DoD awards $293.9M F135 EE TPDR contract to RTX CORPORATION, a sole-source delivery order

Contract Overview

Contract Amount: $293,939,613 ($293.9M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2022-12-01

End Date: 2024-09-30

Contract Duration: 669 days

Daily Burn Rate: $439.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F135 EE TPDR

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $293.9 million to RTX CORPORATION for work described as: F135 EE TPDR Key points: 1. Contract value represents a significant investment in advanced aircraft engine sustainment. 2. Sole-source award indicates limited market alternatives or specific contractor capabilities. 3. Cost-plus-fixed-fee structure may lead to cost overruns if not closely managed. 4. Contract duration of 669 days suggests a long-term sustainment requirement. 5. The contract falls under the Aircraft Manufacturing sector, highlighting its specialized nature. 6. Performance is overseen by the Defense Contract Management Agency, suggesting robust oversight.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The cost-plus-fixed-fee (CPFF) pricing structure necessitates careful monitoring to ensure costs remain reasonable and do not escalate beyond initial projections. While the total award amount is substantial, its value for money depends heavily on the efficiency of RTX CORPORATION's sustainment operations and the actual costs incurred.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically employed when a single contractor possesses unique capabilities, proprietary technology, or when urgency and specific requirements preclude a competitive process. The lack of competition limits price discovery and may result in higher costs compared to a fully competed scenario.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government relies on negotiation and oversight to ensure fair pricing in sole-source situations.

Public Impact

The primary beneficiaries are the U.S. Air Force, Navy, and Marine Corps, who rely on the F135 engine for their operational readiness. Services delivered include sustainment and support for the F135 engine, crucial for maintaining aircraft availability. The geographic impact is national, supporting military bases across the United States and potentially allied nations operating the F-35. Workforce implications include the retention of highly skilled engineers, technicians, and support staff at RTX CORPORATION and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts.
Lack of competition may limit innovation and drive up long-term sustainment costs.
Dependence on a single supplier for critical engine sustainment poses supply chain risks.

Positive Signals

Award to a known incumbent contractor with established expertise in F135 engine sustainment.
Contract duration suggests a commitment to ensuring long-term operational readiness.
Oversight by the Defense Contract Management Agency provides a layer of accountability.

Sector Analysis

The F135 engine is a critical component of the F-35 Lightning II Joint Strike Fighter program, one of the largest defense programs globally. The aerospace engine manufacturing market is highly concentrated, with a few major players dominating. This contract represents a significant portion of the sustainment spending for this advanced engine, reflecting the substantial investment in the F-35 platform and its ongoing operational needs.

Small Business Impact

There is no indication of a small business set-aside for this contract. Given the specialized nature of F135 engine sustainment and the sole-source award to RTX CORPORATION, direct subcontracting opportunities for small businesses may be limited to specific components or services within RTX's supply chain. The overall impact on the small business ecosystem is likely indirect, dependent on RTX's procurement practices.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA). DCMA is responsible for ensuring contractor compliance with contract terms, monitoring performance, and verifying costs. The CPFF structure requires diligent oversight to manage expenditures and prevent cost creep. Transparency is facilitated through contract reporting requirements, though specific details of cost breakdowns may be proprietary.

Related Government Programs

F-35 Lightning II Program
Aircraft Engine Manufacturing
Defense Logistics and Sustainment
Aerospace Component Support

Risk Flags

Sole-source award limits price competition.
Cost-plus-fixed-fee structure requires robust cost oversight.
Dependence on a single supplier for critical sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $293.9 million to RTX CORPORATION. F135 EE TPDR

Who is the contractor on this award?

The obligated recipient is RTX CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $293.9 million.

What is the period of performance?

Start: 2022-12-01. End: 2024-09-30.

What is the historical spending trend for F135 engine sustainment contracts awarded to RTX CORPORATION?

Analyzing historical spending for F135 engine sustainment requires accessing detailed contract databases. However, it is generally understood that sustainment costs for complex, high-performance military aircraft engines represent a significant portion of the total lifecycle cost. Over the past decade, spending on the F-35 program, including engine sustainment, has been substantial and is projected to continue growing as the fleet expands and ages. RTX CORPORATION, as the primary engine provider, has consistently been the recipient of major sustainment contracts. Trends likely show increasing total dollar values year-over-year, influenced by fleet size, operational tempo, and evolving sustainment strategies, including performance-based logistics initiatives.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar defense sustainment services?

Cost Plus Fixed Fee (CPFF) contracts are common in defense sustainment, particularly for complex systems where the scope of work or final costs are difficult to predict precisely at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This differs from Firm-Fixed-Price (FFP) contracts, where the price is set regardless of actual costs, offering greater cost certainty to the government but potentially higher risk for the contractor. Cost-Reimbursement contracts with incentive fees (CPIF) can also be used, aligning contractor and government incentives for cost control and performance. While CPFF provides flexibility, it places a greater burden on government oversight to manage costs effectively compared to FFP.

What are the key performance indicators (KPIs) typically associated with F135 engine sustainment contracts?

Key performance indicators for F135 engine sustainment contracts often revolve around ensuring high levels of aircraft availability and operational readiness. Common KPIs include engine mission capable rates (ensuring engines are available when needed), turnaround time for engine repairs and overhauls, spare parts availability, and adherence to scheduled maintenance. Performance-based metrics may also be included, linking contractor payment or fee to the achievement of specific availability or reliability targets. The effectiveness of sustainment is ultimately measured by its contribution to the warfighter's ability to execute missions, making metrics related to operational readiness paramount.

What is the potential impact of this sole-source award on future competition for F135 engine sustainment?

A sole-source award for F135 engine sustainment, especially for a critical component like the engine, can have a significant impact on future competition. It reinforces the incumbent contractor's (RTX CORPORATION) position due to their established infrastructure, proprietary knowledge, and existing relationship with the program. This can create barriers to entry for potential competitors, making it difficult for new firms to gain a foothold. While the F-35 program is extensive, the sustainment phase for such a technologically advanced and integrated system often favors deep specialization. Future competition might be limited to specific sub-components or services, or arise only if the government actively seeks to foster a more competitive environment through contract restructuring or technology development.

Are there any known risks associated with RTX CORPORATION's performance on previous F135 sustainment contracts?

Assessing specific risks associated with RTX CORPORATION's performance on previous F135 sustainment contracts requires access to detailed performance reports, contract close-outs, and any associated corrective action requests or disputes. Generally, large, complex defense programs can encounter challenges related to supply chain disruptions, technical issues, cost overruns, and schedule delays. RTX, as a major defense contractor, operates within a dynamic environment where such risks are inherent. However, the continued awarding of significant contracts suggests that overall performance has met the government's requirements, albeit potentially with areas for improvement that are managed through ongoing oversight and contract negotiations.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft 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: $347,939,613

Exercised Options: $347,939,613

Current Obligation: $293,939,613

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001921G0005

IDV Type: BOA

Timeline