DoD awards $66.6M for aircraft engine maintenance to Rolls-Royce Corporation

Contract Overview

Contract Amount: $66,612,960 ($66.6M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2017-03-29

End Date: 2018-03-31

Contract Duration: 367 days

Daily Burn Rate: $181.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MAINTENANCE AND RELATED SERVICES AT IGF::OT::IGF

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $66.6 million to ROLLS-ROYCE CORPORATION for work described as: MAINTENANCE AND RELATED SERVICES AT IGF::OT::IGF Key points: 1. Significant contract value for specialized aircraft engine maintenance. 2. Sole-source award to Rolls-Royce Corporation, a key player in the aerospace industry. 3. Potential risk associated with single-source procurement for critical defense assets. 4. Spending falls within the Defense sector, specifically Aircraft Engine Manufacturing.

Value Assessment

Rating: fair

The contract value of $66.6M for a 367-day period appears substantial. Benchmarking against similar sole-source maintenance contracts for complex aerospace components is difficult without more data, but the price seems high for a single year of service.

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 potentially leads to higher costs for the government compared to a competitive process.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these essential maintenance services.

Public Impact

Ensures operational readiness of critical military aircraft engines. Supports a major defense contractor and its supply chain. Highlights reliance on specialized, high-cost maintenance for advanced defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
High contract value for a single year
Potential for cost overruns without competitive pressure

Positive Signals

Ensures critical maintenance for defense assets
Supports established contractor with specialized expertise

Sector Analysis

This contract falls under the Defense sector, specifically related to aircraft engine and engine parts manufacturing. Spending benchmarks for sole-source maintenance of such specialized equipment are hard to establish but are typically high due to complexity and proprietary knowledge.

Small Business Impact

This contract does not appear to involve small businesses as prime contractors. Further analysis would be needed to determine if small businesses are included in the supply chain.

Oversight & Accountability

The contract was awarded as a delivery order under a larger agreement. Oversight would focus on ensuring the services rendered meet the specifications and that pricing remains justified throughout the contract duration.

Related Government Programs

Aircraft Engine and Engine Parts Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award
Lack of transparency in pricing
Potential for cost escalation
Dependence on a single supplier
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.6 million to ROLLS-ROYCE CORPORATION. MAINTENANCE AND RELATED SERVICES AT IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is ROLLS-ROYCE 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 $66.6 million.

What is the period of performance?

Start: 2017-03-29. End: 2018-03-31.

What is the justification for the sole-source award, and was a market research conducted to confirm the necessity?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. A thorough market research process should have been conducted to validate that no other responsible sources could meet the government's needs, ensuring the sole-source decision was indeed necessary and in the government's best interest.

How does the per-unit cost of this maintenance compare to historical data or industry benchmarks for similar aircraft engine components?

Without specific unit cost breakdowns and access to proprietary maintenance data, a direct comparison is challenging. However, the overall contract value of $66.6M for 367 days suggests a significant investment. Benchmarking would require detailed analysis of the specific maintenance tasks performed, the complexity of the engines, and prevailing market rates for specialized aerospace MRO services.

What are the long-term implications of relying on a single provider for critical aircraft engine maintenance for national security?

Long-term reliance on a single provider for critical defense components can create strategic vulnerabilities. It may limit technological advancement through competition, increase susceptibility to supply chain disruptions, and potentially lead to escalating costs over time. Diversifying maintenance providers or fostering domestic alternatives could mitigate these risks and enhance long-term readiness.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001913R2005

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $66,612,960

Exercised Options: $66,612,960

Current Obligation: $66,612,960

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001914D0016

IDV Type: IDC

Timeline