DoD's $28M Aircraft Engine Parts Contract Awarded to RTX Corporation Lacks Competition
Contract Overview
Contract Amount: $28,073,845 ($28.1M)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2010-07-28
End Date: 2012-11-30
Contract Duration: 856 days
Daily Burn Rate: $32.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AIRCRAFT ENGINE AND ENGINE PARTS MANUFACTURING (INCLUDING RESEARCH AND DEVELOPMENT)
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108
Plain-Language Summary
Department of Defense obligated $28.1 million to RTX CORPORATION for work described as: AIRCRAFT ENGINE AND ENGINE PARTS MANUFACTURING (INCLUDING RESEARCH AND DEVELOPMENT) Key points: 1. Significant spending on aircraft engine parts manufacturing. 2. Sole awardee RTX Corporation dominates this segment. 3. Lack of competition raises concerns about pricing and value. 4. Defense Logistics Agency is the primary contracting entity.
Value Assessment
Rating: questionable
The contract value of $28 million for aircraft engine parts is substantial. However, without competitive bidding, it's difficult to assess if this represents fair market value compared to similar contracts or industry benchmarks.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, RTX Corporation, was considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition likely results in a higher cost to taxpayers than if multiple bids were solicited.
Public Impact
Taxpayers may be overpaying for critical aircraft engine components due to the lack of competition. Reliance on a single supplier can create supply chain vulnerabilities for the Department of Defense. Future contracts in this area may continue to be awarded without competition, perpetuating potential inefficiencies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competitive pricing
- Potential for cost overruns
Positive Signals
- Contract awarded to a known industry leader
- Specific NAICS code indicates specialized manufacturing
Sector Analysis
This contract falls within the Aircraft Engine and Parts Manufacturing sector, a critical component of the aerospace and defense industry. Spending in this sector is often high due to the specialized nature and R&D involved.
Small Business Impact
The data indicates this contract was not awarded to small businesses, suggesting a focus on large, established defense contractors for this specialized manufacturing need.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government is receiving fair value and that competition is pursued where feasible.
Related Government Programs
- Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Lack of competition
- Potential for price gouging
- Supply chain dependency risk
- Limited transparency in pricing
Tags
speed-changer-industrial-high-speed-driv, department-of-defense, ct, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.1 million to RTX CORPORATION. AIRCRAFT ENGINE AND ENGINE PARTS MANUFACTURING (INCLUDING RESEARCH AND DEVELOPMENT)
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 $28.1 million.
What is the period of performance?
Start: 2010-07-28. End: 2012-11-30.
What is the justification for awarding this contract on a sole-source basis, and has a market research report been conducted to explore competitive options?
The justification for a sole-source award is crucial for understanding why competition was not pursued. Agencies typically conduct market research to determine if other capable sources exist. If none are found or if specific circumstances (like unique capabilities or urgent needs) prevent competition, a sole-source award might be justified, but this requires thorough documentation and review to ensure taxpayer funds are used efficiently.
How does the unit cost of these aircraft engine parts compare to industry benchmarks or historical pricing for similar components?
Benchmarking the unit cost against industry standards or historical data is essential for assessing value. Without competitive bids, it's challenging to determine if RTX Corporation's pricing is reasonable. A detailed cost analysis, potentially involving independent government cost estimators or comparison with commercial equivalents, would be necessary to validate the pricing and identify potential overcharges.
What measures are in place to ensure the quality and timely delivery of these critical aircraft engine parts, given the sole-source nature of the contract?
With a sole-source contract, robust quality assurance and performance monitoring are paramount. The Defense Logistics Agency should have stringent inspection processes and performance metrics in place to ensure RTX Corporation meets all contractual obligations regarding quality, delivery schedules, and technical specifications. Regular performance reviews and clear communication channels are vital to mitigate risks associated with a single supplier.
Industry Classification
NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing
Product/Service Code: ENGINES AND TURBINES AND COMPONENT
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp (UEI: 001344142)
Address: 400 MAIN ST, EAST HARTFORD, CT, 01
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $28,203,538
Exercised Options: $28,073,845
Current Obligation: $28,073,845
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPM40001D9405
IDV Type: IDC
Timeline
Start Date: 2010-07-28
Current End Date: 2012-11-30
Potential End Date: 2012-11-30 00:00:00
Last Modified: 2012-12-20
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