DoD awards $110M letter contract to RTX for F117 engines for Australia, with no competition
Contract Overview
Contract Amount: $110,300,201 ($110.3M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2007-04-02
End Date: 2008-07-15
Contract Duration: 470 days
Daily Burn Rate: $234.7K/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 13 EA F117-PW-100 FMS ENGINES FOR AUSTRALIA
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108
Plain-Language Summary
Department of Defense obligated $110.3 million to RTX CORPORATION for work described as: LETTER CONTRACT FOR 13 EA F117-PW-100 FMS ENGINES FOR AUSTRALIA Key points: 1. High value contract for critical aircraft components. 2. Sole-source award limits price discovery and competition. 3. Potential for economic price adjustments adds cost uncertainty. 4. Focus on foreign military sales highlights international partnerships.
Value Assessment
Rating: questionable
The contract value is $110,300,201. Without a competitive process, it's difficult to assess if this price is optimal. The fixed-price with economic price adjustment structure introduces potential for cost increases.
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 the government's ability to achieve the best possible price through market forces.
Taxpayer Impact: The lack of competition and potential for economic price adjustments may lead to higher costs for taxpayers compared to a competitively awarded contract.
Public Impact
Ensures continued operational readiness for Australian Air Force aircraft. Supports a key international alliance through foreign military sales. Impacts the aerospace manufacturing sector, specifically engine production.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Economic price adjustment clause
- Lack of transparency in pricing
Positive Signals
- Supports allied military capabilities
- Ensures availability of critical components
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector. Spending in this area is crucial for defense readiness and international partnerships, but competitive procurement is vital to manage costs effectively.
Small Business Impact
This contract was awarded to RTX Corporation, a large business. There is no indication of small business participation in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure fair pricing and justification for the lack of competition. Further review of the justification for other than full and open competition is recommended.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Economic price adjustment
- Potential for cost overruns
- Limited transparency
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ct, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $110.3 million to RTX CORPORATION. LETTER CONTRACT FOR 13 EA F117-PW-100 FMS 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 $110.3 million.
What is the period of performance?
Start: 2007-04-02. End: 2008-07-15.
What is the justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION'. A full and open competition was likely deemed impractical or impossible for reasons not detailed here, such as unique technical requirements, urgent need, or existing sole-source supplier relationships. Further investigation into the specific justification document is necessary to understand the rationale.
What is the potential financial risk associated with the economic price adjustment clause?
The economic price adjustment (EPA) clause allows for changes in contract price based on fluctuations in specified economic factors, such as labor or material costs. This introduces uncertainty and potential for cost overruns for the government if these factors increase significantly beyond initial projections, making the final cost unpredictable.
How does this sole-source award impact the overall effectiveness of defense spending?
Sole-source awards can reduce the effectiveness of defense spending by potentially leading to higher prices and less innovation compared to competitive procurements. While sometimes necessary for specific reasons, a pattern of sole-source contracts can diminish the government's leverage in negotiations and may not always secure the best value for taxpayer dollars.
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: $110,300,201
Exercised Options: $110,300,201
Current Obligation: $110,300,201
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2007-04-02
Current End Date: 2008-07-15
Potential End Date: 2008-07-15 00:00:00
Last Modified: 2009-09-23
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