Air Force's $1.65B Adaptive Engine Transition Program contract awarded to RTX Corporation
Contract Overview
Contract Amount: $1,651,199,674 ($1.7B)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2016-06-30
End Date: 2024-06-30
Contract Duration: 2,922 days
Daily Burn Rate: $565.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: ADAPTIVE ENGINE TRANSITION PROGRAM (AETP)
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118
Plain-Language Summary
Department of Defense obligated $1.65 billion to RTX CORPORATION for work described as: ADAPTIVE ENGINE TRANSITION PROGRAM (AETP) Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant investment in advanced engine technology development. 3. Long contract duration suggests a phased approach to development and integration. 4. Focus on next-generation propulsion systems for future aircraft. 5. Potential for high-value follow-on production contracts. 6. RTX Corporation is a major defense contractor with extensive experience in aerospace.
Value Assessment
Rating: fair
The total value of $1.65 billion over an 8-year period represents a substantial investment in research and development for advanced engine technology. Without a competitive bidding process, it is difficult to benchmark the value for money. However, the cost-plus-incentive-fee structure aims to control costs while incentivizing performance. Comparisons to similar R&D contracts for advanced propulsion systems would be necessary for a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, RTX Corporation, was considered. This approach bypasses the typical competitive bidding process, which can lead to a lack of price discovery and potentially higher costs for the government. The justification for a sole-source award would likely stem from unique capabilities or proprietary technology held by RTX Corporation.
Taxpayer Impact: The absence of competition means taxpayers may not benefit from the cost savings typically achieved through a bidding war among multiple vendors.
Public Impact
Benefits the Department of the Air Force by advancing critical engine technology. Services delivered include research, development, and testing of adaptive engine components. Geographic impact is primarily within Connecticut, where RTX Corporation is headquartered. Workforce implications include highly skilled engineering and technical jobs in the aerospace sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Long-term nature of the contract could lead to cost overruns if not managed effectively.
- Reliance on a single contractor for critical technology development.
Positive Signals
- Investment in cutting-edge technology that could provide a significant military advantage.
- Potential for innovation and breakthroughs in engine efficiency and performance.
- RTX Corporation's established expertise in aerospace and defense.
Sector Analysis
The Adaptive Engine Transition Program (AETP) falls within the broader aerospace and defense sector, specifically focusing on aircraft engine manufacturing. This contract represents a significant investment in the future of military aviation propulsion. The market for advanced aerospace components is dominated by a few large, specialized contractors, making sole-source awards for highly technical R&D programs not uncommon, though still subject to scrutiny regarding value.
Small Business Impact
This contract does not appear to have a small business set-aside component, as it was awarded directly to RTX Corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The focus on advanced R&D for a major defense system may limit opportunities for broad small business participation, unless specific components or services are outsourced to smaller firms.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. The cost-plus-incentive-fee structure implies performance metrics and cost targets that will be monitored. Transparency may be limited due to the sole-source nature and the classified or sensitive aspects of advanced engine technology. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.
Related Government Programs
- Advanced Tactical Engines
- Next Generation Air Dominance
- Propulsion Systems Research and Development
- Air Force Weapon System Development
Risk Flags
- Sole-source award
- High contract value
- Long contract duration
- Advanced technology development
Tags
defense, air-force, rtx-corporation, aircraft-engine-manufacturing, research-and-development, sole-source, cost-plus-incentive-fee, connecticut, definitive-contract, advanced-technology
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.65 billion to RTX CORPORATION. ADAPTIVE ENGINE TRANSITION PROGRAM (AETP)
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 $1.65 billion.
What is the period of performance?
Start: 2016-06-30. End: 2024-06-30.
What is the specific technological advancement expected from the Adaptive Engine Transition Program?
The Adaptive Engine Transition Program (AETP) aims to develop and mature advanced engine technologies that offer significant improvements in fuel efficiency, thrust, and thermal management compared to current engines. These adaptive cycles allow engines to change their bypass ratio and other characteristics to optimize performance across a wider range of flight conditions, from loitering at lower speeds to high-speed dash maneuvers. The goal is to provide a propulsion system that enhances the capabilities of future fighter aircraft, potentially improving range, survivability, and overall mission effectiveness.
How does the cost-plus-incentive-fee (CPIF) contract structure aim to control costs for this sole-source award?
A Cost-Plus-Incentive-Fee (CPIF) contract is designed to share cost risks and rewards between the government and the contractor. The government agrees to pay the contractor's allowable costs plus a predetermined fee. This fee is adjusted based on whether the final costs are below or above the target cost, with incentives for the contractor to control costs and achieve performance targets. For this sole-source AETP contract, the CPIF structure incentivizes RTX Corporation to manage development expenses efficiently and meet specific performance milestones related to the adaptive engine technology, thereby providing some level of cost control despite the lack of direct price competition.
What are the potential risks associated with a sole-source award for a program of this magnitude?
The primary risk of a sole-source award for a program like the Adaptive Engine Transition Program is the potential for inflated costs due to the absence of competitive pressure. Without competing bids, RTX Corporation may have less incentive to minimize expenses or offer the most cost-effective solutions. Furthermore, the government lacks the benefit of comparing different technological approaches or pricing structures from multiple vendors. This can also lead to a reduced focus on innovation if the contractor perceives less urgency to outperform rivals. Ensuring robust oversight and clear performance metrics becomes even more critical in sole-source situations.
What is RTX Corporation's track record with similar advanced engine development programs?
RTX Corporation, through its Pratt & Whitney division, has a long and extensive history in developing advanced aircraft engines for both military and commercial applications. They have been instrumental in programs such as the F119 engine for the F-22 Raptor and the F135 engine for the F-35 Lightning II, both of which incorporate sophisticated technologies. Their experience includes managing complex R&D efforts, integrating new technologies, and meeting stringent performance requirements for next-generation propulsion systems. This established expertise provides a strong foundation for undertaking the AETP.
How does this contract align with the Air Force's broader modernization strategy?
This contract is a cornerstone of the Air Force's strategy to maintain air superiority by investing in next-generation capabilities. The AETP directly supports the development of engines for future platforms, such as the Next Generation Air Dominance (NGAD) fighter. By advancing propulsion technology, the Air Force aims to ensure its future combat aircraft possess superior performance characteristics, including speed, range, efficiency, and thermal management, which are critical for operating in contested environments and countering evolving threats. This investment is crucial for technological deterrence and future operational effectiveness.
What are the potential long-term implications for the aerospace propulsion market?
The successful development and integration of adaptive engine technology through this program could significantly reshape the aerospace propulsion market. It may set new industry standards for engine performance and efficiency, driving competitors to invest in similar adaptive cycle technologies. This could lead to a new generation of aircraft engines across various platforms, not just military but potentially influencing commercial aviation in the future. Furthermore, it solidifies the position of companies like RTX Corporation as leaders in advanced aerospace R&D, potentially influencing future contract awards and market dynamics.
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: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 400 MAIN ST, EAST HARTFORD, CT, 06118
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,736,169,046
Exercised Options: $1,736,169,046
Current Obligation: $1,651,199,674
Actual Outlays: $76,357,001
Subaward Activity
Number of Subawards: 26
Total Subaward Amount: $5,766,125
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-06-30
Current End Date: 2024-06-30
Potential End Date: 2024-06-30 00:00:00
Last Modified: 2025-07-24
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