DoD awards $31.5M for TF33 engine component spares, with RTX Corporation as sole provider

Contract Overview

Contract Amount: $31,448,422 ($31.4M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2019-08-13

End Date: 2024-09-30

Contract Duration: 1,875 days

Daily Burn Rate: $16.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NEW MANUFACTURE OF TF33 AIRCRAFT ENGINE COMPONENT SPARES

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $31.4 million to RTX CORPORATION for work described as: NEW MANUFACTURE OF TF33 AIRCRAFT ENGINE COMPONENT SPARES Key points: 1. Contract awarded to RTX Corporation for essential aircraft engine spares. 2. Sole-source award raises questions about competition and potential cost efficiencies. 3. Long-term contract duration suggests sustained need for these components. 4. Focus on manufacturing new spares indicates potential supply chain challenges or aging fleet requirements. 5. Fixed-price contract type shifts some cost risk to the government. 6. No small business set-aside noted, potentially limiting broader industry participation.

Value Assessment

Rating: fair

The contract value of $31.5 million for TF33 aircraft engine component spares appears to be a significant investment. Without specific benchmarks for these specialized components, it is difficult to definitively assess value for money. However, as a sole-source award to RTX Corporation, there is a reduced opportunity for competitive pricing, which could lead to higher per-unit costs compared to a competed scenario. The fixed-price nature of the contract provides some cost certainty, but the absence of competitive pressure warrants careful monitoring of expenditures.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to RTX Corporation. This indicates that only one responsible source was determined to be capable of meeting the government's needs. The lack of competition means that the government did not benefit from a bidding process, which typically drives down prices and encourages innovation. While sole-source awards can be justified in specific circumstances, such as unique technical requirements or proprietary technology, they necessitate rigorous justification to ensure fair pricing and prevent potential overspending.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. The government has limited leverage to negotiate prices, potentially leading to less efficient use of public funds.

Public Impact

The Department of Defense benefits from the continued availability of critical spare parts for TF33 aircraft engines. This contract ensures the operational readiness of aircraft relying on TF33 engines. The primary service delivered is the manufacture and supply of new engine component spares. The geographic impact is primarily within the United States, where RTX Corporation manufactures these components. Workforce implications include sustained employment at RTX Corporation's manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Long contract duration (over 5 years) could lock in potentially suboptimal pricing.
Lack of small business participation may reduce opportunities for smaller firms in the aerospace supply chain.
Fixed-price contract shifts risk, but without competition, the baseline price is unverified.
Reliance on a single manufacturer for critical spares could pose supply chain risks if not managed proactively.

Positive Signals

Ensures availability of critical, potentially specialized, engine components.
Fixed-price contract provides cost predictability for the government.
RTX Corporation is a known entity with established manufacturing capabilities.
Contract supports the sustainment of existing military aircraft platforms.

Sector Analysis

The TF33 engine is a turbofan engine used in various military aircraft, including the B-52 bomber. The market for specialized aircraft engine components is often characterized by high barriers to entry due to complex manufacturing processes, stringent quality control, and proprietary technology. As such, it is not uncommon for contracts for such parts to be awarded to the original equipment manufacturer or a limited number of specialized suppliers. The total addressable market for TF33 spares is driven by the operational tempo and lifespan of the aircraft utilizing these engines.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the specialized nature of aircraft engine component manufacturing, it is possible that the capabilities required are concentrated among larger, established firms like RTX Corporation. However, the absence of a set-aside means that opportunities for small businesses to participate, either as prime contractors or through subcontracting, may be limited. Further analysis would be needed to determine if subcontracting plans exist to engage small businesses in the supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring contract compliance, quality, and fair pricing. The Department of Defense's Inspector General may also conduct audits or investigations into contract performance and expenditure. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics are often internal.

Related Government Programs

Aircraft Engine Component Manufacturing
Defense Logistics Agency Procurement
Sole-Source Defense Contracts
TF33 Engine Sustainment
Aerospace Parts Manufacturing

Risk Flags

Sole-source award
Potential for cost overruns
Limited competition
Long-term contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.4 million to RTX CORPORATION. NEW MANUFACTURE OF TF33 AIRCRAFT ENGINE COMPONENT SPARES

Who is the contractor on this award?

The obligated recipient is RTX CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $31.4 million.

What is the period of performance?

Start: 2019-08-13. End: 2024-09-30.

What is RTX Corporation's track record with similar sole-source contracts for defense components?

RTX Corporation, through its various subsidiaries (including Pratt & Whitney, a key engine manufacturer), has a long history of securing sole-source contracts for specialized aerospace and defense components. This is often due to the proprietary nature of their designs, the complexity of manufacturing, and the need for original equipment manufacturer (OEM) expertise for critical systems. While this provides assurance of capability, it also means that the government frequently relies on RTX for specific parts without the benefit of competitive bidding. Analyzing past sole-source awards to RTX for similar engine components could reveal patterns in pricing, delivery performance, and the justification provided for non-competitive procurement, offering insights into the potential value and risks associated with this current contract.

How does the pricing of these TF33 engine component spares compare to market rates or similar contracts?

Benchmarking the pricing for these specific TF33 engine component spares is challenging without access to detailed cost breakdowns or comparable contract data. As a sole-source award to RTX Corporation, the government is likely paying a premium compared to what might be achieved through a competitive bidding process. To assess value, one would ideally compare the per-unit cost of these spares against historical pricing for the same components (if available), prices for similar components on different platforms, or against independent cost estimates. The fixed-price nature provides some predictability, but the lack of competition means the baseline price is not market-tested, making a definitive value-for-money assessment difficult without further data.

What are the primary risks associated with this sole-source contract for TF33 engine component spares?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competitive pressure. RTX Corporation, as the sole provider, has significant leverage in pricing negotiations. Another risk is supply chain vulnerability; reliance on a single manufacturer for critical spares can lead to delays or shortages if RTX faces production issues, labor disputes, or other operational disruptions. Furthermore, without competition, there is less incentive for the contractor to aggressively pursue cost-saving innovations. The long duration of the contract also increases the risk of the government being locked into unfavorable pricing over an extended period.

How effective is the Defense Logistics Agency (DLA) in managing sole-source procurements for specialized parts like these?

The DLA is a major logistics and supply chain management organization within the DoD, responsible for procuring a vast array of items, including spare parts. Their effectiveness in managing sole-source procurements hinges on robust internal processes for justifying sole-source awards, conducting thorough price analyses, and maintaining strong oversight. For specialized parts like TF33 engine components, where competition may be inherently limited, the DLA's role is crucial in ensuring that the government obtains the best possible value under the circumstances. This involves rigorous negotiation, monitoring contractor performance, and potentially exploring alternative sourcing strategies or long-term sustainment agreements to mitigate risks.

What are the historical spending patterns for TF33 aircraft engine component spares?

Historical spending data for TF33 aircraft engine component spares would provide valuable context for this $31.5 million award. Analyzing past contract awards for these components, including their values, durations, and whether they were competed or sole-sourced, can reveal trends in demand, price fluctuations, and the government's reliance on specific contractors. For instance, a history of consistent sole-source awards might indicate a mature market with limited competition, while a pattern of increasing costs over time could signal a need for deeper cost analysis or alternative strategies. Understanding this historical spending context is essential for evaluating the current contract's reasonableness and identifying potential long-term cost efficiencies.

What is the strategic importance of maintaining a supply of TF33 engine spares for the DoD?

The TF33 engine has been a workhorse for several key U.S. military platforms, most notably the B-52 Stratofortress bomber fleet, which is undergoing a lengthy modernization program. Maintaining an adequate supply of spare parts for these engines is strategically critical for ensuring the operational readiness and longevity of these vital assets. The TF33 is an older engine design, and the availability of new manufactured components, rather than relying solely on cannibalization or limited existing stock, is essential for sustaining the fleet through its extended service life. Disruptions in the supply of these spares could directly impact the mission capability of aircraft that are central to national defense.

Industry Classification

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

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,448,422

Exercised Options: $31,448,422

Current Obligation: $31,448,422

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPE4AX19D9441

IDV Type: IDC

Timeline