DoD's $954M Contract for Aircraft Engine Parts with RTX Corporation Lacked Competition

Contract Overview

Contract Amount: $953,978,873 ($954.0M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2005-03-04

End Date: 2013-03-31

Contract Duration: 2,949 days

Daily Burn Rate: $323.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $954.0 million to RTX CORPORATION for work described as: Key points: 1. Significant spending of $954M on aircraft engine parts. 2. Sole-source award to RTX Corporation raises competition concerns. 3. Long contract duration (2005-2013) may indicate potential for price escalation. 4. The sector is critical for defense readiness, but lacks competitive pressure in this instance.

Value Assessment

Rating: questionable

The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing represents fair market value. The lack of competition suggests potential overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The absence of competition likely resulted in higher prices than could have been achieved through a competitive process, impacting taxpayer funds.

Public Impact

Taxpayers may have overpaid due to the lack of competitive bidding. The long duration of the contract could mask inefficiencies or price increases over time. Dependence on a single supplier for critical aircraft engine parts poses a strategic risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing

Positive Signals

Critical defense procurement
Established supplier relationship

Sector Analysis

This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the aerospace and defense industry. Spending in this area is often high due to the complexity and specialized nature of the products, but competition is crucial for cost control.

Small Business Impact

The data indicates this contract was awarded to RTX Corporation, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, missing an opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants further review by oversight bodies to ensure the pricing was justified and that future procurements in this category are competed whenever possible to maximize value.

Related Government Programs

Aircraft Engine and Engine Parts Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited transparency
Long contract duration without clear performance reviews
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $954.0 million to RTX CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is RTX 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 $954.0 million.

What is the period of performance?

Start: 2005-03-04. End: 2013-03-31.

What was the justification for awarding this contract on a sole-source basis, and were alternatives explored?

The justification for a sole-source award is not provided in the data. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services. However, without further documentation, it's unclear if this was truly the only option or if market research was adequately conducted to identify potential competitors.

How does the per-unit cost of these engine parts compare to industry benchmarks or previous contracts?

A direct per-unit cost benchmark is not available in the provided data. Given the sole-source nature and long duration, it is difficult to ascertain if the pricing is competitive. A detailed cost analysis would be required to compare it against similar parts or historical pricing trends.

What measures were in place to ensure the effectiveness and quality of the engine parts delivered under this contract?

While the data specifies a 'FIRM FIXED PRICE' contract type, which incentivizes the contractor to control costs, it doesn't detail specific quality assurance or performance monitoring mechanisms. The Department of Defense likely has standard procedures for ensuring the effectiveness and quality of critical aircraft components, but these are not explicitly stated here.

Industry Classification

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

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 400 MAIN ST, EAST HARTFORD, CT, 06108

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline