DoD awards $180M for C-130J Propulsion Long Term Sustainment to Rolls-Royce

Contract Overview

Contract Amount: $179,680,267 ($179.7M)

Contractor: Rolls-Royce Corporation

Awarding Agency: Department of Defense

Start Date: 2019-01-31

End Date: 2020-01-31

Contract Duration: 365 days

Daily Burn Rate: $492.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-130J PROPULSION LONG TERM SUSTAINMENT

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46225

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $179.7 million to ROLLS-ROYCE CORPORATION for work described as: C-130J PROPULSION LONG TERM SUSTAINMENT Key points: 1. High value contract for critical aircraft sustainment. 2. Sole-source award to incumbent provider raises competition concerns. 3. Potential for cost overruns due to lack of competitive pricing. 4. Sustainment of a key military transport aircraft fleet.

Value Assessment

Rating: questionable

The contract value of $179.7M for a one-year period is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential alternatives or previous sustainment contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Rolls-Royce Corporation. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for sustainment services.

Public Impact

Ensures continued operational readiness of the C-130J Super Hercules fleet. Supports critical airlift capabilities for military operations. Impacts the long-term maintenance and operational costs of a significant Air Force asset.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for price escalation

Positive Signals

Ensures sustainment of critical aircraft
Long-term support for fleet readiness

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft engine maintenance and sustainment. Spending in this area is critical for maintaining military readiness but can be prone to higher costs when not competitively bid.

Small Business Impact

This contract does not appear to involve small business participation, as it is a sole-source award to a large corporation. Further analysis would be needed to confirm if any subcontracting opportunities exist for small businesses.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential cost creep. Robust performance metrics and regular reviews are essential for accountability.

Related Government Programs

Aircraft Engine and Engine Parts Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competitive pricing.
Potential for cost overruns without competition.
Dependence on a single provider for critical sustainment.
Lack of transparency in price justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $179.7 million to ROLLS-ROYCE CORPORATION. C-130J PROPULSION LONG TERM SUSTAINMENT

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 Air Force).

What is the total obligated amount?

The obligated amount is $179.7 million.

What is the period of performance?

Start: 2019-01-31. End: 2020-01-31.

What is the historical cost trend for C-130J propulsion sustainment with Rolls-Royce?

Analyzing historical cost data for similar sustainment contracts with Rolls-Royce for the C-130J propulsion system is crucial. This would help establish a baseline and identify any significant price increases or deviations that warrant further investigation, especially given the sole-source nature of the current award.

Are there any viable alternative sustainment providers for the C-130J propulsion system?

Investigating the availability and capability of alternative providers for C-130J propulsion sustainment is important. Even if Rolls-Royce is the original equipment manufacturer, exploring the market for potential competition or alternative support solutions could drive better pricing and terms for the Air Force.

What are the key performance indicators (KPIs) and service level agreements (SLAs) in this contract?

Understanding the specific KPIs and SLAs within this contract is vital for assessing performance and value. These metrics should align with ensuring fleet readiness and operational availability, providing a basis for evaluating Rolls-Royce's effectiveness and justifying the expenditure.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rolls-Royce Holdings PLC

Address: 450 S MERIDIAN ST, INDIANAPOLIS, IN, 46225

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

Financial Breakdown

Contract Ceiling: $179,680,267

Exercised Options: $179,680,267

Current Obligation: $179,680,267

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $6,022,840

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA850417D0002

IDV Type: IDC

Timeline