DoD awards $18.7M for aircraft engines and containers, with Rolls-Royce Corporation as the sole provider

Contract Overview

Contract Amount: $18,732,808 ($18.7M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2008-12-23

End Date: 2010-02-28

Contract Duration: 432 days

Daily Burn Rate: $43.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ENGINES AND CONTAINERS

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46241

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to ROLLS-ROYCE CORPORATION for work described as: ENGINES AND CONTAINERS Key points: 1. The contract's value of $18.7 million represents a significant investment in specialized aircraft components. 2. Sole-source procurement raises questions about potential price inflation and lack of competitive pressure. 3. The fixed-firm price contract structure aims to mitigate cost overruns for the government. 4. The duration of 432 days suggests a focused, short-term need for these critical parts. 5. The contract falls under the 'Other Aircraft Parts' manufacturing NAICS code, indicating a niche market. 6. The award to Rolls-Royce Corporation highlights their established role in the aerospace supply chain.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific product category. Without competitive bids, it's difficult to ascertain if the $18.7 million represents a fair market price. However, the firm fixed-price structure provides some cost certainty. The contract's value should be compared against historical Rolls-Royce engine component contracts and similar specialized aerospace parts to assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Rolls-Royce Corporation, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and can potentially lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings that competition usually drives. This can result in a higher overall expenditure for the government compared to a competitively bid contract.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Army, ensuring operational readiness of aircraft. The services delivered involve the provision of specialized aircraft engines and containers, critical for aviation logistics and maintenance. The geographic impact is primarily within the United States, supporting defense operations. Workforce implications include supporting specialized manufacturing jobs within the aerospace sector, likely at Rolls-Royce facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency in government spending.
Dependence on a single supplier can create supply chain risks.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award to an established manufacturer like Rolls-Royce suggests reliability.
Specific NAICS code indicates a focused and potentially specialized requirement.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, significant R&D investment, and stringent quality control. Contracts for aircraft engines and related components are typically awarded to a limited number of specialized firms. The $18.7 million award to Rolls-Royce Corporation fits within this context, representing a procurement of specialized parts within a mature but concentrated industry. Comparable spending benchmarks would involve other large defense contracts for aircraft systems or major components.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the sole-source nature of the award means there are no subcontracting opportunities mandated for small businesses through this specific procurement. This contract is unlikely to have a direct positive impact on the small business ecosystem, as it bypasses the typical avenues for small business participation in federal contracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight bodies. As a sole-source award, it may undergo additional scrutiny to justify the lack of competition. Transparency is limited by the non-competitive nature, but contract details should be available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Aircraft Engine Manufacturing
Aerospace Parts Procurement
Department of the Army Contracts
Defense Logistics Support

Risk Flags

Sole-source award lacks competitive pricing.
Potential for price escalation due to single supplier.
Limited transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to ROLLS-ROYCE CORPORATION. ENGINES AND CONTAINERS

Who is the contractor on this award?

The obligated recipient is ROLLS-ROYCE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2008-12-23. End: 2010-02-28.

What is the historical spending pattern for Rolls-Royce Corporation with the Department of Defense for similar aircraft components?

Analyzing historical spending for Rolls-Royce Corporation with the Department of Defense for similar aircraft components would require a deep dive into federal procurement databases like FPDS or USASpending.org. This would involve filtering contracts by the specific contractor, the awarding agency (DoD), and relevant product service codes (PSCs) or NAICS codes related to aircraft engines and parts. The goal would be to identify trends in contract values, durations, and types (e.g., competitive vs. sole-source) over several fiscal years. Understanding this history can reveal if this $18.7 million award is typical, an outlier, or part of a larger, ongoing procurement strategy. It can also highlight any shifts in procurement methods or spending levels for these critical components.

How does the firm fixed-price (FFP) contract type mitigate risk for the government in this sole-source award?

A Firm Fixed-Price (FFP) contract type is designed to provide the government with cost certainty, which is particularly valuable in sole-source situations where competitive pressure on price is absent. Under an FFP contract, the contractor (Rolls-Royce Corporation) assumes the risk of cost overruns. The agreed-upon price is final, regardless of the contractor's actual costs incurred. This structure incentivizes the contractor to manage its expenses efficiently to maintain profitability. For the government, it means the total expenditure is known upfront, simplifying budgeting and financial planning. While it doesn't guarantee the lowest possible price (as competition would), it protects against unexpected cost increases that could occur with other contract types like cost-plus.

What specific aircraft systems or platforms are these engines and containers intended for?

The provided data does not specify the exact aircraft systems or platforms for which these Rolls-Royce engines and containers are intended. The NAICS code '336413 - Other Aircraft Parts and Auxiliary Equipment Manufacturing' and the description 'ENGINES AND CONTAINERS' are broad. To determine the specific application, one would need to consult the detailed contract award documents, which are often available through the Federal Procurement Data System (FPDS) or agency-specific contract award portals. Such documents typically include a more detailed statement of work or description of the goods/services. Knowing the platform (e.g., specific helicopter, transport plane, or fighter jet) would provide crucial context for the contract's importance and value.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The justification for a sole-source award, especially for a significant value like $18.7 million, typically stems from specific circumstances outlined in federal acquisition regulations (FAR). Common justifications include that only one responsible source is capable of providing the required supply or service, or that a compelling urgency necessitates limiting competition. For specialized aerospace components like engines, it's possible that Rolls-Royce Corporation holds unique patents, proprietary technology, or possesses the sole manufacturing capability and necessary certifications required by the Department of the Army. Without access to the specific justification cited in the contract award documentation (often referred to as a Justification and Approval or J&A), it remains speculative. However, the nature of advanced aerospace manufacturing often leads to sole-source or limited-source procurements.

What are the potential risks associated with relying on a single supplier like Rolls-Royce Corporation for critical aircraft components?

Relying on a single supplier, such as Rolls-Royce Corporation in this case, for critical aircraft components presents several potential risks. Firstly, there's a risk of price escalation over time, as the lack of competition removes the downward pressure on pricing that multiple bidders would typically exert. Secondly, supply chain disruptions become a significant concern; any issue at the sole supplier's facility (e.g., labor strikes, natural disasters, production problems) could halt the delivery of essential parts, impacting military readiness. Thirdly, there's a risk of technological stagnation if the sole supplier doesn't face competitive pressure to innovate or improve its offerings. Finally, the government may have less leverage in negotiating terms or addressing quality issues when there are no alternative suppliers readily available.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rolls-Royce Holdings PLC (UEI: 217127290)

Address: 2355 S TIBBS AVE, INDIANAPOLIS, IN, 07

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,732,808

Exercised Options: $18,732,808

Current Obligation: $18,732,808

Timeline