DoD Awards $147M for Aircraft Engine Maintenance to Rolls-Royce Corporation
Contract Overview
Contract Amount: $147,027,390 ($147.0M)
Contractor: Rolls-Royce Corporation
Awarding Agency: Department of Defense
Start Date: 2021-10-01
End Date: 2022-07-31
Contract Duration: 303 days
Daily Burn Rate: $485.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MAINTENANCE AND RELATED SERVICES AT NASM
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $147.0 million to ROLLS-ROYCE CORPORATION for work described as: MAINTENANCE AND RELATED SERVICES AT NASM Key points: 1. Significant contract value for specialized aircraft engine maintenance services. 2. Sole-source award to Rolls-Royce Corporation, a key player in this sector. 3. Potential risk associated with limited competition for critical defense components. 4. Spending falls within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: fair
The contract value of $147M for maintenance services is substantial. Benchmarking against similar contracts for specialized engine parts manufacturing is difficult without more detailed service breakdowns. The firm fixed-price structure provides cost certainty but may not reflect the most competitive pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for taxpayers compared to a competed procurement.
Taxpayer Impact: The sole-source nature of this award raises concerns about potential overspending and the efficient use of taxpayer funds.
Public Impact
Ensures continued operational readiness of naval aircraft through essential engine maintenance. Supports a critical defense industrial base supplier, Rolls-Royce Corporation. Potential for higher costs due to lack of competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- High contract value.
- Lack of detailed cost breakdown.
Positive Signals
- Ensures critical maintenance for defense assets.
- Supports established supplier relationship.
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, a specialized area within defense procurement. Spending benchmarks for sole-source maintenance contracts of this magnitude are difficult to establish without comparative data.
Small Business Impact
This contract was not awarded to small businesses. The specialized nature of aircraft engine maintenance often favors large, established manufacturers with specific expertise and facilities.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of the Navy is responsible for managing this contract and ensuring its execution aligns with defense needs and budgetary constraints.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- High contract value
- Lack of competition
- Potential for price escalation
- Limited transparency on pricing justification
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 $147.0 million to ROLLS-ROYCE CORPORATION. MAINTENANCE AND RELATED SERVICES AT NASM
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 $147.0 million.
What is the period of performance?
Start: 2021-10-01. End: 2022-07-31.
What is the justification for the sole-source award, and how was the price determined to be fair and reasonable?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of other responsible sources. The price is usually determined fair and reasonable through mechanisms like cost analysis, price analysis based on historical data, or comparison to similar, albeit limited, procurements. Detailed documentation supporting these determinations is essential for accountability.
What are the long-term risks associated with relying on a sole-source provider for critical aircraft engine maintenance?
Long-term reliance on a sole-source provider can lead to price escalation without competitive pressure, reduced innovation, and potential supply chain vulnerabilities if the sole provider faces operational issues. It also limits the government's ability to leverage market competition to secure better terms or explore alternative solutions, potentially impacting readiness and budget flexibility.
How does this contract contribute to the overall readiness and operational effectiveness of the naval fleet?
This contract is vital for maintaining the operational readiness of naval aircraft by ensuring their engines are properly serviced and repaired. Reliable engine performance is critical for mission success, training, and deployment capabilities. By securing maintenance services from a key manufacturer, the Navy aims to minimize downtime and ensure aircraft are available when needed.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6134018R0005
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rolls-Royce Holdings PLC
Address: 450 S MERIDIAN ST, INDIANAPOLIS, IN, 46225
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $147,027,390
Exercised Options: $147,027,390
Current Obligation: $147,027,390
Subaward Activity
Number of Subawards: 17
Total Subaward Amount: $10,004,493
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6134019D0004
IDV Type: IDC
Timeline
Start Date: 2021-10-01
Current End Date: 2022-07-31
Potential End Date: 2022-07-31 00:00:00
Last Modified: 2023-04-20
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