DoD awards $15.6M for F-100 aircraft engines, raising concerns about competition and value
Contract Overview
Contract Amount: $15,603,869 ($15.6M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2003-03-31
End Date: 2004-11-30
Contract Duration: 610 days
Daily Burn Rate: $25.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE AWARD FEE
Sector: Defense
Official Description: 200306!000776!5700!GD60 !OKLAHOMA CITY ALC/LPD !SP040001D9405 !A!N! !N!SD20 !20030331!20041130!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTFORD !CONN !+000015614017!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !3BSR!F-100 !336412!E! !5!A!S! ! !A!20110216!B! ! !A! !D!U!M!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! !FA8104!0001! !
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108
Plain-Language Summary
Department of Defense obligated $15.6 million to RTX CORPORATION for work described as: 200306!000776!5700!GD60 !OKLAHOMA CITY ALC/LPD !SP040001D9405 !A!N! !N!SD20 !20030331!20041130!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTF… Key points: 1. The contract for F-100 aircraft engines was awarded without competition, potentially leading to higher costs. 2. The total value of $15.6 million for a 610-day duration suggests a significant per-unit cost. 3. The lack of competition raises questions about price discovery and whether the government received the best value. 4. The sector is critical for defense readiness, but the procurement method warrants scrutiny.
Value Assessment
Rating: questionable
The contract value of $15.6 million for 610 days, with a reported base price of $8.35M and award fee of $7.25M, needs further breakdown to assess per-unit cost against industry benchmarks for F-100 engines.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method limits price discovery and may result in the government paying a premium compared to a competitive environment.
Taxpayer Impact: The lack of competition for this defense contract means taxpayers may have overpaid due to the absence of market forces driving down costs.
Public Impact
Critical defense components like aircraft engines are subject to significant taxpayer investment. Procurement methods directly impact the efficiency and cost-effectiveness of military readiness. Lack of transparency in sole-source contracts can erode public trust in government spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Limited price discovery
Positive Signals
- Essential defense procurement
- Fixed Price Award Fee structure
Sector Analysis
This contract falls within the Defense sector, specifically for aircraft engines and components. Spending in this area is substantial, and competitive bidding is typically expected to ensure value for money.
Small Business Impact
Analysis of small business participation is not available from the provided data, but the prime contractor is a large corporation, suggesting limited direct opportunities for small businesses in this specific award.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure the contractor is delivering quality products at a fair price, despite the absence of competitive pressure.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for inflated pricing.
- Limited transparency on justification.
- Award fee mechanism needs scrutiny.
- High value for a single award.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ct, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.6 million to RTX CORPORATION. 200306!000776!5700!GD60 !OKLAHOMA CITY ALC/LPD !SP040001D9405 !A!N! !N!SD20 !20030331!20041130!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTFORD !CONN !+000015614017!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !3BSR!F-100 !336412!E! !5!A!S! ! !A!20110216!B
Who is the contractor on this award?
The obligated recipient is RTX 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 $15.6 million.
What is the period of performance?
Start: 2003-03-31. End: 2004-11-30.
What was the justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED'. A formal justification for this sole-source award would typically be required under federal procurement regulations, outlining reasons such as unique capabilities, urgent need, or lack of viable alternatives. Without this justification, it's difficult to assess the necessity of bypassing competition.
How does the award fee structure ensure value for taxpayer money in a sole-source scenario?
The Fixed Price Award Fee (FP AF) structure aims to incentivize contractor performance by linking a portion of the payment to achieving specific objectives. However, in a sole-source context, the baseline for 'fairness' and the criteria for the award fee itself require rigorous government evaluation to prevent inflated costs and ensure the fee truly reflects exceptional performance rather than just meeting minimum requirements.
What is the benchmark cost for F-100 engine components to assess the value of this $15.6M award?
Determining a precise benchmark cost for F-100 engine components is complex due to variations in specific parts, quantities, and contract terms. However, the total award value of $15.6 million over approximately 20 months suggests a substantial investment. A thorough analysis would involve comparing the per-unit costs of similar components procured competitively or through other government contracts to identify potential overpricing.
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
Offers Received: 1
Pricing Type: FIXED PRICE AWARD FEE (M)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp (UEI: 001344142)
Address: 400 MAIN ST, EAST HARTFORD, CT, 01
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SP040001D9405
IDV Type: IDC
Timeline
Start Date: 2003-03-31
Current End Date: 2004-11-30
Potential End Date: 2004-11-30 00:00:00
Last Modified: 2011-04-26
More Contracts from RTX Corporation
- LOT 12 AAC Long Lead for Propulsion Systems — $8.7B (Department of Defense)
- 200204!008533!1700!AF600 !naval AIR Systems Command !N0001902C3003 !A!N! !N! !20011026!20120430!001447952!001447952!001344142!n!united Technologies Corp !400 Main Street !east Hartford !ct!06108!22700!003!09!east Hartford !hartford !conn !+000014000000!n!n!004803460088!ac15!rdte/Aircraft-Eng/Manuf Develop !a1b!aircraft Engines and Spares !2ama!jast/Jsf !541710!E! !3! ! ! ! ! !99990909!B! ! !A! !d!n!r!1!001!n!1a!a!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $7.9B (Department of Defense)
- LOT 15 FMS-1 F135 Ctol Prop System — $7.5B (Department of Defense)
- FY21 PBL2 — $4.9B (Department of Defense)
- F119 Engine Long Term Sustainment Program for the Raptor Engine (spare) — $3.6B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)