DoD's $63.5M Component Improvement Program contract awarded to RTX Corporation for aircraft engine parts
Contract Overview
Contract Amount: $63,499,364 ($63.5M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2018-09-28
End Date: 2020-12-31
Contract Duration: 825 days
Daily Burn Rate: $77.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CY2018 COMPONENT IMPROVEMENT PROGRAM (CIP) REQUIREMENTS
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118
Plain-Language Summary
Department of Defense obligated $63.5 million to RTX CORPORATION for work described as: CY2018 COMPONENT IMPROVEMENT PROGRAM (CIP) REQUIREMENTS Key points: 1. Contract awarded to a single, large incumbent supplier. 2. Limited competition due to specialized nature of aircraft engine parts. 3. Potential risk of cost overruns with Cost Plus Fixed Fee contract type. 4. Spending falls within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: fair
The contract's value of $63.5M for a 2-year period appears reasonable for specialized aircraft engine components. However, without specific benchmarks for similar improvement programs, a precise value assessment 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 may result in taxpayers paying a premium for these critical aircraft engine components.
Public Impact
Ensures continued availability of critical aircraft engine components for military readiness. Supports a major defense contractor, RTX Corporation, and its supply chain. Potential for long-term reliance on a single supplier for future needs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost Plus Fixed Fee contract type can incentivize cost overruns.
- Long contract duration (over 2 years) increases exposure to market fluctuations.
Positive Signals
- Addresses a specific, identified need for component improvement.
- Awarded to a known entity with established capabilities in the sector.
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, a critical area for defense. Spending benchmarks for sole-source contracts in this niche are hard to establish but are typically higher than competed ones.
Small Business Impact
The contract was awarded to RTX Corporation, a large business. There is no indication of small business participation in this specific award, suggesting missed opportunities for small business engagement.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Oversight would focus on ensuring cost reasonableness and performance under the Cost Plus Fixed Fee structure.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of small business participation
- Potential for cost overruns
- Limited price transparency
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ct, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $63.5 million to RTX CORPORATION. CY2018 COMPONENT IMPROVEMENT PROGRAM (CIP) REQUIREMENTS
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 $63.5 million.
What is the period of performance?
Start: 2018-09-28. End: 2020-12-31.
What is the justification for the sole-source award, and were alternatives explored?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Exploring alternatives, even if ultimately unsuccessful, is crucial for demonstrating due diligence and ensuring the government obtains the best value. Without specific documentation, it's difficult to ascertain the thoroughness of this exploration.
How are cost overruns managed and mitigated under this Cost Plus Fixed Fee contract?
Cost Plus Fixed Fee contracts aim to control costs by setting a fixed fee for the contractor's profit, independent of the final cost. However, the government bears the risk of cost overruns. Mitigation strategies include robust government oversight, detailed cost tracking, negotiation of ceilings, and clear performance metrics to incentivize efficiency and prevent unnecessary spending.
What is the long-term strategy for ensuring competitive sourcing for future aircraft engine component needs?
The long-term strategy should involve market research to identify potential new sources, fostering competition through contract structuring, and potentially investing in R&D to reduce reliance on sole-source providers. Breaking down future requirements into smaller, more competitive packages could also encourage broader participation and better pricing.
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: RTX Corp
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: $63,499,364
Exercised Options: $63,499,364
Current Obligation: $63,499,364
Actual Outlays: $1,075,431
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001917G0005
IDV Type: BOA
Timeline
Start Date: 2018-09-28
Current End Date: 2020-12-31
Potential End Date: 2020-12-31 00:00:00
Last Modified: 2022-08-23
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