DoD Awards $248M Rolls-Royce Contract for AE1107C Engine Sustainment
Contract Overview
Contract Amount: $248,300,341 ($248.3M)
Contractor: Rolls-Royce Corporation
Awarding Agency: Department of Defense
Start Date: 2024-12-01
End Date: 2025-11-30
Contract Duration: 364 days
Daily Burn Rate: $682.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AE1107C ENGINE SUST. SUPPORT
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $248.3 million to ROLLS-ROYCE CORPORATION for work described as: AE1107C ENGINE SUST. SUPPORT Key points: 1. Significant contract value for aircraft engine sustainment. 2. Sole-source award to Rolls-Royce Corporation raises competition concerns. 3. Potential risk associated with single-vendor reliance for critical engine parts. 4. Spending falls within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $248.3M for a 364-day period appears substantial. Without comparable contract data for similar engine sustainment services, it's difficult to definitively assess pricing efficiency. Benchmarking against industry standards for engine maintenance and parts is recommended.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of full and open competition. This method limits price discovery and may result in higher costs for the government compared to a competitive procurement.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.
Public Impact
Ensures continued operational readiness for Navy aircraft relying on AE1107C engines. Supports critical defense infrastructure and national security. Impacts the aerospace and defense manufacturing sector, specifically engine support services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition
- Potential for price escalation without competition
- Reliance on a single supplier for critical parts
Positive Signals
- Ensures sustainment of critical aircraft engines
- Supports operational readiness of the Navy
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the aerospace and defense industry. Spending in this area is often characterized by high R&D costs and specialized manufacturing capabilities, leading to fewer potential suppliers.
Small Business Impact
The awardee, Rolls-Royce Corporation, is a large business. There is no indication in the provided data that small businesses were involved in this specific contract, either as prime contractors or subcontractors.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and performance. The Department of the Navy should actively monitor contract execution and explore opportunities for future competition where feasible.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Potential for inflated pricing
- Vendor lock-in
- Supply chain dependency
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, in, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $248.3 million to ROLLS-ROYCE CORPORATION. AE1107C ENGINE SUST. SUPPORT
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 $248.3 million.
What is the period of performance?
Start: 2024-12-01. End: 2025-11-30.
What is the justification for the sole-source award, and have alternatives been thoroughly explored?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of other responsible sources. For this contract, the specific reason for not competing needs to be documented by the Department of the Navy. Thorough exploration of alternatives, including potential for future competition or alternative solutions, is crucial for ensuring long-term cost-effectiveness and avoiding vendor lock-in.
How does the per-unit cost of engine parts and services compare to industry benchmarks for similar sustainment contracts?
Benchmarking the per-unit cost against industry standards is essential for evaluating the value of this $248.3M contract. Without access to specific part costs or service rates, a direct comparison is not possible. The government should conduct a thorough cost analysis, referencing data from similar sustainment contracts for comparable engine types and service levels to identify any potential overpricing.
What are the long-term implications of relying on a single supplier for critical engine sustainment, particularly regarding technological advancements and supply chain resilience?
Long-term reliance on a single supplier can stifle innovation and create vulnerabilities in the supply chain. Rolls-Royce may have less incentive to invest in next-generation technologies if competition is absent. Furthermore, disruptions to the supplier's operations or geopolitical factors could significantly impact the availability of critical engine parts and services, affecting fleet readiness.
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
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, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $248,300,341
Exercised Options: $248,300,341
Current Obligation: $248,300,341
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $774,151
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001925D0002
IDV Type: IDC
Timeline
Start Date: 2024-12-01
Current End Date: 2025-11-30
Potential End Date: 2025-11-30 00:00:00
Last Modified: 2025-11-25
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