DoD spent over $22.8M on jet engine components, with limited competition and no small business set-aside

Contract Overview

Contract Amount: $22,832,459 ($22.8M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2005-09-30

End Date: 2009-09-30

Contract Duration: 1,461 days

Daily Burn Rate: $15.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: NOT REPORTED

Sector: Defense

Official Description: 200511!002236!5700!FA8104!OC-ALC/LPK !SP040001D9405 !A!N! !N!SD88 ! !20050930!20071231!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORPORATIO!400 MAIN ST !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTFORD !CONN !+000022834192!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336412!E! !5!A!S! ! ! !20200930!B! ! !A! !D!U!M!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!Y! ! ! ! ! ! !0001! !

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to RTX CORPORATION for work described as: 200511!002236!5700!FA8104!OC-ALC/LPK !SP040001D9405 !A!N! !N!SD88 ! !20050930!20071231!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORPORATIO!400 MAIN ST !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HART… Key points: 1. Contract awarded for aircraft engine components, indicating a need for specialized parts in the defense sector. 2. The contract's duration of approximately 4 years suggests a sustained requirement for these components. 3. The award was not competed, raising questions about potential cost efficiencies and market exploration. 4. The prime contractor is a large corporation, with no explicit mention of small business subcontracting. 5. The contract falls under the 'Aircraft Engines and Spares' category, a critical area for military aviation readiness.

Value Assessment

Rating: fair

The total award amount of $22.8 million for aircraft engine components over a roughly 4-year period appears to be within a reasonable range for specialized defense matériel. However, without detailed breakdowns of the specific components, quantities, and the contractor's cost structure, a precise value-for-money assessment is challenging. Benchmarking against similar sole-source or limited-competition contracts for comparable engine parts would be necessary for a more definitive evaluation of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning it was awarded directly to a single source without soliciting bids from other potential suppliers. The lack of competition limits the government's ability to explore a wider range of pricing and technical solutions. While sole-source awards can be justified in specific circumstances, such as when only one vendor can provide the required item, it generally leads to less favorable pricing outcomes compared to full and open competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as the government did not benefit from the price discovery mechanisms inherent in a competitive procurement process.

Public Impact

The U.S. Department of the Air Force benefits from the acquisition of critical aircraft engine components, ensuring the operational readiness of its fleet. Services delivered include the provision of specialized parts for jet engines, essential for maintaining aircraft functionality. The geographic impact is primarily within the United States, supporting defense logistics and maintenance operations. Workforce implications include supporting jobs within the aerospace manufacturing sector, particularly at the prime contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Absence of small business participation could limit broader economic impact.
Limited transparency in pricing due to sole-source award.

Positive Signals

Ensures availability of critical aircraft engine components for defense needs.
Supports a major defense contractor, potentially stabilizing employment in that sector.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and a reliance on specialized manufacturing capabilities. Contracts for aircraft engines and their components are a substantial part of this sector's spending. This particular contract, for jet engine components, falls within a niche that often involves proprietary technology and long-standing relationships between manufacturers and the military. Comparable spending benchmarks would typically be found within other large sole-source or limited-competition awards for similar high-value, specialized aerospace parts.

Small Business Impact

This contract was not set aside for small businesses, nor is there any indication of subcontracting requirements for small businesses. The prime contractor is a large corporation, suggesting that the primary focus of this award was on fulfilling a specific technical requirement rather than promoting small business participation. This approach may limit opportunities for smaller firms to engage in the defense supply chain for these particular components.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures would be tied to the terms and conditions of the sole-source award, including delivery schedules and quality specifications. Transparency is limited due to the non-competitive nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Aircraft Engine Repair and Maintenance
Aerospace Manufacturing
Defense Procurement
Jet Engine Components

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to RTX CORPORATION. 200511!002236!5700!FA8104!OC-ALC/LPK !SP040001D9405 !A!N! !N!SD88 ! !20050930!20071231!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORPORATIO!400 MAIN ST !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTFORD !CONN !+000022834192!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !000 !* !336412!E! !5!A!S! ! ! !202

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 Air Force).

What is the total obligated amount?

The obligated amount is $22.8 million.

What is the period of performance?

Start: 2005-09-30. End: 2009-09-30.

What specific types of jet engine components were procured under this contract?

The provided data indicates the contract is for 'GAS TURBINES AND JET ENGINES, ACFT & COMPS' and falls under the Product Service Code (PSC) '336412' for Aircraft Engines and Engine Parts Manufacturing. However, the specific sub-components, such as turbine blades, combustion chambers, or control systems, are not detailed in the summary data. Further investigation into the contract's statement of work or detailed line item descriptions would be required to identify the precise components procured. These components are critical for the operational efficiency and safety of military aircraft engines.

How does the $22.8 million award compare to historical spending on similar jet engine components by the Air Force?

Comparing this $22.8 million award requires context regarding the contract's duration and the specific components. The contract spanned from September 30, 2005, to December 31, 2007 (approximately 2 years and 3 months of performance, though the award dates suggest a longer period). Without knowing if this was a one-time purchase or part of a larger, multi-year sustainment program, direct historical comparisons are difficult. However, the Air Force consistently spends billions annually on aircraft sustainment, including engine parts. This $22.8 million figure represents a moderate investment for specialized components over that period, but its significance is amplified by the lack of competition, which could have inflated the price compared to a competed procurement.

What are the risks associated with a sole-source award for critical defense components like jet engine parts?

Sole-source awards for critical defense components carry several risks. Primarily, the absence of competition can lead to inflated prices, as the government lacks the leverage of multiple bidders driving down costs. This can result in a lower value for taxpayer money. Secondly, it limits the government's access to potentially innovative solutions or alternative technologies that other manufacturers might offer. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially facing supply chain disruptions if that supplier encounters issues. Finally, without competitive pressure, there might be less incentive for the sole-source provider to prioritize efficiency or cost reduction.

What is the track record of United Technologies Corporation (now RTX Corporation) as a defense contractor?

United Technologies Corporation (UTC), now part of RTX Corporation, has a long and extensive history as a major defense contractor. It has been a significant supplier of aerospace systems, including engines, avionics, and other components, to the U.S. military and international customers for decades. UTC, through its subsidiaries like Pratt & Whitney (a major jet engine manufacturer), has consistently secured large contracts across various defense platforms. While generally regarded as a capable supplier, like any large contractor, it has faced scrutiny over pricing and contract performance on occasion. Its substantial role in the defense industrial base means its performance and pricing are critical to military readiness and budget considerations.

How does the PSC code '336412' relate to the overall defense spending on aircraft engines?

The Product Service Code (PSC) '336412' specifically designates 'Aircraft Engines and Engine Parts Manufacturing.' This code is crucial for categorizing federal spending related to the production and supply of these vital components. Defense spending on aircraft engines and their parts represents a significant portion of the overall defense budget, particularly for the Air Force and Navy, which operate large fleets of aircraft. This category encompasses everything from complete engine overhauls to the manufacturing of individual components like blades, bearings, and casings. Contracts under this PSC are often high-value due to the complexity, advanced materials, and stringent quality requirements involved in aerospace manufacturing.

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: NOT REPORTED (NO)

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, Manufacturer of Goods, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP040001D9405

IDV Type: IDC

Timeline