DoD's $1.57B F119 Engine Sustainment Contract Awarded to RTX Corporation with No Competition

Contract Overview

Contract Amount: $1,573,068,089 ($1.6B)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2020-01-01

End Date: 2022-12-31

Contract Duration: 1,095 days

Daily Burn Rate: $1.4M/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F119 ENGINE SUSTAINMENT

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $1.57 billion to RTX CORPORATION for work described as: F119 ENGINE SUSTAINMENT Key points: 1. Significant sole-source award for critical engine sustainment raises questions about price discovery and potential cost efficiencies. 2. The contract's cost-plus-fixed-fee structure may incentivize higher spending, requiring robust oversight to manage costs. 3. Lack of competition suggests potential risks related to contractor performance and innovation. 4. The duration of the contract (1095 days) indicates a long-term commitment to sustainment activities. 5. This award represents a substantial portion of the Air Force's spending on engine support for its F119 fleet. 6. The absence of small business set-asides or subcontracting requirements warrants further investigation into broader economic impacts.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of comparable bids. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex sustainment, can lead to higher costs if not managed diligently. Without competitive pressure, it's difficult to ascertain if the government is receiving optimal value for the $1.57 billion obligated. The fixed fee component needs careful scrutiny to ensure it reflects the risk and effort involved.

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 approach is typically justified when only one responsible source can provide the required services, often due to unique capabilities, proprietary technology, or urgent needs. The lack of bidders means that price discovery through market forces was bypassed, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the contractor faces less pressure to offer the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of the Air Force and its operational readiness, ensuring the F119 engines powering critical aircraft remain functional. Services delivered include sustainment, maintenance, repair, and overhaul of F119 engines, crucial for national defense. The geographic impact is primarily within the United States, supporting Air Force bases and potentially contractor facilities. Workforce implications include the employment of highly skilled technicians and engineers at RTX Corporation and its supply chain partners.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Cost-plus-fixed-fee structure may incentivize higher spending without strict oversight.
Lack of transparency in pricing due to no competition.
Potential for contractor lock-in, making future transitions difficult and costly.
Absence of small business participation requirements.

Positive Signals

Ensures critical sustainment for essential military assets.
RTX Corporation is a known entity with established expertise in engine sustainment.
Contract provides long-term stability for engine support operations.
Fixed fee component provides some cost predictability within the CPFF structure.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technologies, and significant government procurement. Sustainment contracts like this are vital for maintaining the operational readiness of military fleets. The F119 engine is a key component for advanced fighter aircraft, making its reliable support a high priority. Spending on engine sustainment can represent a substantial portion of an aircraft program's total lifecycle cost.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions or explicit subcontracting requirements. The sole-source nature of the award further limits opportunities for small businesses to participate directly. This could mean that the economic benefits are concentrated within the prime contractor and its direct suppliers, potentially missing opportunities to foster broader small business engagement in the defense industrial base.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Given the sole-source and cost-plus-fixed-fee nature, rigorous oversight of expenditures, performance metrics, and adherence to contract terms is crucial. The Inspector General's office may conduct audits or investigations to ensure fiscal responsibility and prevent fraud, waste, and abuse.

Related Government Programs

F119 Engine Program
Air Force Engine Maintenance Contracts
Aerospace Engine Sustainment
Defense Contractor Support Services
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competition
Potential for cost overruns
No small business subcontracting requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.57 billion to RTX CORPORATION. F119 ENGINE SUSTAINMENT

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 $1.57 billion.

What is the period of performance?

Start: 2020-01-01. End: 2022-12-31.

What is RTX Corporation's track record with F119 engine sustainment prior to this award?

RTX Corporation, through its Pratt & Whitney division, has been the original equipment manufacturer (OEM) and primary sustainment provider for the F119 engine since its inception. Their track record involves extensive experience in engine design, production, and maintenance for various military platforms. This includes managing complex logistics, repair processes, and ensuring engine availability for critical Air Force operations. Prior contracts would have established their capabilities and pricing methodologies, which likely informed the basis for this sole-source award, though specific performance metrics and cost histories from previous agreements would be necessary for a full assessment.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for engine sustainment?

The Cost-Plus-Fixed-Fee (CPFF) structure is common for complex, high-risk, or R&D-intensive projects where costs are difficult to estimate accurately upfront. In this structure, the contractor is reimbursed for allowable costs plus a fixed fee, representing profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government but can be advantageous when scope is uncertain or innovation is required. However, it places a greater burden on the government to meticulously track and audit costs to prevent overspending. Other structures like Performance-Based Logistics (PBL) aim to incentivize outcomes and efficiency, potentially offering better value if well-defined.

What are the primary risks associated with a sole-source award for critical engine sustainment?

The primary risks of a sole-source award for critical engine sustainment include a lack of competitive pricing, potentially leading to inflated costs for the government. Without competition, there is reduced incentive for the contractor to innovate or improve efficiency beyond what is contractually required. Furthermore, the government may face challenges in negotiating favorable terms or addressing performance issues, as switching providers could be extremely difficult or impossible due to specialized knowledge and infrastructure. This can also lead to contractor lock-in, limiting future flexibility and potentially increasing long-term sustainment expenses.

What is the historical spending trend for F119 engine sustainment by the Department of Defense?

Historical spending on F119 engine sustainment by the Department of Defense has been substantial, reflecting the critical role of these engines in powering advanced fighter aircraft like the F-22 Raptor. While specific year-over-year figures for this particular contract are not detailed in the provided data, the total award of $1.57 billion over three years indicates a significant and consistent investment. Such sustainment programs typically involve multi-year commitments due to the long lifecycle of aircraft and engines. Trends generally show sustained or increasing spending on sustainment as fleets age and require more intensive maintenance, often favoring sole-source arrangements with the OEM due to specialized requirements.

How does the $1.57 billion award compare to the total lifecycle cost of the F119 engine program?

The $1.57 billion awarded for F119 engine sustainment over three years represents a significant portion of the program's operational budget. However, it is crucial to place this figure within the context of the engine's total lifecycle cost. The lifecycle cost includes research and development, procurement, sustainment (maintenance, repair, overhaul, spare parts), and eventual disposal. For advanced jet engines, sustainment costs over a 20-30 year operational life can often equal or even exceed the initial procurement cost. Therefore, while $1.57 billion is a large sum, it is likely a component of a much larger, multi-decade financial commitment to keeping the F119 engines operational.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 400 MAIN ST, EAST HARTFORD, CT, 06118

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,573,268,847

Exercised Options: $1,573,268,847

Current Obligation: $1,573,068,089

Actual Outlays: $35,156,938

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $190,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA861118D2850

IDV Type: IDC

Timeline