DoD Awards $87.6M F135 Engine Contract to RTX Corp, Lacking Competition
Contract Overview
Contract Amount: $87,593,741 ($87.6M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2006-04-21
End Date: 2010-02-28
Contract Duration: 1,409 days
Daily Burn Rate: $62.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: F135 LRIP 1 LONG LEAD ADVANCED ACQUISITION CONTRACT (AAC)
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $87.6 million to RTX CORPORATION for work described as: F135 LRIP 1 LONG LEAD ADVANCED ACQUISITION CONTRACT (AAC) Key points: 1. Contract awarded to RTX Corporation for F135 engine long lead advanced acquisition. 2. Significant taxpayer investment in a critical defense component. 3. Lack of competition raises concerns about price discovery and potential cost overruns. 4. The sector is dominated by a few large players, limiting competitive options.
Value Assessment
Rating: questionable
The contract type is Cost Plus Award Fee (CPAF), which can incentivize contractors to exceed cost targets. Without competitive benchmarking, assessing the value for money is difficult.
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 the government compared to a competitive process.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for this critical defense component, as there was no market pressure to drive down costs.
Public Impact
Ensures continued production of the F135 engine, vital for U.S. air superiority. Supports jobs within RTX Corporation and its supply chain. Potential for increased costs impacts the overall defense budget and other programs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Award Fee contract type
- Long lead time acquisition
Positive Signals
- Critical defense system
- Established contractor
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a high-tech industry with significant barriers to entry. Spending in this sector is often characterized by long development cycles and high R&D costs.
Small Business Impact
This contract was awarded to a large corporation, RTX Corporation, and there is no indication of small business participation in this specific award. The nature of advanced aerospace manufacturing often involves large prime contractors.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the lack of competition limits the agency's ability to ensure the best possible price.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns due to CPAF structure
- High dollar value of contract
- Critical component with limited alternatives
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ct, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $87.6 million to RTX CORPORATION. F135 LRIP 1 LONG LEAD ADVANCED ACQUISITION CONTRACT (AAC)
Who is the contractor on this award?
The obligated recipient is RTX 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 $87.6 million.
What is the period of performance?
Start: 2006-04-21. End: 2010-02-28.
What is the projected total cost of the F135 program over its lifecycle, and how does this contract contribute to that figure?
The F135 program, powering the F-35 fighter jet, is one of the most expensive defense programs in history. While this specific contract is for advanced acquisition, the overall lifecycle cost is projected to be in the hundreds of billions of dollars. Understanding the cumulative impact of such contracts is crucial for long-term budget planning and ensuring fiscal responsibility.
What are the specific risks associated with a sole-source award for critical defense components like the F135 engine?
Sole-source awards for critical components like the F135 engine carry significant risks. The primary risk is inflated pricing due to the absence of competitive pressure. Other risks include potential complacency from the sole provider regarding innovation or quality improvements, and a lack of flexibility if the contractor faces production issues or decides to alter terms.
How does the Cost Plus Award Fee (CPAF) contract structure impact the government's ability to control costs for the F135 engine?
The CPAF structure allows the contractor to recover all allowable costs plus a fee that is adjusted based on performance against pre-defined objectives. While it aims to incentivize performance, it can also lead to cost overruns if the award criteria are not stringent or if the base cost estimates are inaccurate. The government's oversight is critical to ensure the fee structure truly drives value and cost efficiency.
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
Solicitation ID: N0001905R0086
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp (UEI: 001344142)
Address: 400 MAIN ST, EAST HARTFORD, CT, 06108
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $87,593,741
Exercised Options: $87,593,741
Current Obligation: $87,593,741
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2006-04-21
Current End Date: 2010-02-28
Potential End Date: 2010-02-28 00:00:00
Last Modified: 2016-03-03
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