DoD's $4.87B Aircraft Engine Contract with RTX Corporation Faces Scrutiny for Lack of Competition
Contract Overview
Contract Amount: $4,865,962,076 ($4.9B)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2020-12-01
End Date: 2030-02-28
Contract Duration: 3,376 days
Daily Burn Rate: $1.4M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: FY21 PBL2
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118
Plain-Language Summary
Department of Defense obligated $4.87 billion to RTX CORPORATION for work described as: FY21 PBL2 Key points: 1. Significant contract value of $4.87 billion over 9 years. 2. Sole-source award to RTX Corporation raises competition concerns. 3. Potential for inflated costs due to limited price discovery. 4. Aircraft Engine and Parts Manufacturing sector is critical for defense readiness.
Value Assessment
Rating: questionable
The contract's large value and fixed-price incentive structure warrant close examination. Without competitive bidding, it's difficult to benchmark pricing against market alternatives, raising questions about overall value for taxpayer dollars.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and competitive pressure, potentially leading to higher costs than if the contract had been competed.
Taxpayer Impact: The lack of competition on this substantial contract could result in taxpayers paying a premium for aircraft engines and parts.
Public Impact
Taxpayers may be overpaying for critical aircraft engine components due to the absence of competitive bidding. The long duration of the contract (9 years) locks the DoD into a single supplier, limiting future flexibility. 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
- Long contract duration
- Lack of transparency in pricing
- Potential for cost overruns
Positive Signals
- Critical defense procurement
- Long-term supply assurance
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a vital component of the aerospace and defense industry. Spending in this area is crucial for maintaining military readiness, but competitive procurement is essential to ensure cost-effectiveness.
Small Business Impact
The contract data does not indicate any subcontracting goals or participation from small businesses. This sole-source award to a large corporation like RTX Corporation likely bypasses opportunities for small business involvement.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure fair pricing and performance. The Department of Defense must actively monitor contract execution and justification for the lack of competition.
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 and price discovery.
- Long contract duration (9 years) reduces flexibility.
- Potential for cost overruns without competitive pressure.
- Lack of small business participation.
- High contract value increases financial risk.
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 $4.87 billion to RTX CORPORATION. FY21 PBL2
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 $4.87 billion.
What is the period of performance?
Start: 2020-12-01. End: 2030-02-28.
What is the justification for awarding this multi-billion dollar contract on a sole-source basis, and what steps are being taken to ensure fair pricing without competition?
The justification for a sole-source award typically involves unique capabilities or urgent needs. Without competitive bidding, the Department of Defense must implement rigorous cost analysis and performance monitoring to mitigate the risk of overpayment and ensure the contractor delivers value. Regular audits and price reasonableness checks are crucial.
What are the long-term risks associated with relying on a single supplier for critical aircraft engine components, especially given the 9-year contract duration?
The primary risks include supply chain vulnerability, potential for price gouging over time, and stifled innovation. If RTX Corporation faces production issues or decides to increase prices significantly, the DoD has limited recourse. This dependence could also hinder the adoption of newer, potentially more efficient technologies from other manufacturers.
How does the fixed-price incentive (FPI) contract type balance cost control with performance incentives in this sole-source scenario?
An FPI contract aims to share cost savings or overruns between the government and contractor. However, in a sole-source context, the baseline for these incentives is set without competitive input, potentially inflating the target cost. While it incentivizes performance, the lack of competition weakens its cost-control effectiveness.
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: N0001919R0046
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $4,893,738,869
Exercised Options: $4,893,738,869
Current Obligation: $4,865,962,076
Subaward Activity
Number of Subawards: 74
Total Subaward Amount: $7,204,316
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2020-12-01
Current End Date: 2030-02-28
Potential End Date: 2030-02-28 00:00:00
Last Modified: 2025-12-17
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