DoD's $196M R&D contract with Rolls-Royce shows long-term investment in advanced technologies

Contract Overview

Contract Amount: $196,050,043 ($196.1M)

Contractor: Rolls-Royce North American Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2007-08-13

End Date: 2017-01-31

Contract Duration: 3,459 days

Daily Burn Rate: $56.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 14

Pricing Type: COST SHARING

Sector: R&D

Official Description: ADVENT

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46241

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $196.1 million to ROLLS-ROYCE NORTH AMERICAN TECHNOLOGIES INC for work described as: ADVENT Key points: 1. Contract awarded for extensive research and development, indicating a focus on innovation. 2. Long duration of 3459 days suggests a complex, multi-phase project. 3. Cost-sharing contract type implies shared financial risk and commitment between government and contractor. 4. High number of modifications (14) may indicate evolving project scope or unforeseen challenges. 5. Contractor's significant role in aerospace suggests strong technical capabilities for R&D. 6. Awarded by the Defense Contract Management Agency, highlighting a focus on defense-related research.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to its specialized nature and long duration. The cost-sharing model suggests an effort to manage government expenditure by distributing risk. However, without specific deliverables or performance metrics, assessing the overall value for money is difficult. The extensive modifications could indicate scope creep or a need for additional funding beyond initial projections, warranting closer scrutiny of cost efficiency over the contract's life.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a broad solicitation process. The presence of 14 modifications indicates that the contract's scope or terms may have evolved significantly since its initial award. While the initial competition was open, the number of modifications could imply that the original competitive pricing may not fully reflect the final cost or scope of work delivered.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers, as it aims to secure the best value through a wide range of potential bidders. However, the extensive modifications on this contract warrant attention to ensure that the evolving scope did not lead to inflated costs compared to what might have been achieved through re-competition or tighter initial scope definition.

Public Impact

Benefits the Department of Defense by advancing critical research and development capabilities. Supports innovation in physical, engineering, and life sciences relevant to national security. Potential for technological advancements that could enhance military readiness and operational effectiveness. Impacts the aerospace and defense technology sector through sustained investment in R&D.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The high number of contract modifications (14) could indicate potential scope creep or challenges in initial planning, leading to increased costs.
Assessing the true value for money is difficult without clear performance metrics and comparison to similar R&D efforts.
The long duration of the contract (over 9 years) makes it challenging to maintain cost control and relevance over time.

Positive Signals

Awarded through full and open competition, suggesting a robust initial selection process.
The cost-sharing arrangement indicates a shared commitment and risk between the government and the contractor.
Rolls-Royce's established reputation in aerospace technology suggests a high level of technical expertise and capability.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The aerospace and defense industry is a significant area for R&D investment, with companies like Rolls-Royce playing a crucial role in developing next-generation technologies. Comparable spending benchmarks in this specialized R&D area are difficult to establish due to the unique nature of each project, but the scale of this contract indicates a substantial commitment to technological advancement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Rolls-Royce, is a large aerospace company. There is no explicit information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, though large prime contractors often engage small businesses in their supply chains.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), which is responsible for overseeing contract performance and ensuring compliance. The cost-sharing nature of the contract implies a level of financial oversight. However, the provided data does not detail specific oversight mechanisms, accountability measures, or transparency assessments beyond the agency's general role. Inspector General jurisdiction would typically apply to investigations of fraud, waste, or abuse.

Related Government Programs

Advanced Technology Development
Aerospace Research
Defense Research and Development
Propulsion Systems Research
Materials Science Research

Risk Flags

Potential for scope creep due to numerous modifications.
Long contract duration may impact cost control and relevance.
Value for money assessment is difficult without specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $196.1 million to ROLLS-ROYCE NORTH AMERICAN TECHNOLOGIES INC. ADVENT

Who is the contractor on this award?

The obligated recipient is ROLLS-ROYCE NORTH AMERICAN TECHNOLOGIES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $196.1 million.

What is the period of performance?

Start: 2007-08-13. End: 2017-01-31.

What was the primary objective of this research and development contract?

The primary objective of this research and development contract, awarded to Rolls-Royce North American Technologies Inc. by the Department of Defense, was to advance capabilities within the physical, engineering, and life sciences. While the specific technical goals are not detailed in the provided data, such contracts typically aim to develop new technologies, improve existing systems, or explore innovative solutions for defense applications. Given the contractor's specialization, it likely involved advancements in areas such as aerospace propulsion, materials science, or related engineering fields critical to national security. The long duration and cost-sharing model suggest a significant, long-term investment in foundational or applied research with the potential for substantial future impact.

How does the cost-sharing arrangement impact the government's financial risk and potential return on investment?

The cost-sharing arrangement in this contract signifies that both the government and Rolls-Royce are contributing financially to the research and development effort. This model mitigates the government's financial risk by distributing the cost burden. For the contractor, it demonstrates a commitment to the project's success and a belief in its potential value. From a return on investment perspective, cost-sharing can incentivize efficiency and innovation from the contractor, as they have a direct stake in the outcome. However, it also means the government's ultimate expenditure could be higher than a fixed-price contract, depending on the actual costs incurred by the contractor. The success of the R&D and subsequent adoption of the developed technologies would determine the overall return.

What does the high number of contract modifications (14) suggest about the contract's execution and management?

The occurrence of 14 modifications to this contract suggests a dynamic and potentially evolving research and development process. Modifications can arise for various reasons, including changes in technical requirements, adjustments to project scope, unforeseen technical challenges, or shifts in program priorities. For a long-term R&D contract, some level of modification is often expected as understanding deepens and new possibilities emerge. However, a high number of modifications can also indicate potential issues with initial planning, scope definition, or contractor performance, potentially leading to cost overruns or schedule delays. It warrants a closer examination of the nature of these modifications to understand if they represent necessary adaptations or signs of less effective contract management.

What is Rolls-Royce's track record in performing large-scale research and development contracts for the federal government?

Rolls-Royce North American Technologies Inc., as a subsidiary of the global Rolls-Royce plc, has a well-established track record in advanced engineering and technology development, particularly within the aerospace and defense sectors. While specific details of their federal R&D contract history are not provided here, the company is a major supplier of engines and systems for military aircraft and other defense platforms. Their involvement in complex, long-term projects is common. The award of a $196 million R&D contract by the Department of Defense indicates a level of trust and confidence in their technical capabilities and past performance. Their extensive experience in highly regulated and technologically demanding industries suggests a strong capacity to manage and execute significant research initiatives.

How does this contract's spending compare to other federal investments in research and development within the aerospace sector?

Comparing this $196 million contract to other federal R&D investments in the aerospace sector requires broader data on government R&D spending. However, this figure represents a substantial investment, indicative of a significant project. Federal R&D spending in aerospace is typically driven by defense needs and space exploration initiatives, often involving large sums allocated to major contractors like Rolls-Royce, Boeing, Lockheed Martin, and others. The duration of this contract (over 9 years) also suggests a long-term strategic commitment. While specific benchmarks are elusive without more context on the R&D focus, this contract aligns with the pattern of significant, multi-year federal funding directed towards advancing aerospace technology for national security or strategic interests.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 14

Pricing Type: COST SHARING (T)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rolls-Royce Holdings PLC

Address: 2059 S TIBBS AVE, INDIANAPOLIS, IN, 46241

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $323,233,802

Exercised Options: $323,233,802

Current Obligation: $196,050,043

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline