DoD Awards $76M for STOVL Spares to RTX Corp, Raising Concerns Over Competition
Contract Overview
Contract Amount: $76,016,240 ($76.0M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2023-06-16
End Date: 2027-02-28
Contract Duration: 1,353 days
Daily Burn Rate: $56.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DEPOT STOVL SPARES
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118
Plain-Language Summary
Department of Defense obligated $76.0 million to RTX CORPORATION for work described as: DEPOT STOVL SPARES Key points: 1. Significant award of $76M for specialized aircraft engine parts. 2. Sole awardee RTX Corporation highlights potential lack of competition. 3. Long contract duration (2027) may limit future price adjustments. 4. Focus on critical defense components underscores national security implications.
Value Assessment
Rating: questionable
The award of $76M for STOVL spares to RTX Corporation lacks a clear benchmark for comparison due to its sole-source nature. Without competitive bids, assessing the pricing's fairness against market alternatives is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to RTX Corporation. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition in this sole-source award may result in inflated prices, directly impacting taxpayer funds allocated for defense procurement.
Public Impact
Taxpayers may be overpaying for critical defense components due to the absence of competitive bidding. The long-term nature of the contract could lock the DoD into potentially suboptimal pricing for years. Dependence on a single supplier for specialized parts raises questions about supply chain resilience.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Essential defense procurement
- Firm fixed price contract
Sector Analysis
This award falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often characterized by high R&D costs and specialized manufacturing, which can sometimes lead to sole-source procurements.
Small Business Impact
The contract data indicates no specific set-aside for small businesses, and the prime contractor, RTX Corporation, is a large aerospace and defense company. This suggests limited direct opportunities for small businesses within this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and performance. The Department of the Navy should actively monitor contract execution and explore competitive strategies for future procurements.
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.
- Potential for overpricing due to lack of competitive bids.
- Long contract duration may not reflect market changes.
- Dependence on a single supplier for critical parts.
- Lack of small business participation noted.
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 $76.0 million to RTX CORPORATION. DEPOT STOVL SPARES
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 $76.0 million.
What is the period of performance?
Start: 2023-06-16. End: 2027-02-28.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by the contractor. The Department of Defense should conduct a thorough price analysis, potentially using historical data or independent cost estimates, to validate the reasonableness of the pricing. Regular performance reviews and audits are crucial to ensure value for taxpayer money.
What are the long-term risks associated with relying on a single supplier for these critical STOVL spares, particularly concerning supply chain disruptions or technological obsolescence?
Reliance on a single supplier for critical STOVL spares poses significant risks. Supply chain disruptions, whether due to geopolitical events, natural disasters, or the supplier's own operational issues, could severely impact readiness. Furthermore, technological advancements might render the current spares obsolete, requiring costly sole-source upgrades or replacements if no alternative suppliers are developed.
How will the Department of the Navy ensure that future requirements for STOVL spares are met through competitive means to foster innovation and cost savings?
The Department of the Navy can foster future competition by actively engaging with the market to identify potential alternative suppliers, investing in research and development for common components, and structuring future solicitations to encourage broader participation. Early market research and clear communication of requirements can incentivize new entrants and promote a more competitive landscape.
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
Pricing Type: FIRM FIXED PRICE (J)
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: $76,016,240
Exercised Options: $76,016,240
Current Obligation: $76,016,240
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001920D0013
IDV Type: IDC
Timeline
Start Date: 2023-06-16
Current End Date: 2027-02-28
Potential End Date: 2027-02-28 00:00:00
Last Modified: 2024-12-11
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