DoD awards $41.2M F117 engine contract to RTX Corporation for Australian F-15s

Contract Overview

Contract Amount: $41,255,052 ($41.3M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2006-12-01

End Date: 2007-12-31

Contract Duration: 395 days

Daily Burn Rate: $104.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: LETTER CONTRACT FOR F117 INSTALL ENGINES FOR AUSTRALIA

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $41.3 million to RTX CORPORATION for work described as: LETTER CONTRACT FOR F117 INSTALL ENGINES FOR AUSTRALIA Key points: 1. Contract awarded to a single, established provider of these specific engines. 2. Limited competition suggests potential for higher pricing than a fully competed contract. 3. Fixed-price contract with economic price adjustment introduces some cost fluctuation risk. 4. Contract duration of approximately one year aligns with immediate operational needs. 5. This award falls within the broader category of aircraft engine manufacturing. 6. No small business set-aside was applied to this procurement.

Value Assessment

Rating: fair

The contract value of $41.2 million for F117 engines appears to be a standard procurement for specialized aircraft components. Without specific per-unit cost data or comparable contract benchmarks for F117 engines, a precise value-for-money assessment is challenging. The fixed-price with economic price adjustment structure aims to balance cost certainty with market fluctuations, but could lead to costs exceeding initial estimates if economic conditions change significantly. The sole-source nature of the award limits the ability to benchmark against competitive bids.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, RTX Corporation, was solicited. This approach is typically used when a specific product or service is available only from a single source, or when there's a compelling justification for avoiding full and open competition. The lack of competition means that price discovery through market forces was not utilized, potentially leading to a higher price than if multiple bidders had competed.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government did not have multiple offers to choose from to secure the best possible price.

Public Impact

The primary beneficiaries are the Australian Air Force, which will receive essential engine components for their F-15 aircraft. The contract ensures the operational readiness and sustainment of a key defense asset for an allied nation. This procurement supports the U.S. foreign military sales program, strengthening international partnerships. The contract impacts the aerospace manufacturing sector, specifically engine component production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Economic price adjustment introduces potential for cost overruns.
Lack of transparency in the sole-source justification process.

Positive Signals

Ensures availability of critical engine components for allied defense.
Award to a known contractor with established expertise in F117 engines.
Supports U.S. foreign military sales objectives.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft engine manufacturing and parts. The market for specialized military aircraft engines is highly concentrated, with a few major players dominating. RTX Corporation (through its Pratt & Whitney division) is a key provider of such engines. Spending in this area is driven by defense modernization, sustainment of existing fleets, and foreign military sales, often involving high-value, low-volume procurements.

Small Business Impact

This contract did not include a small business set-aside, as it was awarded on a sole-source basis to a large corporation. There is no indication of subcontracting opportunities for small businesses within the provided data. The focus of this procurement is on specialized, high-value components typically manufactured by prime contractors or their large subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management systems. As a sole-source award, the justification for not competing the contract would be subject to review. Transparency is limited due to the lack of a competitive bidding process. Inspector General oversight would apply to ensure proper use of funds and prevent fraud, waste, and abuse.

Related Government Programs

Foreign Military Sales Program
Aircraft Engine Procurement
F-15 Aircraft Sustainment
Defense Industrial Base

Risk Flags

Sole-source award lacks competitive pricing.
Economic price adjustment introduces cost variability.
Limited public data on specific engine performance benchmarks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.3 million to RTX CORPORATION. LETTER CONTRACT FOR F117 INSTALL ENGINES FOR AUSTRALIA

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 $41.3 million.

What is the period of performance?

Start: 2006-12-01. End: 2007-12-31.

What is the specific justification for awarding this contract on a sole-source basis to RTX Corporation?

The provided data indicates the contract was awarded on a sole-source basis ('NOT AVAILABLE FOR COMPETITION'). Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, such as when the item is unique, proprietary, or essential for interoperability with existing systems. For aircraft engines like the F117, this often relates to proprietary technology, specialized manufacturing capabilities, or the need for seamless integration and support with existing airframes. A formal justification and approval document (J&A) would normally be required by the Department of Defense to document the rationale for bypassing full and open competition, detailing why other sources cannot meet the requirement.

How does the 'fixed price with economic price adjustment' (FPEPA) contract type affect cost certainty for this award?

A Fixed Price with Economic Price Adjustment (FPEPA) contract aims to provide some cost stability while acknowledging potential fluctuations in specific economic factors, such as labor or material costs. For this $41.2 million contract for F117 engines, the 'economic price adjustment' clause means the final price could increase or decrease based on pre-defined economic indicators. While the base price is fixed, the adjustment mechanism introduces a degree of uncertainty regarding the final expenditure. This is often used in long-lead-time procurements or those subject to volatile commodity prices. For taxpayers, it means the final cost might deviate from the initial $41.2 million figure, depending on market conditions during the contract period.

What is the typical lifecycle cost associated with F117 engines, and how does this contract fit into that?

The F117 engine is a component of the F-15 Eagle fighter jet. The lifecycle cost of such engines is substantial, encompassing not only the initial procurement but also ongoing maintenance, spare parts, overhauls, and eventual upgrades or replacements. This $41.2 million contract appears to cover the acquisition of new engines or critical components for a specific batch of aircraft, likely for the Australian F-15 fleet as part of a foreign military sale. It represents a portion of the overall sustainment and operational cost for these aircraft, rather than the total lifecycle expenditure. Detailed lifecycle cost data is usually proprietary and managed by the respective air forces.

What is RTX Corporation's track record with supplying F117 engines or similar defense aerospace components?

RTX Corporation, through its Pratt & Whitney division, has a long and established history of manufacturing and supporting military aircraft engines, including the F117. Pratt & Whitney is a major defense contractor with extensive experience in producing engines for various fighter jets and military aircraft. Their track record with the F117 specifically involves supplying engines for the F-15 platform, which has been in service for decades. This includes providing engines for both U.S. and allied air forces. Their extensive experience suggests a high level of technical expertise and manufacturing capability relevant to this contract.

Are there any known performance issues or risks associated with the F117 engine that this contract might be addressing?

The F117 engine, part of the F-15's propulsion system, has generally been considered a reliable engine. However, like all complex machinery, it is subject to wear and tear, requiring regular maintenance and component replacement. This contract, being for new engines or parts, likely aims to ensure the continued operational readiness and performance of the Australian F-15 fleet. Without specific performance data or incident reports related to the F117 in the public domain, it's difficult to ascertain if this award is directly addressing known performance issues. It is more probable that this is a routine procurement for sustainment or fleet expansion/modernization.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 400 MAIN ST, EAST HARTFORD, CT, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $42,974,231

Exercised Options: $42,974,231

Current Obligation: $41,255,052

Contract Characteristics

Cost or Pricing Data: NO

Timeline