Air Force's $67M component improvement contract awarded to RTX Corporation for R&D

Contract Overview

Contract Amount: $67,040,543 ($67.0M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2020-11-25

End Date: 2027-02-12

Contract Duration: 2,270 days

Daily Burn Rate: $29.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: F119 COMPONENT IMPROVEMENT PROGRAM

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $67.0 million to RTX CORPORATION for work described as: F119 COMPONENT IMPROVEMENT PROGRAM Key points: 1. Contract focuses on research and development for component improvement, indicating a need for technological advancement. 2. Awarded to a single, large contractor, raising questions about potential lack of competitive pressure on pricing. 3. The contract duration extends over several years, suggesting a long-term investment in the specified R&D area. 4. Performance is tied to a cost-plus-fixed-fee structure, which can incentivize cost control but also carries inherent risks. 5. The specific NAICS code points to a specialized area within physical, engineering, and life sciences R&D. 6. This contract represents a significant investment within the Department of Defense's broader R&D portfolio.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific deliverables or comparable projects. The cost-plus-fixed-fee structure means actual costs will be reimbursed, plus a negotiated fee. While this can be appropriate for R&D where costs are uncertain, it necessitates robust oversight to ensure efficiency. Without more detail on the specific components being improved and the expected outcomes, a definitive value assessment is difficult. However, the substantial award amount suggests a critical need or complex development effort.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the requirement. The lack of competition means the government did not benefit from a bidding process that could drive down prices or foster innovation through diverse approaches. The justification for this sole-source award would need to be thoroughly documented to ensure it was indeed the most appropriate procurement strategy.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to optimize pricing. It also limits opportunities for other capable businesses to secure government contracts.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially broader Department of Defense operations through improved component technology. The contract aims to deliver advancements in physical, engineering, and life sciences components, enhancing military capabilities. Geographic impact is likely concentrated around RTX Corporation's research facilities, primarily in Connecticut. Workforce implications include employment for specialized researchers, engineers, and technicians within RTX Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation from a wider market.
Cost-plus-fixed-fee contracts require diligent oversight to manage costs effectively and prevent overruns.
Lack of detailed public information on specific R&D objectives makes independent performance assessment difficult.

Positive Signals

Award to a major defense contractor like RTX Corporation suggests access to established expertise and infrastructure.
Long contract duration indicates a commitment to addressing a significant technological need.
Focus on component improvement implies efforts to enhance reliability, performance, or reduce lifecycle costs of existing systems.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The aerospace and defense industry, where RTX Corporation is a major player, heavily relies on continuous R&D to maintain technological superiority. Comparable spending in this sector often involves significant investments in areas like advanced materials, propulsion systems, and electronic warfare. The market size for defense R&D is substantial, driven by evolving geopolitical landscapes and the need for cutting-edge military technology.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Given the sole-source nature and the award to a large prime contractor, the direct impact on small businesses is likely minimal unless they are subcontractors. There is no explicit mention of subcontracting plans for small businesses, which could be a missed opportunity to foster broader participation in defense R&D.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. Given the cost-plus-fixed-fee structure, rigorous financial oversight and performance monitoring are crucial to ensure funds are used efficiently and objectives are met. Transparency may be limited due to the nature of R&D and sole-source procurement, but contract modifications, progress reports, and final deliverables would be subject to review. The Inspector General's office could also provide oversight if specific concerns regarding fraud, waste, or abuse arise.

Related Government Programs

F119 Engine Component Improvement Program
Department of Defense Research and Development Contracts
Air Force Propulsion Systems R&D
RTX Corporation Defense Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.0 million to RTX CORPORATION. F119 COMPONENT IMPROVEMENT PROGRAM

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 $67.0 million.

What is the period of performance?

Start: 2020-11-25. End: 2027-02-12.

What is the specific technological advancement expected from this component improvement program?

The provided data does not detail the specific technological advancements expected from the F119 Component Improvement Program. The NAICS code 541715 indicates research and development in physical, engineering, and life sciences, but the exact nature of the 'component improvement' for the F119 engine (likely related to jet propulsion) is not specified. Typically, such programs aim to enhance performance, reliability, durability, or reduce the lifecycle costs of critical engine components. Further details would likely be found in the contract's statement of work or technical documentation, which are not publicly available in this dataset. Understanding the specific goals is crucial for assessing the program's success and value.

How does the cost-plus-fixed-fee (CPFF) structure influence cost control for this R&D contract?

The Cost-Plus-Fixed-Fee (CPFF) contract structure reimburses the contractor (RTX Corporation) for all allowable costs incurred during the performance of the contract, plus a fixed fee representing profit. For R&D, CPFF is often used when the scope of work is not precisely defined, and costs are uncertain. While the fixed fee incentivizes the contractor to manage costs to maximize profit, it can also lead to cost overruns if initial estimates are inaccurate. Effective government oversight is paramount to scrutinize incurred costs, ensure they are reasonable and allocable to the contract, and prevent scope creep that could inflate expenses without commensurate value. The fixed fee itself is negotiated upfront, providing some predictability in the contractor's profit margin.

What are the potential risks associated with awarding this contract on a sole-source basis?

The primary risk of a sole-source award is the lack of competitive pressure, which can lead to suboptimal pricing for the government. Without competing bids, there's less incentive for the contractor to offer the lowest possible price or to innovate aggressively to win the contract. This can result in higher costs for taxpayers. Additionally, sole-source awards can limit opportunities for other capable small and large businesses to participate in government contracting, potentially stifling broader market innovation and economic participation. The justification for the sole-source award must be robust to ensure it was truly necessary and that the government obtained fair and reasonable terms.

What is the historical spending pattern for component improvement programs within the Air Force's R&D budget?

The provided data focuses on a single contract and does not offer historical spending patterns for component improvement programs within the Air Force's R&D budget. To analyze historical trends, one would need access to broader contract databases or budget reports from the Department of Defense and the Air Force. Such analysis would involve identifying similar contracts (e.g., by NAICS code, PSC, or program description) over several fiscal years, examining award amounts, contract types, and competition levels. This would help determine if spending on component improvement R&D is increasing or decreasing, and whether it's typically competed or awarded sole-source.

How does the duration of this contract (2270 days) impact the assessment of its value and risk?

The contract duration of 2270 days (approximately 6.2 years) is substantial and suggests a long-term commitment to the F119 component improvement program. From a value perspective, a longer duration can allow for more in-depth research, development, and testing, potentially leading to more significant technological advancements. However, it also increases the exposure to risks such as technological obsolescence, changes in military requirements, or unforeseen cost escalations over time. For a CPFF contract, a longer duration necessitates sustained and rigorous government oversight to manage costs and ensure the program remains aligned with evolving needs and technological possibilities throughout its lifecycle.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA862621S1119

Pricing Type: COST PLUS FIXED FEE (U)

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $112,023,087

Exercised Options: $72,811,791

Current Obligation: $67,040,543

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $228,675

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862621D0001

IDV Type: IDC

Timeline