DoD's $677.9M F135 Engine Parts Contract Awarded to RTX Corporation Raises Cost Concerns
Contract Overview
Contract Amount: $67,793,190 ($67.8M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2023-01-03
End Date: 2026-12-31
Contract Duration: 1,458 days
Daily Burn Rate: $46.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: F135 CIP CY2022-25 EPDS
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118
Plain-Language Summary
Department of Defense obligated $67.8 million to RTX CORPORATION for work described as: F135 CIP CY2022-25 EPDS Key points: 1. The contract for F135 Engine Parts is a significant expenditure for the Department of Defense. 2. RTX Corporation is the sole provider, indicating a lack of competition. 3. The cost-plus-fixed-fee structure may lead to cost overruns. 4. The sector is Aircraft Engine and Engine Parts Manufacturing, critical for defense readiness.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with sole-source award, makes a direct pricing comparison difficult. However, the significant award amount suggests potential for high unit costs without competitive pressure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, awarded solely to RTX Corporation. The lack of competition limits price discovery and potentially inflates costs for taxpayers.
Taxpayer Impact: Taxpayers bear the full cost without the benefit of competitive bidding, increasing the risk of overpayment for these critical aircraft engine parts.
Public Impact
Impacts readiness of F-35 fighter jets, a cornerstone of US air power. Potential for increased defense spending without demonstrable value for money. Lack of competition could stifle innovation in engine parts manufacturing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Lack of transparency in pricing
Positive Signals
- Ensures supply of critical F-35 components
- Long-term contract provides stability for RTX
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a highly specialized and critical component of the defense industrial base. Spending benchmarks are difficult to establish due to the sole-source nature, but this represents a substantial investment.
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 impact.
Oversight & Accountability
The sole-source nature of this award warrants close oversight from the Department of Defense to ensure fair pricing and prevent potential cost escalations. Accountability for performance and cost control is crucial.
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.
- Cost-plus-fixed-fee structure can incentivize higher costs.
- Lack of transparency in pricing mechanisms.
- Potential for contractor lock-in.
- Dependence on a single supplier for critical components.
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 $67.8 million to RTX CORPORATION. F135 CIP CY2022-25 EPDS
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 $67.8 million.
What is the period of performance?
Start: 2023-01-03. End: 2026-12-31.
What is the projected total cost over the contract's lifespan, and how does it compare to historical spending on similar components?
The current award is for $677.9 million through December 2026. Without competitive benchmarks, it's challenging to assess if this represents fair value. Historical data on F135 engine part procurement, especially under sole-source conditions, would be needed for a meaningful comparison and to identify potential cost trends or inefficiencies.
What are the specific risks associated with a sole-source award for critical aircraft engine parts, particularly regarding price escalation and supply chain vulnerabilities?
A sole-source award to RTX Corporation for F135 engine parts carries risks of price escalation due to the absence of competitive pressure. It also concentrates supply chain risk with a single provider, potentially impacting availability and delivery schedules if RTX faces production issues or geopolitical disruptions.
How effectively is the Department of the Navy ensuring cost control and performance standards under this cost-plus-fixed-fee contract structure?
The effectiveness of cost control and performance standards under this CPFF contract hinges on robust government oversight. The Navy must diligently monitor RTX's expenditures, performance metrics, and adherence to the fixed fee. Regular audits and performance reviews are essential to mitigate risks inherent in this contract type.
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $72,531,982
Exercised Options: $72,531,982
Current Obligation: $67,793,190
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $361,771
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001922G0001
IDV Type: BOA
Timeline
Start Date: 2023-01-03
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 00:00:00
Last Modified: 2025-06-09
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