DoD Awards $135M for Rolls-Royce Engine Support, Lacking Competition
Contract Overview
Contract Amount: $135,269,204 ($135.3M)
Contractor: Rolls-Royce Corporation
Awarding Agency: Department of Defense
Start Date: 2018-11-29
End Date: 2020-02-29
Contract Duration: 457 days
Daily Burn Rate: $296.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MISSIONCARE HOURLY AE1107C ENGINE SUPPORT, PROGRAM MANAGEMENT, SITE SUPPORT, AND REPAIR OF LOW POWER/DISCRETIONARY ENGINE REMOVALS
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $135.3 million to ROLLS-ROYCE CORPORATION for work described as: MISSIONCARE HOURLY AE1107C ENGINE SUPPORT, PROGRAM MANAGEMENT, SITE SUPPORT, AND REPAIR OF LOW POWER/DISCRETIONARY ENGINE REMOVALS Key points: 1. Significant contract value of $135M for engine support and repair. 2. Sole-source award to Rolls-Royce Corporation raises competition concerns. 3. Risk of inflated costs due to lack of competitive bidding. 4. Spending concentrated in Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $135M for engine support and repair is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar services from other providers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This significantly limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition likely results in taxpayers paying a premium for these engine support services.
Public Impact
Military readiness may be impacted if essential engine support is not cost-effectively procured. Taxpayers bear the cost of potentially non-competitive pricing for critical defense components. The sole-source nature of this award could set a precedent for future sole-source procurements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Specific engine support and repair services provided
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical area for defense operations. Benchmarks for similar sole-source engine support contracts are difficult to establish due to the nature of the award.
Small Business Impact
The data indicates no specific set-aside for small businesses, and the prime contractor is Rolls-Royce Corporation, a large entity. This contract does not appear to benefit small businesses directly.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government is receiving fair value and that competition was appropriately waived.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for overpayment due to lack of competitive bidding.
- High contract value increases financial risk.
- Limited transparency on justification for sole-source.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, in, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $135.3 million to ROLLS-ROYCE CORPORATION. MISSIONCARE HOURLY AE1107C ENGINE SUPPORT, PROGRAM MANAGEMENT, SITE SUPPORT, AND REPAIR OF LOW POWER/DISCRETIONARY ENGINE REMOVALS
Who is the contractor on this award?
The obligated recipient is ROLLS-ROYCE 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 $135.3 million.
What is the period of performance?
Start: 2018-11-29. End: 2020-02-29.
What is the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without further details, it's unclear if other providers could have met the requirements or if a competitive process was explored and deemed unfeasible. This lack of transparency hinders a full assessment of value.
What are the potential risks associated with a sole-source contract for critical engine support, particularly regarding cost and performance?
Sole-source contracts carry inherent risks of inflated pricing due to the absence of competitive pressure. For critical engine support, this could mean higher operational costs for the DoD. Performance risks might also increase if the sole provider faces challenges, as there are no immediate alternative sources for service.
How does the $135M contract value compare to industry benchmarks for similar engine support and repair services, considering it was not competed?
Direct comparison to industry benchmarks is challenging for sole-source awards. The $135M figure represents the government's commitment without the benefit of competitive price discovery. A thorough audit or post-award review would be necessary to determine if this price aligns with fair market value for the services rendered.
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: N0001914R0039
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rolls-Royce Holdings PLC (UEI: 217127290)
Address: 450 S MERIDIAN ST, INDIANAPOLIS, IN, 46225
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $135,269,204
Exercised Options: $135,269,204
Current Obligation: $135,269,204
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $4,661,929
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001915D0019
IDV Type: IDC
Timeline
Start Date: 2018-11-29
Current End Date: 2020-02-29
Potential End Date: 2020-02-29 00:00:00
Last Modified: 2020-07-06
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