DoD's $21.8M contract for aircraft engine parts awarded to RTX Corporation, with no competition

Contract Overview

Contract Amount: $21,822,864 ($21.8M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2025-01-31

End Date: 2027-12-31

Contract Duration: 1,064 days

Daily Burn Rate: $20.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RR DEPOT

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $21.8 million to RTX CORPORATION for work described as: RR DEPOT Key points: 1. The contract value represents a significant investment in maintaining critical aircraft engine components. 2. The sole-source award raises questions about potential overpayment and lack of market-driven pricing. 3. A lack of competition increases the risk of suboptimal performance and limited innovation. 4. The duration of the contract suggests a long-term need for these specific parts. 5. The award is concentrated within the Defense sector, specifically for aircraft engine manufacturing. 6. The absence of small business involvement is noted, with no set-aside provisions.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable pricing for specialized aircraft engine parts. Without competitive bids, it's difficult to ascertain if the $21.8 million represents a fair market price or if RTX Corporation's pricing is inflated. The fixed-price contract type offers some cost certainty, but the absence of competition limits the government's ability to negotiate more favorable terms or explore alternative, potentially more cost-effective solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, RTX Corporation, was considered. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. The lack of competition means the Department of the Navy did not benefit from the price discovery and innovation that usually arises from a competitive environment. This can lead to higher costs for the government.

Taxpayer Impact: Taxpayers are likely paying a premium for these aircraft engine parts due to the absence of competitive pressure. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price, potentially leading to a less efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of Defense and its operational readiness, ensuring aircraft engines are maintained. The services delivered include the provision of essential aircraft engine and engine parts. The geographic impact is primarily within Connecticut, where RTX Corporation is based, and potentially at naval air stations where the parts will be utilized. The contract supports jobs within the aerospace manufacturing sector, specifically at RTX Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price negotiation and potential cost savings.
Lack of competition may stifle innovation and reduce the incentive for optimal performance.
Dependence on a single supplier for critical components poses a supply chain risk.
No small business set-aside indicates limited opportunities for smaller firms in this specific contract.

Positive Signals

Award to a known entity (RTX Corporation) suggests a level of established capability and reliability.
Fixed-price contract provides cost predictability for the government.
Contract duration suggests a stable, long-term supply of necessary parts.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine components. The market for such specialized parts is often dominated by a few large, established players like RTX Corporation due to high barriers to entry, including complex technology, stringent quality control, and significant R&D investment. Comparable spending benchmarks are difficult to establish publicly for sole-source awards of highly specialized military hardware.

Small Business Impact

This contract does not appear to include any small business set-aside provisions, nor is there an indication of subcontracting requirements for small businesses. The award to a large corporation like RTX suggests that the primary focus was on established capabilities rather than fostering small business participation. This could limit opportunities for smaller, innovative firms to enter the supply chain for critical defense components.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, which define deliverables and payment schedules. Transparency may be limited due to the sole-source nature of the award, with less public information available compared to competitively bid contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Engine Manufacturing
Defense Procurement
Aerospace Parts Supply
Naval Aviation Support

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited innovation incentive

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.8 million to RTX CORPORATION. RR DEPOT

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 $21.8 million.

What is the period of performance?

Start: 2025-01-31. End: 2027-12-31.

What is RTX Corporation's track record with the Department of Defense for similar aircraft engine parts contracts?

RTX Corporation, through its Pratt & Whitney division, is a major supplier of aircraft engines and engine parts to the Department of Defense. They have a long history of fulfilling contracts for various military aircraft platforms. While specific details on past performance for identical parts are not publicly detailed in this data, RTX is a well-established prime contractor with extensive experience in this domain. Their track record generally indicates a capacity to deliver complex aerospace components, though like any large contractor, they may have faced performance challenges on specific programs. The Department of the Navy would have internal data and past performance reviews informing this sole-source decision.

How does the $21.8 million contract value compare to market rates for similar aircraft engine parts?

Direct comparison to market rates for this specific contract is challenging because it was awarded on a sole-source basis to RTX Corporation. Competitive bidding typically drives prices down by allowing multiple suppliers to offer their best pricing. Without competitive bids, it's difficult to definitively state whether $21.8 million is aligned with market rates or represents a premium. The government relies on internal cost analysis, historical data, and negotiation to ensure fair pricing in sole-source situations, but the absence of external market validation through competition is a key limitation.

What are the primary risks associated with awarding this contract without competition?

The primary risks associated with this sole-source award include potential overpayment due to the lack of price competition, reduced incentive for the contractor to innovate or improve efficiency, and a potential lack of flexibility if requirements change. There's also a risk of supply chain disruption if RTX Corporation faces production issues, as there are no readily available alternative suppliers identified through a competitive process. Furthermore, the government may miss out on opportunities to leverage new technologies or more cost-effective solutions that might have emerged from a broader field of bidders.

How effective is the Department of the Navy in ensuring value for money on sole-source contracts like this one?

The Department of the Navy employs various mechanisms to ensure value for money on sole-source contracts, though these are inherently more challenging without competition. These include conducting robust cost and price analyses, reviewing historical pricing data, and negotiating terms with the sole provider. They also rely on technical expertise within the department to assess the necessity and specifications of the required parts. However, the effectiveness is ultimately constrained by the absence of competitive pressure, which is the most potent tool for driving down prices and fostering innovation. Oversight bodies and internal audit functions also play a role in scrutinizing these awards.

What are the historical spending patterns for aircraft engine parts by the Department of the Navy?

Historical spending patterns for aircraft engine parts by the Department of the Navy are substantial, reflecting the continuous need to maintain and upgrade complex aviation fleets. This spending is often characterized by a mix of competitive procurements for common parts and sole-source or limited competition awards for highly specialized, proprietary, or long-lead-time components. Major defense contractors like RTX Corporation are consistent recipients of such funding. Annual spending can fluctuate based on fleet readiness requirements, new aircraft introductions, and depot maintenance schedules. Detailed historical spending data would typically be available through government procurement databases like FPDS-NG or USAspending.gov, often categorized by specific aircraft types or engine models.

What is the significance of the contract duration (1064 days) in relation to the parts being procured?

The contract duration of 1064 days (approximately 2.9 years) suggests that the aircraft engine parts being procured are critical for ongoing operations and maintenance over an extended period. This duration is typical for sustainment contracts where a steady supply of components is needed to support a fleet of aircraft. It implies that these are not one-off purchases but rather part of a long-term strategy for maintaining the operational readiness of specific naval aircraft. The extended timeframe also allows the contractor, RTX Corporation, to plan production and resource allocation effectively, while providing the Navy with supply chain stability for these essential parts.

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: $21,822,864

Exercised Options: $21,822,864

Current Obligation: $21,822,864

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