DoD awards $22.7M for aircraft engines, raising concerns about competition and value
Contract Overview
Contract Amount: $1,661,029,666 ($1.7B)
Contractor: RTX Corporation
Awarding Agency: Department of Defense
Start Date: 2003-05-16
End Date: 2008-03-31
Contract Duration: 1,781 days
Daily Burn Rate: $932.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Defense
Official Description: 200308!000046!5700!GU57 !ASC/LPK BLDG 28 ROOM 207 !F3365702C0006 !A!N! !N! !20030516!20071221!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTFORD !CONN !+000140098476!N!Y!001257805220!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !3ADG!C-17 CARGO TRANSPORT !336412!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!K!1!001!N!1A!Z!N!E! ! !Y!C!N! ! ! !A!A!A!A!000!A!B!Y! ! ! ! ! ! !0001! !
Place of Performance
Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06108
Plain-Language Summary
Department of Defense obligated $1.66 billion to RTX CORPORATION for work described as: 200308!000046!5700!GU57 !ASC/LPK BLDG 28 ROOM 207 !F3365702C0006 !A!N! !N! !20030516!20071221!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTF… Key points: 1. Contract awarded to United Technologies Corp. for aircraft engines and spares. 2. Significant portion of the contract value ($22.7M) raises questions about pricing. 3. The contract was not competed, suggesting potential limitations in market access. 4. The sector is critical for defense, but lack of competition may impact innovation.
Value Assessment
Rating: questionable
The contract value of $22.7 million for aircraft engines and spares appears high given the lack of competition. Benchmarking against similar fixed-price contracts with economic price adjustment clauses is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, meaning it was not competed. This limits price discovery and may lead to higher costs for the government compared to a competitive procurement.
Taxpayer Impact: The lack of competition could result in taxpayers paying a premium for these aircraft engine components.
Public Impact
Taxpayers may be overpaying due to the sole-source nature of the award. Limited visibility into the cost drivers for these critical aircraft components. Potential for reduced innovation and efficiency without competitive pressure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing
- Limited transparency on cost breakdown
Positive Signals
- Awarded to a known entity
- Addresses a critical defense need
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engines. Spending in this area is substantial, and competitive bidding is typically expected to ensure value for money.
Small Business Impact
There is no indication that small businesses were involved in this sole-source contract, which is common for highly specialized defense procurements. Further analysis would be needed to determine if subcontracting opportunities were explored.
Oversight & Accountability
The sole-source nature of this award warrants closer oversight to ensure fair pricing and prevent potential cost overruns. Transparency in the justification for not competing the contract is crucial.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Potential for inflated pricing
- Lack of transparency in cost justification
- Limited market competition
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ct, dca, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.66 billion to RTX CORPORATION. 200308!000046!5700!GU57 !ASC/LPK BLDG 28 ROOM 207 !F3365702C0006 !A!N! !N! !20030516!20071221!001447952!835551474!001344142!N!UNITED TECHNOLOGIES CORP !400 MAIN STREET !EAST HARTFORD !CT!06108!22700!003!09!EAST HARTFORD !HARTFORD !CONN !+000140098476!N!Y!001257805220!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !3ADG!C-17 CARGO TRANSPORT !336412!E! !3! ! ! ! ! !99990909!B
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 $1.66 billion.
What is the period of performance?
Start: 2003-05-16. End: 2008-03-31.
What was the specific justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent needs, or the unavailability of other sources. Without access to the contract's justification documentation, it's impossible to determine the precise reasons. However, such justifications are often scrutinized to ensure they are valid and that competition was genuinely not feasible.
How does the pricing compare to similar sole-source contracts for aircraft engines?
Comparing pricing for sole-source contracts is challenging due to the lack of competitive benchmarks. However, a review of historical sole-source awards for similar engine components, adjusted for inflation and specific technical requirements, could provide some insight. The absence of competition inherently reduces downward pressure on price, making it crucial to rely on robust cost analysis by the procuring agency.
What is the long-term impact of non-competed contracts on the defense supply chain for aircraft engines?
Long-term reliance on non-competed contracts can stifle innovation and reduce overall efficiency within the defense supply chain. It may also lead to vendor lock-in and potentially higher sustained costs. While sometimes necessary for specialized or urgent requirements, a consistent pattern of sole-source awards can diminish the government's bargaining power and limit the entry of new, potentially more cost-effective suppliers.
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
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Contractor Details
Parent Company: RTX Corp (UEI: 001344142)
Address: 400 MAIN STREET, EAST HARTFORD, CT, 01
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Multi-Year Contract: Yes
Cost or Pricing Data: NO
Timeline
Start Date: 2003-05-16
Current End Date: 2008-03-31
Potential End Date: 2008-03-31 00:00:00
Last Modified: 2008-10-24
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