to internal government review.

Related Government Programs

Foreign Military Sales Program
C-130 Hercules Aircraft Sustainment
Aircraft Engine Maintenance and Repair
Defense Logistics Agency Support Contracts

Risk Flags

Sole-source award
Potential for uncompetitive pricing
Long-term support requirement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.6 million to ROLLS-ROYCE CORPORATION. IGF::CT::IGF FSR SUPPORT FOR C-130 FMS COUNTRY INDIA

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 $25.6 million.

What is the period of performance?

Start: 2017-01-11. End: 2020-10-31.

What specific engine models and support services are covered under this contract?

The provided data indicates the contract is for 'IGF::CT::IGF FSR SUPPORT FOR C-130 FMS COUNTRY INDIA'. 'IGF' likely refers to 'Integrated Ground Support' or a similar logistical framework, and 'FSR' often denotes 'Field Service Representative' or 'Full Service Repair'. Given the contractor is Rolls-Royce Corporation, a primary manufacturer of the AE 2100 turboprop engines used in the C-130J Super Hercules, it is highly probable that this contract covers maintenance, repair, overhaul, and potentially field support services for these specific engines. The scope would likely include spare parts, technical assistance, and on-site support to ensure the operational readiness of India's C-130 fleet. Detailed specifications would be found in the contract's Statement of Work (SOW).

How does the $25.6 million contract value compare to typical C-130 engine support contracts?

Comparing the $25.6 million contract value requires context on the duration and scope of services. This contract spans from January 11, 2017, to October 31, 2020, a period of approximately 3.8 years. If this represents a comprehensive support package including parts, labor, and field services for a significant portion of India's C-130 fleet, the annual cost would be around $6.7 million. This figure needs to be benchmarked against other Foreign Military Sales (FMS) support contracts for similar platforms and engine types. Rolls-Royce's AE 2100 engines are complex and expensive to maintain. Without access to specific FMS pricing data or competitive bids, it's challenging to definitively state if this represents good or poor value, but it aligns with the expected cost of supporting advanced military aircraft engines over several years.

What is the justification for awarding this contract on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is capable of providing the required goods or services. For Rolls-Royce Corporation and C-130J engine support, the justification likely stems from their status as the original equipment manufacturer (OEM). As the OEM, Rolls-Royce possesses unique technical data, proprietary tooling, specialized knowledge, and potentially exclusive rights to manufacture or supply critical spare parts for their engines. Other entities may lack the necessary certifications, expertise, or access to proprietary information required for effective and safe maintenance of these advanced engines. The government would have likely conducted a thorough market research effort to confirm that no other contractor could meet the requirements, especially for specialized support critical to the operational readiness of a foreign partner's military assets.

What are the potential risks associated with a sole-source contract for aircraft engine support?

The primary risk of a sole-source contract is the lack of price competition, which can lead to inflated costs for the government and taxpayers. Without competing bids, the contractor has less incentive to offer the lowest possible price. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and negotiation power. Furthermore, if the sole-source provider experiences financial difficulties or operational issues, it could significantly disrupt the supply chain for critical support services. Effective oversight and robust negotiation are crucial to mitigate these risks, ensuring that the government receives fair value and maintains adequate control over the contract's performance and cost.

How does this contract fit into the broader context of US-India defense cooperation?

This contract is a component of the broader US-India defense cooperation, specifically within the framework of Foreign Military Sales (FMS). The US provides military equipment and services to India to enhance its defense capabilities and interoperability with US forces. Supporting India's C-130 aircraft, which are used for transport and logistical operations, contributes to India's regional security posture and its ability to participate in joint exercises or humanitarian missions. Such FMS agreements strengthen the strategic partnership between the two nations, fostering trust and mutual security interests. The provision of sustainment and support services, like those covered by this contract, is crucial for ensuring the long-term effectiveness of US-provided military assets.

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: FA855316R0007

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: $25,574,799

Exercised Options: $25,574,799

Current Obligation: $25,574,799

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $68,089,598

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline