DoD Awards $357M F135 Sustainment Contract to RTX Corporation
Contract Overview
Contract Amount: $356,754,557 ($356.8M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2013-12-30
End Date: 2021-07-31
Contract Duration: 2,770 days
Daily Burn Rate: $128.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: F135 LRIP LOT 7 SUSTAINMENT CONTRACT
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118
Plain-Language Summary
Department of Defense obligated $356.8 million to RTX CORPORATION for work described as: F135 LRIP LOT 7 SUSTAINMENT CONTRACT Key points: 1. Significant contract value for sustainment of critical F135 aircraft engines. 2. Sole-source award to RTX Corporation, raising questions about price competition. 3. Long contract duration (2770 days) necessitates careful oversight. 4. The sector is Aircraft Engine and Engine Parts Manufacturing, a key defense industry.
Value Assessment
Rating: questionable
The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar sustainment contracts is difficult without more detailed cost breakdowns.
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.
Taxpayer Impact: The lack of competition for this large sustainment contract may result in higher costs for taxpayers than if it had been competitively bid.
Public Impact
Impacts readiness and operational capability of F135 fighter jets. Affects the defense industrial base and reliance on a single supplier. Potential for long-term cost implications for the F-35 program.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Essential sustainment for critical defense asset
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the defense industrial base. Spending benchmarks for sustainment contracts of this nature are highly variable and depend on specific system requirements and support levels.
Small Business Impact
The data provided does not indicate any specific provisions or impacts related to small business participation in this contract. Further analysis would be needed to determine if small businesses are involved as subcontractors or if opportunities were missed.
Oversight & Accountability
Given the sole-source nature and cost-plus contract type, robust oversight from the Department of the Navy is crucial to ensure cost control and performance. Auditing mechanisms and performance reviews are essential for accountability.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits price competition.
- Cost-plus contract type increases risk of cost overruns.
- Long contract duration (2770 days) extends exposure to risks.
- Potential for contractor to lack sufficient incentive for cost efficiency.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ct, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $356.8 million to RTX CORPORATION. F135 LRIP LOT 7 SUSTAINMENT CONTRACT
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 $356.8 million.
What is the period of performance?
Start: 2013-12-30. End: 2021-07-31.
What is the projected cost growth trajectory for this contract given its cost-plus incentive fee structure and long duration?
The cost-plus incentive fee structure, combined with a long duration of 2770 days, presents a significant risk for cost growth. Without detailed performance metrics and stringent oversight, the incentive fee could drive costs higher than initially anticipated. Regular audits and performance reviews are essential to monitor and control potential cost escalations throughout the contract's life cycle.
What steps are being taken to mitigate the risks associated with a sole-source award for F135 sustainment?
Mitigation strategies for sole-source awards typically involve rigorous negotiation of terms and pricing, establishing clear performance metrics, and implementing strong oversight. The Department of the Navy should be actively engaging in detailed cost analysis, benchmarking against available data, and potentially exploring future competition strategies for subsequent contract phases or related services to ensure fair pricing and value.
How does the sustainment cost per engine compare to industry benchmarks for similar advanced aircraft engine programs?
Direct comparison to industry benchmarks for similar advanced aircraft engine sustainment is challenging without specific cost breakdowns and performance data for this contract. However, given the complexity and advanced technology of the F135 engine, sustainment costs are expected to be substantial. The lack of competition raises concerns that these costs might exceed what could be achieved through a competitive bidding process.
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 INCENTIVE FEE (V)
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: $369,063,155
Exercised Options: $369,063,155
Current Obligation: $356,754,557
Actual Outlays: $5,236,170
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $27,477
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2013-12-30
Current End Date: 2021-07-31
Potential End Date: 2021-07-31 00:00:00
Last Modified: 2024-08-06
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