DoD Awards $1.54B to RTX Corp for F135 Propulsion Systems, Lacking Competition
Contract Overview
Contract Amount: $1,540,870,366 ($1.5B)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2014-05-02
End Date: 2021-06-30
Contract Duration: 2,616 days
Daily Burn Rate: $589.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: LRIP LOT IX F135 PROPULSION SYTEMS FOR LONG LEAD-TIME ITEMS
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118
Plain-Language Summary
Department of Defense obligated $1.54 billion to RTX CORPORATION for work described as: LRIP LOT IX F135 PROPULSION SYTEMS FOR LONG LEAD-TIME ITEMS Key points: 1. Significant award to a single large business, RTX Corporation. 2. Contract covers long lead-time items for F135 propulsion systems. 3. Lack of competition raises concerns about price discovery and value. 4. Spending is within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $1.54 billion is substantial. Without competitive bidding, it is difficult to assess if this price represents fair market value compared to similar propulsion system contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to RTX Corporation. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition may result in inflated costs, impacting taxpayer funds allocated to defense procurement.
Public Impact
Taxpayers may be overpaying for critical F135 propulsion system components due to the lack of competition. The long duration of the contract (2014-2021) suggests a sustained period without competitive pressure. Dependence on a single supplier for essential defense components poses a potential supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- No small business participation
Positive Signals
- Procurement of critical defense components
- Long-term contract provides stability for production
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the aerospace and defense industry. Spending in this sector is often characterized by high R&D costs and specialized manufacturing capabilities.
Small Business Impact
The data indicates no small business participation in this contract, which is common for large, complex defense procurements involving specialized manufacturing. This limits opportunities for smaller businesses in the supply chain.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential cost overruns. Accountability for the justification of non-competition is crucial.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- No small business participation
- Long contract duration without competition
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ct, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.54 billion to RTX CORPORATION. LRIP LOT IX F135 PROPULSION SYTEMS FOR LONG LEAD-TIME ITEMS
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 Navy).
What is the total obligated amount?
The obligated amount is $1.54 billion.
What is the period of performance?
Start: 2014-05-02. End: 2021-06-30.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent national security needs that only one contractor can meet. To ensure fair and reasonable pricing, the procuring agency would usually conduct a thorough price analysis, comparing proposed costs to historical data, other similar contracts, or independent cost estimates. However, without competition, the inherent pressure to offer the lowest price is absent.
What are the long-term risks associated with relying on a single supplier for critical F135 propulsion system components?
The primary long-term risks include potential supply chain disruptions if the sole supplier faces production issues, financial instability, or geopolitical challenges. Furthermore, the lack of competition can lead to sustained higher costs over the life of the system, as the government has limited leverage to negotiate better prices. This also stifles innovation from potential competitors.
How does the lack of competition in this contract impact the overall cost-effectiveness of the F135 program for the Department of Defense?
The lack of competition directly impacts cost-effectiveness by potentially increasing the per-unit cost of propulsion systems. Without competitive pressure, RTX Corporation may not be incentivized to minimize costs as aggressively as they would in a competed environment. This can lead to higher overall program expenditures, diverting funds that could be used for other defense priorities or acquisitions.
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: FIXED PRICE INCENTIVE (L)
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, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,559,473,589
Exercised Options: $1,559,364,729
Current Obligation: $1,540,870,366
Actual Outlays: $174,819
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $14,566,843
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-05-02
Current End Date: 2021-06-30
Potential End Date: 2021-06-30 00:00:00
Last Modified: 2024-09-27
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