DoD's $28.4M RTX Corporation Fleet Management Contract Awarded Sole Source

Contract Overview

Contract Amount: $28,382,358 ($28.4M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2008-12-01

End Date: 2014-02-28

Contract Duration: 1,915 days

Daily Burn Rate: $14.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FLEET MANAGEMENT PROGRAM (FMP)

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $28.4 million to RTX CORPORATION for work described as: FLEET MANAGEMENT PROGRAM (FMP) Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value for money. 2. The contract duration of 1915 days (over 5 years) suggests a significant, long-term commitment. 3. The firm-fixed-price structure aims to transfer risk to the contractor, but oversight is crucial for sole-source awards. 4. Lack of competition may limit opportunities for other capable vendors and potentially higher innovation. 5. The contract falls under Aircraft Manufacturing (NAICS 336411), indicating a specialized industrial sector. 6. The award was managed by the Defense Contract Management Agency, suggesting a focus on defense-related services.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without competitive bids. The firm-fixed-price nature suggests an attempt to control costs, but the absence of competition means there's no direct comparison to market rates. The total award value of approximately $28.4 million over its lifespan needs careful scrutiny to ensure it aligns with industry standards for similar fleet management services, especially given the lack of transparency inherent in sole-source procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. This approach is typically reserved for situations where only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of multiple bidders means there was no opportunity for price negotiation or comparison among different providers, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing offers, the government cannot be assured it received the best possible price or value.

Public Impact

The primary beneficiaries are likely the Department of Defense units relying on efficient fleet management for their aircraft. Services delivered under this contract would ensure the operational readiness and maintenance of critical defense assets. The geographic impact is likely concentrated within the operational areas of the specific DoD components utilizing the managed fleet. Workforce implications could include specialized technical roles for maintenance, logistics, and management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process makes it difficult to assess true value for money.
Long contract duration without competition could lead to vendor lock-in and reduced flexibility.
Specific performance metrics and quality assurance details are not readily available for this sole-source award.

Positive Signals

Firm-fixed-price contract structure shifts cost overrun risk to the contractor.
Awarded by the Defense Contract Management Agency, suggesting adherence to established defense procurement protocols.
The contract supports critical defense operations, ensuring fleet readiness.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government investment. Contracts like this, for fleet management, are crucial for maintaining the operational readiness of military assets. The market for such specialized services is often dominated by a few large, established players due to the high barriers to entry, including security clearances, specialized expertise, and existing relationships. This contract represents a portion of the broader defense spending allocated to sustainment and operational support for aviation assets.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, RTX Corporation, will likely handle the majority of the work internally, potentially limiting opportunities for small businesses to participate in this specific procurement. The absence of set-asides or subcontracting plans means the direct economic impact on the small business ecosystem for this contract is likely minimal.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions. As a sole-source award, transparency might be limited compared to competed contracts. Accountability measures would be defined within the contract's performance work statement and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency (DLA) Aviation Support
Naval Air Systems Command (NAVAIR) Maintenance Contracts
Air Force Materiel Command (AFMC) Sustainment Programs
General Services Administration (GSA) Fleet Management Services

Risk Flags

Sole-source award lacks competitive transparency.
Potential for inflated pricing due to lack of competition.
Limited public information on performance metrics and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.4 million to RTX CORPORATION. FLEET MANAGEMENT PROGRAM (FMP)

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 $28.4 million.

What is the period of performance?

Start: 2008-12-01. End: 2014-02-28.

What specific fleet management services are included under this contract?

The provided data does not detail the specific services covered under the FLEET MANAGEMENT PROGRAM (FMP) contract awarded to RTX CORPORATION. However, typical fleet management services for defense aviation assets can include scheduled and unscheduled maintenance, repair and overhaul (MRO), logistics support, supply chain management for parts, technical data management, configuration management, and potentially flight operations support. The firm-fixed-price nature suggests a defined scope of work for which RTX is responsible for delivering at an agreed-upon price. Further details would be found in the contract's Statement of Work (SOW) or Performance Work Statement (PWS).

Why was this contract awarded on a sole-source basis?

The data indicates the contract was awarded as 'NOT COMPETED' (CT), signifying a sole-source procurement. While the specific justification is not provided, sole-source awards are typically made when only one responsible source is available or capable of meeting the government's needs. This could be due to unique proprietary technology, specialized expertise held exclusively by RTX CORPORATION, a critical and urgent need that precludes a competitive process, or if the requirement evolved from a previous contract where the original contractor developed unique knowledge or capabilities. The Department of Defense would have documented the specific rationale for this sole-source determination.

How does the firm-fixed-price (FFP) structure mitigate risk in this sole-source contract?

A Firm-Fixed-Price (FFP) contract structure is designed to provide the government with price certainty and transfer cost overrun risk to the contractor. In this case, RTX CORPORATION is obligated to perform the specified fleet management services for the agreed-upon price, regardless of their actual costs. This incentivizes RTX to manage its resources efficiently and control expenses. However, for a sole-source award, the benefit of price certainty is somewhat diminished as there is no competitive benchmark. Effective oversight is still crucial to ensure RTX is meeting performance standards and not cutting corners to maintain profitability under the FFP.

What is the historical spending trend for this specific fleet management program?

The provided data represents a single award for the FLEET MANAGEMENT PROGRAM (FMP) with a total value of $28,382,357.61, spanning from December 1, 2008, to February 28, 2014. This data point does not provide a trend but rather a snapshot of spending for a specific contract period. To understand historical spending trends, one would need to examine all prior and subsequent contracts related to this FMP, including their values, durations, and whether they were competed or sole-sourced. Analyzing these patterns would reveal if spending has increased, decreased, or remained consistent over time for this program.

What is the significance of the PSC code (if available) and NAICS code 336411 in relation to this contract?

The provided data includes NAICS code 336411, which corresponds to 'Aircraft Manufacturing.' This indicates that the contract likely involves services or components directly related to the manufacturing, assembly, or sustainment of aircraft, aligning with the 'FLEET MANAGEMENT PROGRAM' context for the Department of Defense. While a PSC (Product or Service Code) is not explicitly listed in the provided snippet, it would further refine the nature of the goods or services procured. For example, a PSC related to aircraft maintenance or support equipment would complement the NAICS code, providing a more granular understanding of the contract's scope within the defense industrial base.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001908R0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 400 MAIN ST, EAST HARTFORD, CT, 06108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $30,320,853

Exercised Options: $30,320,853

Current Obligation: $28,382,358

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline