DoD's $23.7M Engine Repair Contract Awarded to Rolls-Royce Corporation for USMC Aircraft

Contract Overview

Contract Amount: $23,674,881 ($23.7M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2023-05-24

End Date: 2024-07-31

Contract Duration: 434 days

Daily Burn Rate: $54.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DEPOT LEVEL ENGINE REPAIR CY1 USMC ACTIVE FY23

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $23.7 million to ROLLS-ROYCE CORPORATION for work described as: DEPOT LEVEL ENGINE REPAIR CY1 USMC ACTIVE FY23 Key points: 1. The contract is for depot-level engine repair services for the USMC active fleet. 2. Rolls-Royce Corporation is the sole provider of these specific engine repairs, indicating a potential lack of competition. 3. The contract value is substantial at $23.7 million, requiring careful oversight. 4. The sector is Aircraft Engine and Engine Parts Manufacturing, a critical component of defense readiness.

Value Assessment

Rating: fair

The contract value of $23.7 million for depot-level engine repair appears reasonable given the specialized nature of aircraft engines. However, without specific benchmarks for this type of repair, a definitive assessment of value is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Although the contract is listed as full and open competition, the award to Rolls-Royce Corporation suggests they may be the only qualified source for this specific depot-level repair. This could limit price discovery and potentially lead to higher costs.

Taxpayer Impact: Taxpayer funds are being used for essential military aircraft maintenance. The effectiveness of the competition method will directly impact the overall cost efficiency for taxpayers.

Public Impact

Ensures readiness of USMC aircraft by maintaining critical engine components. Supports the operational capabilities of the United States Marine Corps. Potential for increased costs if competition is not robust despite being listed as full and open.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition despite 'full and open' designation.
High reliance on a single contractor for specialized repair services.

Positive Signals

Ensures critical maintenance for USMC aircraft.
Contract awarded to a known entity with expertise in aircraft engines.

Sector Analysis

This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, which is vital for national defense. Spending in this area is typically high due to the complexity and specialized nature of the products and services required.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. The nature of depot-level engine repair often requires specialized facilities and certifications typically held by larger, established manufacturers.

Oversight & Accountability

The Department of the Navy awarded this contract. Oversight will be crucial to ensure the quality of repairs, adherence to timelines, and cost-effectiveness, especially given the potential for limited competition.

Related Government Programs

Aircraft Engine and Engine Parts Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for limited effective competition.
High reliance on a single contractor.
Specialized nature of repair may limit future competition.
Lack of readily available cost benchmarks for comparison.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to ROLLS-ROYCE CORPORATION. DEPOT LEVEL ENGINE REPAIR CY1 USMC ACTIVE FY23

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 $23.7 million.

What is the period of performance?

Start: 2023-05-24. End: 2024-07-31.

What specific factors contributed to Rolls-Royce Corporation being the apparent sole qualified bidder for this depot-level engine repair, despite the 'full and open' competition designation?

The 'full and open' designation indicates the solicitation was broadly advertised. However, the specialized nature of depot-level engine repair, requiring unique technical expertise, proprietary tooling, and specific certifications, may have limited the number of capable bidders to only Rolls-Royce Corporation. This is common for highly technical defense maintenance contracts where original equipment manufacturers possess exclusive knowledge and resources.

How does the $23.7 million contract value compare to historical spending on similar depot-level engine repairs for the USMC fleet?

Benchmarking this $23.7 million contract requires access to historical data on similar depot-level engine repairs for the specific aircraft engines used by the USMC. Without this comparative data, it is difficult to definitively assess if the price is competitive or represents a fair value. Factors like the number of engines repaired, the scope of work, and inflation rates would need to be considered.

What are the primary risks associated with awarding a significant maintenance contract to a single provider, even if competition was sought?

The primary risks include potential price escalation over time due to a lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and vulnerability in the supply chain if the sole provider faces operational disruptions. This can lead to increased long-term costs for the government and potential delays in critical maintenance.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001921R0014

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: $23,674,881

Exercised Options: $23,674,881

Current Obligation: $23,674,881

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $20,390,266

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001922D0011

IDV Type: IDC

Timeline