Navy Awards $847M for AE1107C Turboshaft Engines to Rolls-Royce Corporation
Contract Overview
Contract Amount: $847,098,884 ($847.1M)
Contractor: Rolls-Royce Corporation
Awarding Agency: Department of Defense
Start Date: 2007-09-25
End Date: 2012-12-31
Contract Duration: 1,924 days
Daily Burn Rate: $440.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THIS CONTRACT IS FOR THE PROCUREMENT OF AE1107C TURBOSHAFT ENGINES (INSTALLS AND SPARES).
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $847.1 million to ROLLS-ROYCE CORPORATION for work described as: THIS CONTRACT IS FOR THE PROCUREMENT OF AE1107C TURBOSHAFT ENGINES (INSTALLS AND SPARES). Key points: 1. Significant investment in critical aircraft engine components. 2. Rolls-Royce Corporation is a major player in the aerospace engine market. 3. Potential for long-term sustainment and spare parts needs. 4. Sector focus on aircraft engine manufacturing.
Value Assessment
Rating: good
The contract value of $847 million for turboshaft engines appears substantial. Benchmarking against similar large-scale engine procurements would be necessary for a precise pricing assessment, but the firm-fixed-price structure suggests a defined cost expectation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders likely participated. This competitive process is expected to drive price discovery and ensure fair market value for the engines.
Taxpayer Impact: Taxpayers benefit from competitive bidding, which aims to secure the best possible price for these critical defense assets.
Public Impact
Ensures operational readiness for naval aviation platforms requiring these specific engines. Supports the aerospace manufacturing sector and associated jobs. Provides essential components for national defense capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 5 years) may lead to price escalation risks.
- Dependence on a single supplier for critical spares could pose supply chain risks.
Positive Signals
- Awarded through full and open competition.
- Firm-fixed-price contract type provides cost certainty.
- Significant investment in advanced engine technology.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a specialized and capital-intensive industry. Spending in this area is crucial for maintaining military aviation capabilities and reflects the high cost of advanced aerospace technology.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as Rolls-Royce Corporation is a large aerospace manufacturer. There is no specific indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The Department of the Navy, under the Department of Defense, is responsible for oversight. The firm-fixed-price contract type and the competitive award process suggest a degree of accountability in cost and performance.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Long-term sustainment costs.
- Potential for sole-source spare parts in the future.
- Technological obsolescence risk over the contract duration.
- Dependence on a single prime contractor for critical components.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, in, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $847.1 million to ROLLS-ROYCE CORPORATION. THIS CONTRACT IS FOR THE PROCUREMENT OF AE1107C TURBOSHAFT ENGINES (INSTALLS AND SPARES).
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 Navy).
What is the total obligated amount?
The obligated amount is $847.1 million.
What is the period of performance?
Start: 2007-09-25. End: 2012-12-31.
What is the projected lifecycle cost of these engines, including maintenance and spare parts, over their operational lifespan?
The lifecycle cost is a critical consideration beyond the initial procurement value. It encompasses sustainment, spare parts, overhauls, and potential upgrades. A comprehensive analysis would require projections for fuel efficiency, maintenance intervals, and the availability and cost of spare parts over the engines' expected service life.
What are the specific performance metrics and reliability data for the AE1107C turboshaft engines that were evaluated during the competition?
Performance metrics and reliability data are crucial for assessing the technical suitability and long-term effectiveness of the engines. This would include factors like thrust output, fuel consumption, mean time between failures (MTBF), and operational endurance under various conditions. The evaluation of these factors during the competitive process would determine the best value for the Navy.
How does the per-unit cost of these engines compare to similar turboshaft engines procured by other military branches or allied nations?
Benchmarking the per-unit cost against comparable engines is essential for validating value for money. This comparison should account for differences in engine specifications, performance capabilities, contract terms (e.g., quantity, delivery schedule), and the prevailing market conditions at the time of procurement for each contract.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0001906R0045
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, 46241
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $911,842,858
Exercised Options: $847,861,880
Current Obligation: $847,098,884
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2007-09-25
Current End Date: 2012-12-31
Potential End Date: 2012-12-31 00:00:00
Last Modified: 2018-01-19
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