DoD awards $71.5M for F135 Component Improvement Program to RTX Corporation, impacting aircraft engine parts manufacturing
Contract Overview
Contract Amount: $71,474,959 ($71.5M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2020-01-01
End Date: 2024-12-31
Contract Duration: 1,826 days
Daily Burn Rate: $39.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: F135 CY2020 COMPONENT IMPROVEMENT PROGRAM (CIP) REQUIREMENTS
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118
Plain-Language Summary
Department of Defense obligated $71.5 million to RTX CORPORATION for work described as: F135 CY2020 COMPONENT IMPROVEMENT PROGRAM (CIP) REQUIREMENTS Key points: 1. Significant investment in a critical defense program. 2. Sole-source award to RTX Corporation, raising competition concerns. 3. Long-term contract duration (5 years) suggests ongoing need. 4. Focus on component improvement for advanced aircraft engines.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar sole-source contracts for advanced engine components is difficult due to limited public data.
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 increases costs for taxpayers.
Taxpayer Impact: The lack of competition may result in higher prices than if the contract were competed, impacting overall taxpayer value.
Public Impact
Ensures continued operational readiness of the F135 fighter jet fleet. Supports advanced manufacturing and technological development in the aerospace sector. Potential for cost increases due to sole-source nature impacts defense budget allocation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost Plus Fixed Fee contract type carries inherent cost escalation risks.
- Long contract duration may not reflect current market efficiencies.
Positive Signals
- Addresses critical component improvement for a key defense asset.
- Maintains a vital supply chain for advanced military aircraft.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a high-value, technologically intensive industry. Spending benchmarks for sole-source, cost-plus contracts in this specialized area are often elevated due to R&D and proprietary technology.
Small Business Impact
The awardee, RTX Corporation, is a large prime contractor. There is no indication of subcontracting opportunities for small businesses within this specific contract data, though prime contractors often have small business utilization plans.
Oversight & Accountability
Oversight is crucial for Cost Plus Fixed Fee contracts to ensure costs are reasonable and allocable. The Department of the Navy is responsible for managing this contract and ensuring performance and financial accountability.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost Plus Fixed Fee structure increases government's exposure to cost overruns.
- Long contract duration might not capture potential cost savings from future market dynamics.
- Limited transparency on specific component improvement goals and their necessity.
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 $71.5 million to RTX CORPORATION. F135 CY2020 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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $71.5 million.
What is the period of performance?
Start: 2020-01-01. End: 2024-12-31.
What is the justification for the sole-source award, and what steps are taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one contractor can meet. The Department of the Navy would have specific procedures for validating these justifications and negotiating pricing, potentially involving independent cost estimates and audits to ensure the price is fair and reasonable, despite the lack of direct competition.
How are cost overruns managed under this Cost Plus Fixed Fee contract structure?
Cost Plus Fixed Fee contracts establish a base cost plus a fixed fee for the contractor's profit. Cost overruns are managed through rigorous oversight, detailed cost tracking, and audits by the procuring agency. The fixed fee incentivizes the contractor to control costs, but the government bears the risk of actual cost increases above the estimated base cost.
What is the long-term strategy for ensuring competitive sourcing for F135 component improvements?
The long-term strategy likely involves periodic reviews of the market and technology landscape. While current improvements may be sole-sourced due to specific needs, the DoD may plan for future competitions as technologies mature or alternative solutions emerge. This could involve breaking down future requirements into smaller, more competitive packages or fostering new entrants into the supply chain.
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: 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: $71,474,959
Exercised Options: $71,474,959
Current Obligation: $71,474,959
Actual Outlays: $11,181,042
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: 2020-01-01
Current End Date: 2024-12-31
Potential End Date: 2024-12-31 00:00:00
Last Modified: 2024-12-31
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