Department of Defense awards $30.7M contract for industrial high-speed drives, with RTX Corporation as the sole provider

Contract Overview

Contract Amount: $30,678,175 ($30.7M)

Contractor: RTX Corporation

Awarding Agency: Department of Defense

Start Date: 2009-08-10

End Date: 2012-09-30

Contract Duration: 1,147 days

Daily Burn Rate: $26.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CHAMBER,COMBUSTION,

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $30.7 million to RTX CORPORATION for work described as: CHAMBER,COMBUSTION, Key points: 1. The contract value of $30.7 million for speed changers and industrial drives represents a significant investment in specialized equipment. 2. RTX Corporation, a major defense contractor, holds this award, indicating a concentrated supplier base for these critical components. 3. The contract's duration of over 1100 days suggests a long-term need for these industrial drives within the Defense Logistics Agency. 4. The 'NOT AVAILABLE FOR COMPETITION' status raises questions about the availability of alternative suppliers and potential cost efficiencies. 5. The firm fixed-price contract type aims to provide cost certainty for the government, though competition is a key driver of optimal pricing. 6. The absence of small business subcontracting goals suggests this contract may not directly leverage the small business industrial base.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns or comparable contract data. The $30.7 million award over approximately three years indicates a substantial investment per year. However, the lack of competition means there's no market-driven price discovery to assess if this represents excellent value for money. Without knowing the specific technical requirements and the proprietary nature of the technology, it's difficult to definitively state if the pricing is competitive. Further analysis would require understanding the unit costs and comparing them to industry standards for similar high-speed industrial drives, if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The data indicates 'NOT AVAILABLE FOR COMPETITION,' suggesting that only one source, RTX Corporation, was considered capable of fulfilling the requirement. This lack of competition limits the government's ability to solicit bids from multiple vendors, which typically drives down prices and encourages innovation. The absence of a competitive process means that the government did not benefit from the price discovery that occurs when multiple companies vie for a contract.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium for goods or services, as there is no competitive pressure to ensure the lowest possible price. This can lead to less efficient use of public funds.

Public Impact

The primary beneficiaries are likely military operations requiring specialized industrial high-speed drives for equipment maintenance and readiness. The services delivered include the provision of critical components essential for the functioning of various defense systems and infrastructure. The geographic impact is primarily within the Department of Defense's operational footprint, with potential implications for logistics and maintenance facilities. Workforce implications may include specialized technical roles for installation, maintenance, and support of these industrial drives within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits opportunities for other qualified vendors.
Potential for vendor lock-in due to specialized nature of the product.
Limited transparency into the pricing structure due to non-competitive award.

Positive Signals

RTX Corporation is a well-established defense contractor with a proven track record.
Firm fixed-price contract provides cost certainty for the government.
Contract ensures the availability of critical components for defense readiness.
Long contract duration suggests a sustained and important need.

Sector Analysis

The industrial high-speed drive and gear manufacturing sector is a specialized niche within the broader industrial equipment market. This contract falls under the manufacturing of industrial machinery, specifically focusing on components critical for heavy-duty applications. The defense sector often requires highly specialized and robust equipment, leading to concentrated supplier bases for certain components. Comparable spending benchmarks are difficult to ascertain without more specific data on the type and scale of these drives, but the $30.7 million award suggests a significant procurement for specialized industrial machinery.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as there are no explicit set-aside provisions mentioned and the prime contractor is a large corporation. This suggests that subcontracting opportunities for small businesses in this specific award may be limited, unless RTX Corporation voluntarily engages them. The absence of small business subcontracting goals means there's no direct mechanism to ensure the small business industrial base benefits from this procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Logistics Agency's internal oversight mechanisms. As a firm fixed-price contract, the primary accountability measure is the delivery of the specified goods according to the contract terms. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency Procurement
Industrial Machinery Manufacturing
High-Speed Drive Systems
RTX Corporation Contracts
Sole-Source Defense Procurements

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 $30.7 million to RTX CORPORATION. CHAMBER,COMBUSTION,

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 $30.7 million.

What is the period of performance?

Start: 2009-08-10. End: 2012-09-30.

What is the specific technical nature of the 'Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing' being procured, and why was it deemed not available for competition?

The specific technical nature of the 'Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing' refers to components essential for regulating rotational speed in industrial machinery, particularly those requiring high velocities and significant torque. These drives are critical for the operation of various heavy-duty equipment used in defense logistics and maintenance. The determination of 'NOT AVAILABLE FOR COMPETITION' typically stems from factors such as unique technical requirements, proprietary technology, the existence of only one known source capable of meeting stringent specifications, or urgent and compelling needs where a full and open competition would cause unacceptable delays. Without further details from the contracting agency, the precise reason for the sole-source award remains speculative but likely relates to specialized design, performance, or integration requirements that only RTX Corporation could fulfill at the time of award.

How does the $30.7 million contract value compare to historical spending on similar industrial high-speed drives by the Department of Defense?

Comparing the $30.7 million contract value to historical spending on similar industrial high-speed drives by the Department of Defense is challenging without access to detailed historical procurement data specific to this product category and contractor. The provided data indicates this is a single award with a duration of over 1100 days (approximately 3 years). To establish a historical context, one would need to analyze past contracts for speed changers, industrial high-speed drives, and related gear manufacturing awarded by the DoD, particularly to RTX Corporation or its predecessors/subsidiaries. Factors such as inflation, technological advancements, and changes in operational requirements would need to be considered for a meaningful comparison. Given the sole-source nature, this award might represent a specific, perhaps unique, requirement rather than a recurring commodity purchase, making direct historical comparisons less straightforward.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis to RTX Corporation?

Awarding a contract of $30.7 million on a sole-source basis to RTX Corporation carries several potential risks. Firstly, the lack of competition means the government may not be achieving the best possible price, potentially leading to overspending. There's a risk of vendor lock-in, where the government becomes overly reliant on RTX Corporation for these specific components, making it difficult and costly to switch suppliers in the future. Furthermore, sole-source awards can reduce transparency in pricing and cost justification. Without competitive pressure, there might be less incentive for the contractor to innovate or improve efficiency beyond meeting the minimum contract requirements. Finally, it limits opportunities for other capable small and large businesses to compete for and win government contracts, potentially impacting the broader defense industrial base.

What performance metrics or oversight mechanisms are in place to ensure the successful delivery of these industrial high-speed drives by RTX Corporation?

While the specific performance metrics and oversight mechanisms are not detailed in the provided data, standard government contracting practices would apply. For a firm fixed-price contract, the primary performance metric is the successful delivery of the specified goods (speed changers, industrial high-speed drives, and gears) by the agreed-upon deadlines and according to the technical specifications. Oversight would typically be conducted by the Defense Contract Management Agency (DCMA), which monitors contractor performance, quality control, and adherence to contract terms. This might include site visits, inspections of manufactured goods, and review of delivery schedules. The contract likely includes clauses for acceptance testing and remedies for non-conformance. Transparency regarding specific oversight activities and detailed performance metrics would typically be found in the contract's statement of work and associated clauses.

Given RTX Corporation's status as a major defense contractor, what is their general track record with similar industrial equipment procurements?

RTX Corporation (formerly Raytheon Technologies) is a major aerospace and defense conglomerate with a vast portfolio of products and services. Their track record with industrial equipment procurements, particularly those involving specialized components like high-speed drives, is generally extensive. They are known for delivering complex systems and components to various branches of the U.S. military and allied nations. While specific performance on every contract varies, RTX typically operates within stringent quality and performance standards demanded by the defense sector. Historical data would need to be consulted to assess their specific performance on past industrial drive contracts, including on-time delivery rates, quality compliance, and cost management. However, as a prime contractor for significant defense systems, they possess substantial experience in managing complex manufacturing and supply chains for critical equipment.

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

Address: 400 MAIN ST, EAST HARTFORD, CT, 06108

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $30,678,175

Exercised Options: $30,678,175

Current Obligation: $30,678,175

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPM40001D9405

IDV Type: IDC

Timeline