DoD Awards $2.8B Contract for Aircraft Engine Parts to RTX Corporation, Raising Competition Concerns
Contract Overview
Contract Amount: $2,803,077,022 ($2.8B)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2023-09-28
End Date: 2028-12-31
Contract Duration: 1,921 days
Daily Burn Rate: $1.5M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: LOT 18 PNR/TOOLING
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108
Plain-Language Summary
Department of Defense obligated $2.80 billion to RTX CORPORATION for work described as: LOT 18 PNR/TOOLING Key points: 1. Significant award to a single large corporation, RTX Corporation, for critical aircraft engine parts. 2. The contract's 'NOT COMPETED' status raises questions about potential price inflation and lack of market testing. 3. Long contract duration (1921 days) suggests a substantial, ongoing need for these specialized parts. 4. The sector is Aircraft Engine and Engine Parts Manufacturing, a key area for defense readiness.
Value Assessment
Rating: questionable
The contract value of $2.8 billion is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market alternatives. Benchmarking against similar sole-source contracts for specialized aerospace components would be necessary.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method limits price discovery and may lead to higher costs for taxpayers as there is no direct competition to drive down prices.
Taxpayer Impact: The lack of competition on this large contract could result in taxpayers paying a premium for aircraft engine parts, potentially diverting funds from other critical defense needs.
Public Impact
Taxpayers may be overpaying for essential aircraft engine components due to the absence of competitive bidding. The long-term nature of the contract could lock the government into potentially suboptimal pricing for years. Dependence on a single supplier for critical parts can create supply chain vulnerabilities. The defense sector's reliance on specialized, high-cost components is highlighted by this award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Long contract duration
- Sole-source award
Positive Signals
- Essential defense procurement
- Award to established manufacturer
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the aerospace and defense industry. Spending in this area is often characterized by high R&D costs, specialized manufacturing, and significant government reliance, sometimes leading to less competitive environments.
Small Business Impact
The contract was awarded to RTX Corporation, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct small business participation in this specific award.
Oversight & Accountability
The 'NOT COMPETED' status warrants scrutiny from oversight bodies to ensure the price is fair and reasonable and that competition was appropriately waived. Regular reviews of sole-source contracts are crucial for accountability.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Long-term commitment without market validation
- Sole-source dependency
- Significant taxpayer expenditure
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 $2.80 billion to RTX CORPORATION. LOT 18 PNR/TOOLING
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 $2.80 billion.
What is the period of performance?
Start: 2023-09-28. End: 2028-12-31.
What is the justification for not competing this contract, and what steps were taken to ensure a fair and reasonable price?
The justification for not competing this contract is not provided in the data. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services. Agencies must conduct market research and document the rationale for sole-sourcing. To ensure a fair and reasonable price, the government usually relies on cost and price analysis techniques, including reviewing the contractor's cost data and comparing it to historical prices or independent cost estimates.
What are the potential risks associated with a sole-source award of this magnitude for critical defense components?
The primary risk is paying an inflated price due to the lack of competitive pressure. There's also a risk of reduced innovation and complacency from the sole supplier. Furthermore, dependence on a single source can create supply chain vulnerabilities, especially if the supplier faces production issues or geopolitical challenges. This could impact defense readiness and operational capabilities.
How does this contract's structure (Cost Plus Incentive Fee) impact overall value and contractor performance?
A Cost Plus Incentive Fee (CPIF) contract aims to incentivize the contractor to control costs by sharing in savings or cost overruns based on performance targets. This structure can provide better value than a simple cost-plus contract by encouraging efficiency. However, the effectiveness depends heavily on the realism of the target costs and the clarity of the incentive metrics. It still carries inherent risks of cost growth if targets are not met or are poorly defined.
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: N0001923R0652
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $3,467,339,126
Exercised Options: $3,467,339,126
Current Obligation: $2,803,077,022
Subaward Activity
Number of Subawards: 23
Total Subaward Amount: $21,107,288
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-09-28
Current End Date: 2028-12-31
Potential End Date: 2028-12-31 00:00:00
Last Modified: 2025-12-11
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