DoD awards $20.4M for aircraft engines to Rolls-Royce, raising concerns over competition

Contract Overview

Contract Amount: $20,445,412 ($20.4M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2026-02-27

Contract Duration: 1,246 days

Daily Burn Rate: $16.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ENGINE,AIRCRAFT,TUR

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $20.4 million to ROLLS-ROYCE CORPORATION for work described as: ENGINE,AIRCRAFT,TUR Key points: 1. Significant contract value awarded to a single, established vendor. 2. Lack of competition may lead to suboptimal pricing. 3. Potential for increased costs due to sole-source nature. 4. Sector focus on aircraft parts manufacturing.

Value Assessment

Rating: questionable

The contract value of $20.4 million for aircraft engines is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar high-value aerospace components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and negotiation leverage, potentially resulting in higher costs for the government.

Taxpayer Impact: The lack of competition on this $20.4 million contract means taxpayers may be paying a premium for these aircraft engines.

Public Impact

Taxpayers may be overpaying for critical aircraft engine components. Dependence on a single supplier could impact future availability and pricing. The Department of Defense's procurement strategy warrants scrutiny for competitive opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for price inflation

Positive Signals

Established vendor with proven capabilities

Sector Analysis

This contract falls within the aerospace manufacturing sector, specifically for aircraft engine components. Spending in this area is critical for defense readiness but often involves high unit costs and specialized production.

Small Business Impact

The contract was awarded to Rolls-Royce Corporation, a large business. There is no indication that small businesses were involved in this specific procurement, missing an opportunity for their participation.

Oversight & Accountability

The sole-source nature of this award suggests a potential gap in oversight regarding competitive sourcing strategies. Further review is needed to ensure fair and reasonable pricing was achieved.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits price competition.
Potential for inflated pricing due to lack of alternatives.
No small business participation noted.
Long contract duration (through 2026) increases exposure to price changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.4 million to ROLLS-ROYCE CORPORATION. ENGINE,AIRCRAFT,TUR

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 $20.4 million.

What is the period of performance?

Start: 2022-09-30. End: 2026-02-27.

What is the justification for the sole-source award of this aircraft engine contract?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that cannot be met by other suppliers. Without specific documentation, it's presumed that Rolls-Royce possesses unique qualifications or that competition was deemed impractical or not in the government's best interest at the time of award.

What are the risks associated with awarding a $20.4 million contract without competition?

The primary risks include paying a non-competitive price, potentially higher than market value, and reduced incentive for the contractor to innovate or offer cost savings. It also limits future competition by potentially locking the government into a specific technology or supplier, impacting long-term strategic sourcing.

How can the Department of Defense ensure value for money on future sole-source contracts?

The DoD can ensure value by conducting thorough market research to identify potential competitors, negotiating aggressively based on cost analysis and historical data, and implementing robust oversight mechanisms. Utilizing independent cost estimators and seeking technical expertise can also help validate pricing and performance.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

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: $20,445,412

Exercised Options: $20,445,412

Current Obligation: $20,445,412

Subaward Activity

Number of Subawards: 58

Total Subaward Amount: $74,054,218

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038321GZ501

IDV Type: BOA

Timeline