DoD awards $527M for aircraft engines, with RTX Corp. as the sole contractor

Contract Overview

Contract Amount: $52,698,590 ($52.7M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2004-09-22

End Date: 2011-04-01

Contract Duration: 2,382 days

Daily Burn Rate: $22.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE AWARD FEE

Sector: Defense

Official Description: 200412!001455!5700!GD60 !OKLAHOMA CITY ALC/LPD !SP040001D9405 !A!N! !N!SD53 ! !20040922!20061231!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTFORD !CONN !+000057396259!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336412!E! !5!A!S! ! ! !99990909!B! ! !A! !D!U!M!1!001!N!1G!A!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $52.7 million to RTX CORPORATION for work described as: 200412!001455!5700!GD60 !OKLAHOMA CITY ALC/LPD !SP040001D9405 !A!N! !N!SD53 ! !20040922!20061231!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HART… Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant contract value suggests a critical role in national defense aviation. 3. Long contract duration (2004-2011) indicates sustained need for these components. 4. The award to a single large corporation may limit opportunities for smaller suppliers. 5. Focus on aircraft engines points to a specialized segment within the aerospace industry.

Value Assessment

Rating: fair

The contract value of $527 million over its duration is substantial. However, without competitive bidding, it is difficult to benchmark the value for money. The pricing structure, described as Fixed Price Award Fee, suggests some performance incentives but also potential for cost overruns if not managed tightly. Comparing this to similar sole-source procurements for specialized aircraft components would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The justification for this approach is not provided in the data, but it typically implies a unique capability, urgent need, or lack of viable alternatives. The absence of multiple bidders means that price discovery through market forces was bypassed, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from a competitive bidding process. This can result in a higher overall expenditure for the defense budget.

Public Impact

The U.S. Department of Defense is the primary beneficiary, receiving critical aircraft engine components. The contract supports the operational readiness and maintenance of military aircraft. The geographic impact is primarily centered around the contractor's facilities in Connecticut. This contract likely supports a specialized workforce within the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency regarding the justification for sole-sourcing.
Potential for contractor lock-in due to specialized nature of components.

Positive Signals

Award to a major defense contractor (RTX Corporation) suggests established capability.
Long-term contract indicates a stable and predictable supply chain for critical parts.
Fixed Price Award Fee structure includes performance incentives.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft engine manufacturing and parts. The market for such specialized components is typically dominated by a few large, established players due to high barriers to entry, including significant R&D investment and stringent quality requirements. Comparable spending benchmarks would involve analyzing other large sole-source or competitively awarded contracts for similar high-value military aircraft components.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to a large corporation, RTX Corporation. There is no explicit information on subcontracting plans for small businesses. Sole-source awards to large prime contractors often reduce opportunities for small businesses to participate directly, though they may still be involved further down the supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The 'Award Fee' component suggests performance metrics are being tracked. Transparency is limited due to the sole-source nature, and further details on specific oversight mechanisms would require access to contract line item details and performance reviews.

Related Government Programs

Military Aircraft Procurement
Aerospace Manufacturing
Defense Logistics and Sustainment
Jet Engine Components

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.7 million to RTX CORPORATION. 200412!001455!5700!GD60 !OKLAHOMA CITY ALC/LPD !SP040001D9405 !A!N! !N!SD53 ! !20040922!20061231!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTFORD !CONN !+000057396259!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336412!E! !5!A!S! ! ! !999

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 $52.7 million.

What is the period of performance?

Start: 2004-09-22. End: 2011-04-01.

What is the specific justification provided by the Department of Defense for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-sourcing is employed when only one responsible source can provide the required supplies or services, often due to unique capabilities, proprietary technology, or urgent and compelling circumstances. Without this justification, it is difficult to assess whether the sole-source decision was appropriate and if it truly represented the best value for the government. Further investigation into the contract file or agency justifications would be needed to understand the rationale behind bypassing the competitive bidding process.

How does the pricing structure (Fixed Price Award Fee) compare to other sole-source contracts for similar defense components?

The Fixed Price Award Fee (FPAF) structure aims to provide cost certainty while incentivizing contractor performance. In a sole-source context, the 'fixed price' element sets a baseline, and the 'award fee' is earned based on meeting or exceeding specific performance targets. Comparing this to other sole-source contracts requires analyzing the target costs, award fee criteria, and actual award amounts paid. Without data on comparable contracts, it's challenging to definitively state if this pricing was advantageous. However, FPAF can sometimes lead to higher overall costs than a firm-fixed-price contract if the award fee criteria are not sufficiently stringent or if the baseline price is inflated due to lack of competition.

What is the track record of RTX Corporation (formerly United Technologies Corp.) in delivering similar aircraft engine components to the DoD?

RTX Corporation, through its legacy companies like Pratt & Whitney (a former United Technologies subsidiary), has a long and extensive history of supplying aircraft engines and components to the Department of Defense. They are a primary contractor for many major military aircraft platforms. Their track record generally includes significant technological innovation and substantial contract volume. However, like any large defense contractor, they have also faced scrutiny over pricing, performance, and program execution on various contracts. A detailed assessment would involve reviewing their performance history specifically on contracts for the type of engines or components covered by this award.

What are the potential risks associated with a sole-source award of this magnitude and duration?

The primary risks associated with a sole-source award of this magnitude ($527M) and duration (2004-2011) include: 1) Inflated pricing due to the absence of competitive pressure, leading to reduced value for taxpayer money. 2) Contractor complacency or reduced incentive to innovate or improve efficiency over the contract life. 3) Potential for vendor lock-in, making it difficult and costly to switch suppliers in the future. 4) Limited transparency in the procurement process, potentially masking inefficiencies or suboptimal decision-making. 5) Over-reliance on a single supplier for critical components, creating supply chain vulnerabilities if the contractor faces production issues or financial distress.

How does this contract's spending compare to overall DoD spending on aircraft engines and related parts over the same period?

This contract represents a significant portion of spending within the specific category of aircraft engines and parts for the period it covers (2004-2011). While $527 million is substantial, the total DoD budget for aircraft propulsion systems and spare parts is considerably larger, often running into billions of dollars annually, supporting numerous aircraft platforms across different branches of service. To contextualize this specific award, one would need to compare its value against the total obligated amounts for the relevant Product Service Code (PSC) or Federal Procurement Data System (FPDS) categories during those years. This single contract likely supported a specific fleet or program, contributing to the overall sustainment and readiness efforts.

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: NO

Parent Contract

Parent Award PIID: SP040001D9405

IDV Type: IDC

Timeline