Rolls-Royce Corporation awarded $66.4M for C-130 FMS MC, supporting French Air Force aircraft

Contract Overview

Contract Amount: $66,446,555 ($66.4M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2019-12-21

End Date: 2026-12-20

Contract Duration: 2,556 days

Daily Burn Rate: $26.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-130 FMS MC - FRANCE AIR FORCE

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $66.4 million to ROLLS-ROYCE CORPORATION for work described as: C-130 FMS MC - FRANCE AIR FORCE Key points: 1. Contract awarded to a single, established supplier indicates potential for limited price negotiation. 2. Long-term contract duration suggests a sustained need for engine support services. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Foreign Military Sales (FMS) context implies international cooperation and defense support. 5. The contract is for aircraft engine and parts manufacturing, a specialized sector. 6. Delivery order under a larger contract structure suggests phased execution and payment.

Value Assessment

Rating: fair

The contract value of $66.4 million over approximately 7 years for C-130 aircraft engine support appears within a reasonable range for specialized aerospace components and maintenance, especially considering it's for foreign military sales. Benchmarking against similar FMS contracts for engine support would provide a clearer picture of value for money. The firm fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns, which can sometimes lead to higher initial pricing to account for contingencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, intellectual property, or is the sole authorized provider of necessary parts or services. The lack of competition means that price discovery through market forces was limited, and the government relied on negotiation to establish a fair price.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers compared to competitively bid contracts, as the absence of multiple bidders reduces downward price pressure.

Public Impact

The primary beneficiary is the French Air Force, which receives critical support for its C-130 aircraft fleet. Services delivered include the provision of aircraft engines and engine parts, ensuring operational readiness. The geographic impact is primarily in France, supporting a key NATO ally's defense capabilities. Workforce implications are likely within Rolls-Royce Corporation's manufacturing and support facilities, potentially in Indiana where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing advantages for the government.
Potential for price escalation over the contract's multi-year duration.
Dependence on a single supplier for critical aircraft components.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Long-term contract provides stability and predictability for sustainment.
Supports a key allied nation's military operational capability.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engines and parts. The market for military aircraft sustainment is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and long product lifecycles. Rolls-Royce is a major global player in this segment. Comparable spending benchmarks would involve analyzing other FMS contracts for similar engine types or aircraft platforms, as well as domestic military engine support contracts.

Small Business Impact

The contract data indicates that small business participation was not a stated requirement or focus for this award (ss: false, sb: false). As a sole-source award to a large corporation, there are limited direct set-aside opportunities. However, Rolls-Royce may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data. The impact on the small business ecosystem is likely indirect, depending on Rolls-Royce's subcontracting practices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and FMS oversight mechanisms. Accountability measures are embedded in the firm fixed-price terms, requiring delivery of specified goods and services. Transparency is generally maintained through contract databases, though specific performance metrics and detailed financial reporting may be subject to FMS agreements and internal DoD policies. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales Program
C-130 Hercules Aircraft Sustainment
Aerospace Engine Manufacturing
Defense Logistics Agency (DLA) Support Contracts
Aircraft Parts and Components Procurement

Risk Flags

Sole-source award
Potential for cost overruns if not managed
Long-term dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.4 million to ROLLS-ROYCE CORPORATION. C-130 FMS MC - FRANCE AIR FORCE

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 $66.4 million.

What is the period of performance?

Start: 2019-12-21. End: 2026-12-20.

What is the track record of Rolls-Royce Corporation in delivering similar engine support contracts, particularly under FMS arrangements?

Rolls-Royce Corporation has a long and established history as a major manufacturer and maintainer of aircraft engines, including those used in military applications like the C-130. They are a primary supplier for many Western military aircraft. Their experience with Foreign Military Sales (FMS) is extensive, having supported numerous allied nations through various defense cooperation programs. While specific performance data for this exact contract is not publicly detailed, Rolls-Royce's general track record in the aerospace industry is characterized by advanced engineering and significant production capacity. However, like any large defense contractor, they have faced scrutiny in the past regarding contract costs and performance on certain programs. A detailed review would require examining past performance evaluations and any documented issues related to FMS engine support.

How does the pricing of this contract compare to similar C-130 engine support contracts, either domestically or internationally?

Direct, apples-to-apples comparisons for this specific contract are challenging due to several factors. Firstly, it's a sole-source award, which inherently limits direct price benchmarking against competitive bids. Secondly, it's an FMS contract, meaning pricing can be influenced by factors beyond standard domestic procurement, such as specific government-to-government agreements, foreign country requirements, and the inclusion of support services tailored for international operations. Rolls-Royce's pricing for engines and parts is generally considered premium due to the advanced technology and quality assurance involved. To assess value, one would need to compare the unit costs of engines, parts, and labor rates against other FMS contracts for similar C-130 engine variants (e.g., T56 engines) or against domestic contracts for comparable engine sustainment programs, adjusting for differences in scope, duration, and support levels.

What are the primary risks associated with this sole-source contract for aircraft engine parts?

The primary risks associated with this sole-source contract are centered around cost and supplier dependency. Without competition, there is a reduced incentive for the contractor (Rolls-Royce) to offer the lowest possible price, potentially leading to higher costs for the French Air Force and, by extension, the U.S. taxpayer if FMS administrative fees are involved. There's also the risk of vendor lock-in; the French Air Force becomes dependent on Rolls-Royce for critical parts and expertise, making it difficult and costly to switch suppliers in the future. Furthermore, sole-source contracts can sometimes be susceptible to scope creep or price increases during the contract term if not managed rigorously. Performance risk, while mitigated by the firm fixed-price structure, still exists if the contractor faces unforeseen production issues or quality control lapses.

How effective is the firm fixed-price (FFP) contract type in ensuring program effectiveness and cost control for engine sustainment?

The firm fixed-price (FFP) contract type is generally considered effective for ensuring program effectiveness and cost control when the scope of work is well-defined and risks are understood. For aircraft engine sustainment, FFP shifts the primary financial risk of cost overruns to the contractor (Rolls-Royce). This incentivizes the contractor to manage costs efficiently and perform the work within the agreed-upon price. It provides cost certainty for the buyer (the French Air Force via FMS). However, for complex sustainment requiring evolving support or unforeseen technical challenges, FFP can sometimes lead contractors to cut corners on quality or service to protect their profit margin, or to negotiate higher prices upfront to cover perceived risks. Effective oversight is still crucial to ensure the contractor meets performance standards and quality requirements.

What are the historical spending patterns for C-130 sustainment or similar aircraft engine support within the Department of Defense or FMS?

Historical spending patterns for C-130 sustainment and similar military aircraft engine support, both within the Department of Defense (DoD) and through FMS, indicate a consistent and significant investment. The C-130 platform has been in service for decades, necessitating ongoing sustainment, maintenance, repair, and parts replacement. Spending typically involves large, multi-year contracts, often with a mix of fixed-price and cost-plus elements, depending on the nature of the services (e.g., parts procurement vs. depot-level maintenance). FMS spending for aircraft sustainment represents a substantial portion of the overall FMS budget, reflecting the global reliance on U.S. military equipment. Trends show a continuous need for engine overhaul, component upgrades, and spare parts, driven by flight hours and aging fleets. Specific dollar amounts vary greatly year-to-year and contract-to-contract, but the overall category represents billions of dollars annually across the DoD and its FMS partners.

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: FA855317R0011

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: $106,152,377

Exercised Options: $66,446,555

Current Obligation: $66,446,555

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $36,169,657

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA855320D0003

IDV Type: IDC

Timeline