DoD awards $804M contract for aircraft engines and spares to Rolls-Royce Corporation

Contract Overview

Contract Amount: $22,572,574 ($22.6M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2003-07-17

End Date: 2007-11-30

Contract Duration: 1,597 days

Daily Burn Rate: $14.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200312!000153!1700!AA412 !NAVAL AIR SYSTEMS COMMAND !N0001903C0355 !A!N! !N! !20030717!20040930!804754141!210908687!734340057!N!ROLLS-ROYCE CORPORATION !2001 SOUTH TIBBS AVENUE !INDIANAPOLIS !IN!46241!36000!097!18!INDIANAPOLIS !MARION !INDIANA !+000002672000!N!N!000000000000!2810!GAS RECIPROCATING ENG, AIRCRAFT & PRIME MOVE;COMPS!A1B!AIRCRAFT ENGINES AND SPARES !2AEB!E-2 HAWKEYE !336412!E! !1! ! ! ! ! !99990909!B!D!N!A! !D!U!U!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !B!B!A!A!000!A!A!Y! ! ! ! ! !N00019!0001! !

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225, UNITED STATES OF AMERICA

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to ROLLS-ROYCE CORPORATION for work described as: 200312!000153!1700!AA412 !NAVAL AIR SYSTEMS COMMAND !N0001903C0355 !A!N! !N! !20030717!20040930!804754141!210908687!734340057!N!ROLLS-ROYCE CORPORATION !2001 SOUTH TIBBS AVENUE !INDIANAPOLIS !IN!46241!36000!097!18!INDIANAPOLIS !MARION !INDIANA !+000002672000!N!N!000000000000!2810… Key points: 1. Contract awarded for aircraft engines and spares. 2. Rolls-Royce Corporation is the sole recipient. 3. Contract duration is over 4 years. 4. Spending is concentrated in the Defense sector.

Value Assessment

Rating: questionable

The contract value is $804,754,141. Without a competitive benchmark or detailed cost breakdown, assessing the value for money is difficult. The cost-plus-fixed-fee structure can incentivize cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to reduce prices.

Taxpayer Impact: The lack of competition for this significant contract may result in higher costs for taxpayers compared to a competitively awarded contract.

Public Impact

Ensures continued supply of critical aircraft engine components for military operations. Supports a major defense contractor and its supply chain. Potential for increased costs due to sole-source nature. Long-term commitment to a specific engine type and manufacturer.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost-plus-fixed-fee contract type can lead to cost overruns.
Long contract duration increases exposure to potential inefficiencies.

Positive Signals

Ensures availability of critical aircraft engine parts.
Supports a key defense industrial base supplier.

Sector Analysis

This contract falls within the Defense sector, specifically for aircraft engines and spares. Defense spending on specialized components like these is common, but the lack of competition raises concerns about efficiency.

Small Business Impact

The data does not indicate any specific provisions or benefits for small businesses in this contract. The award is to a large corporation, Rolls-Royce.

Oversight & Accountability

The contract was awarded by the Naval Air Systems Command. Oversight is crucial to ensure cost control and performance, especially given the sole-source and cost-plus-fixed-fee nature of the award.

Related Government Programs

Aircraft Engine and Engine Parts Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Cost-plus-fixed-fee contract type
Potential for cost overruns
Long contract duration
Limited transparency on justification for sole-source

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to ROLLS-ROYCE CORPORATION. 200312!000153!1700!AA412 !NAVAL AIR SYSTEMS COMMAND !N0001903C0355 !A!N! !N! !20030717!20040930!804754141!210908687!734340057!N!ROLLS-ROYCE CORPORATION !2001 SOUTH TIBBS AVENUE !INDIANAPOLIS !IN!46241!36000!097!18!INDIANAPOLIS !MARION !INDIANA !+000002672000!N!N!000000000000!2810!GAS RECIPROCATING ENG, AIRCRAFT & PRIME MOVE;COMPS!A1B!AIRCRAFT ENGINES AND SPARES !2AEB!E-2 HAWKEYE !336412!E! !1! ! ! ! ! !99990909!B!D!N!A! !D!U!U!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !B!B!A!A!000!A!A!Y! ! ! ! ! !N00019!0

Who is the contractor on this award?

The obligated recipient is ROLLS-ROYCE CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2003-07-17. End: 2007-11-30.

What is the justification for the sole-source award, and were alternative solutions considered?

The justification for a sole-source award is typically based on unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's unclear if alternatives were thoroughly explored or if this was a strategic decision to maintain a specific supply chain or technology.

How will the government ensure cost control and prevent overruns under this cost-plus-fixed-fee contract?

Effective cost control under a cost-plus-fixed-fee contract relies on robust government oversight, detailed auditing of contractor costs, and clear performance metrics. The government must actively monitor expenditures, validate incurred costs, and ensure the contractor operates efficiently to meet the fixed fee without excessive cost escalation.

What is the long-term strategy for aircraft engine procurement to ensure competitive pricing and technological advancement?

A long-term strategy should involve market research, fostering competition for future engine programs, and potentially investing in alternative technologies or domestic suppliers. Regularly reviewing the market and encouraging new entrants can drive innovation and ensure better value for taxpayer dollars over time.

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 FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rolls-Royce Holdings PLC (UEI: 217127290)

Address: 450 S MERIDIAN ST, INDIANAPOLIS, IN, 46225

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline