DoD awards $8.8M Rolls-Royce contract for C-130J engine parts, raising value-for-money questions

Contract Overview

Contract Amount: $8,805,373 ($8.8M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2025-12-15

End Date: 2028-11-20

Contract Duration: 1,071 days

Daily Burn Rate: $8.2K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C130J ENGINE PARTS FOR AUSTRALIA

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $8.8 million to ROLLS-ROYCE CORPORATION for work described as: C130J ENGINE PARTS FOR AUSTRALIA Key points: 1. Contract awarded to a single supplier, limiting price competition and potentially increasing costs. 2. The firm-fixed-price contract type shifts risk to the contractor, but the lack of competition is a concern. 3. Performance period extends over three years, suggesting a sustained need for these critical aircraft components. 4. The specific nature of the parts indicates a focus on maintaining operational readiness for the C-130J fleet. 5. This award falls within the Aircraft Engine and Engine Parts Manufacturing sector, a specialized industrial area.

Value Assessment

Rating: questionable

The contract value of $8.8 million for C-130J engine parts appears significant, especially given it was not competed. Without competitive bids, it is difficult to benchmark the pricing against market rates or similar contracts. The sole-source nature raises concerns about whether the government is achieving the best possible value for these essential components. Further analysis would be needed to determine if the price is reasonable compared to historical data or alternative suppliers, if any exist.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures, indicating a sole-source award. This means only one vendor, Rolls-Royce Corporation, was solicited for these specific C-130J engine parts. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the most cost-effective solution. It suggests that Rolls-Royce may be the only authorized or capable provider of these particular parts.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. The government loses the opportunity to secure potentially lower prices that would arise from multiple suppliers vying for the contract.

Public Impact

The U.S. Air Force benefits from the sustained availability of critical engine parts for its C-130J Super Hercules aircraft. This contract ensures the operational readiness and continued serviceability of a key tactical airlift platform. The geographic impact is primarily within the Department of Defense's operational theaters where C-130J aircraft are deployed. The workforce implications are indirect, supporting the manufacturing and supply chain jobs associated with Rolls-Royce and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially leads to higher costs for taxpayers.
Lack of competition raises concerns about the government securing the best value for critical aircraft components.
Contract duration of over three years requires careful monitoring to ensure continued performance and fair pricing.

Positive Signals

Firm-fixed-price contract type effectively transfers cost overrun risk to the contractor.
Award ensures continued operational readiness of essential C-130J aircraft.
Rolls-Royce is a known entity with established expertise in aircraft engine manufacturing.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft engine and engine parts manufacturing. This is a highly specialized industry dominated by a few major players like Rolls-Royce. The market for specific, proprietary engine components is often characterized by limited competition due to intellectual property, design specifications, and established relationships. Comparable spending benchmarks for such specialized parts are difficult to establish publicly due to proprietary pricing and the unique nature of each component.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by the 'ss' and 'sb' fields being false. There is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Rolls-Royce voluntarily engages small businesses in its supply chain for these parts.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management offices. The Air Force is the procuring agency. Transparency is limited due to the sole-source nature and lack of public competition details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, but specific oversight mechanisms for value-for-money assessment in sole-source awards are not detailed here.

Related Government Programs

C-130J Super Hercules Sustainment Programs
Defense Logistics Agency (DLA) Aviation Support
Foreign Military Sales (FMS) - Australia
Aircraft Parts and Components Procurement

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for above-market pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.8 million to ROLLS-ROYCE CORPORATION. C130J ENGINE PARTS FOR AUSTRALIA

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 $8.8 million.

What is the period of performance?

Start: 2025-12-15. End: 2028-11-20.

What is the track record of Rolls-Royce Corporation with the Department of Defense regarding C-130J engine parts?

Rolls-Royce Corporation has a long-standing relationship with the Department of Defense as a primary supplier of engines and engine parts for various aircraft, including the C-130J Super Hercules. Historical data indicates numerous contracts awarded to Rolls-Royce for sustainment, maintenance, and component supply for this platform. While specific details on past performance for C-130J engine parts are not provided in this data snippet, the company's established presence suggests a significant level of experience and a deep understanding of the military's requirements for these critical components. However, the absence of competition in this specific award warrants scrutiny of past pricing and performance to ensure continued value.

How does the $8.8 million contract value compare to similar C-130J engine part procurements?

Direct comparison of the $8.8 million contract value for C-130J engine parts is challenging without access to a broader dataset of similar procurements, especially those that were competitively bid. Given this award is sole-source, it is inherently difficult to establish a precise market benchmark. However, the value suggests a substantial quantity or high-cost nature of the specific engine components being procured. Historically, sustainment contracts for major military platforms can run into tens or hundreds of millions of dollars over their lifecycle. This $8.8 million award represents a segment of that larger sustainment effort. Further analysis would require comparing unit costs or total contract values for similar part categories, ideally from competitive solicitations.

What are the primary risks associated with this sole-source contract for C-130J engine parts?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, the government may not be securing the most cost-effective solution, leading to a higher overall expenditure for taxpayers. Another risk is vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting future negotiation leverage. There's also a risk related to supply chain disruptions if Rolls-Royce faces production issues, as there are no immediate alternative sources. Finally, ensuring the quality and timely delivery of parts remains a constant risk in any defense procurement, though mitigated by the firm-fixed-price structure.

What is the expected program effectiveness or outcome of this contract?

The expected outcome of this contract is the sustained operational readiness and availability of the C-130J Super Hercules aircraft fleet. By ensuring a steady supply of necessary engine parts, the Department of Defense can maintain the airworthiness of these critical tactical airlift platforms. This directly supports military operations, logistical support missions, humanitarian aid delivery, and troop transport capabilities. The effectiveness is measured by the extent to which the C-130J fleet can meet its mission requirements without significant downtime due to parts shortages. The firm-fixed-price nature aims to ensure cost certainty for the government in achieving these operational goals.

How does this contract fit into the historical spending patterns for C-130J sustainment?

This $8.8 million contract for C-130J engine parts represents a component of the broader, ongoing sustainment spending for the C-130J fleet. Historical spending patterns for such platforms typically involve significant, recurring investments in spare parts, maintenance, and upgrades over the aircraft's operational lifespan. Awards like this, even if sole-source, are part of a larger strategy to ensure fleet readiness. Analyzing this single award in isolation provides limited insight into overall historical spending trends. A comprehensive view would require examining total obligated amounts for C-130J sustainment over multiple fiscal years, including all contract types and sources, to understand the magnitude and evolution of these expenditures.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing

Product/Service Code: ENGINE ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: FA855325R0013

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, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $8,805,373

Exercised Options: $8,805,373

Current Obligation: $8,805,373

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline