Navy Awards $222M Rolls-Royce Contract for 36 MT7 Turboshaft Engines for LCAC 100 Craft
Contract Overview
Contract Amount: $222,098,104 ($222.1M)
Contractor: Rolls-Royce Corporation
Awarding Agency: Department of Defense
Start Date: 2025-02-07
End Date: 2029-06-30
Contract Duration: 1,604 days
Daily Burn Rate: $138.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 36 MT7 TURBOSHAFT PRODUCTION ENGINES, PRODUCTION ENGINE ANCILLARY PARTS KITS, AND INSTALLATION KITS TO LCAC 100 CLASS CRAFT. 4 MT7 TURBOSHAFT SPARE ENGINES, SPARE ANCILLARY PARTS KITS, REPAIR OF PORTABLE TEST TOOL, AND COMPONENT STORAGE.
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46225
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $222.1 million to ROLLS-ROYCE CORPORATION for work described as: 36 MT7 TURBOSHAFT PRODUCTION ENGINES, PRODUCTION ENGINE ANCILLARY PARTS KITS, AND INSTALLATION KITS TO LCAC 100 CLASS CRAFT. 4 MT7 TURBOSHAFT SPARE ENGINES, SPARE ANCILLARY PARTS KITS, REPAIR OF PORTABLE TEST TOOL, AND COMPONENT STORAGE. Key points: 1. Contract awarded to Rolls-Royce Corporation for critical turboshaft engines and parts. 2. Significant investment in naval aviation sustainment and modernization. 3. Sole-source award raises questions about competition and potential cost savings. 4. Spending falls within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: fair
The contract value of $222,009,810 for 36 engines and associated parts appears high, especially given the sole-source nature. Benchmarking against similar sole-source engine procurements would be necessary to assess true value.
Cost Per Unit: $6,169,408
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to Rolls-Royce Corporation. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for this significant procurement could lead to higher taxpayer costs due to the absence of market pressure on pricing.
Public Impact
Ensures operational readiness of the LCAC 100 class craft. Supports advanced naval capabilities and defense readiness. Potential for increased costs due to sole-source award. Impacts the specialized market for high-performance turboshaft engines.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- High per-unit cost.
- Long contract duration.
Positive Signals
- Supports critical defense asset.
- Procurement of advanced engine technology.
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, a specialized area often dominated by a few key players. Spending benchmarks for similar sole-source procurements of advanced turboshaft engines are crucial for evaluating this award.
Small Business Impact
The data indicates no specific provisions for small business participation in this contract. Given the specialized nature of turboshaft engine production, it is unlikely that small businesses would be primary contractors, though they might be involved as subcontractors.
Oversight & Accountability
The Department of the Navy is the awarding agency. Oversight will be critical to ensure Rolls-Royce Corporation meets delivery schedules and performance specifications, especially given the sole-source nature and long duration of the contract.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- High per-unit cost requires further justification.
- Potential for cost overruns if sustainment needs are underestimated.
- Long contract duration increases exposure to market fluctuations.
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 $222.1 million to ROLLS-ROYCE CORPORATION. 36 MT7 TURBOSHAFT PRODUCTION ENGINES, PRODUCTION ENGINE ANCILLARY PARTS KITS, AND INSTALLATION KITS TO LCAC 100 CLASS CRAFT. 4 MT7 TURBOSHAFT SPARE ENGINES, SPARE ANCILLARY PARTS KITS, REPAIR OF PORTABLE TEST TOOL, AND COMPONENT STORAGE.
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 $222.1 million.
What is the period of performance?
Start: 2025-02-07. End: 2029-06-30.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing without competition?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or lack of viable alternatives. The Department of the Navy would need to provide documentation demonstrating these factors. Without competition, ensuring fair and reasonable pricing relies heavily on robust cost analysis, historical pricing data, and potentially independent government cost estimates.
How does the per-unit cost of these MT7 turboshaft engines compare to similar engines procured competitively or through other sole-source contracts?
The per-unit cost of approximately $6.17 million is substantial. A comprehensive comparison would involve analyzing the specific technical requirements, performance characteristics, and support packages of comparable engines. If other sole-source awards for similar engines are significantly lower, it raises concerns about the pricing of this specific contract.
What is the long-term strategy for maintaining and supporting these engines, and does this contract adequately address sustainment costs?
The contract includes spare engines, parts kits, and repair services, indicating a focus on initial sustainment. However, the long-term strategy and associated costs for the entire lifecycle of these engines need careful evaluation. The firm-fixed-price nature helps control immediate costs, but potential future sustainment needs and upgrades should be considered in the overall value assessment.
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
Solicitation ID: N0002424R2460
Offers Received: 1
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: $222,438,765
Exercised Options: $222,098,104
Current Obligation: $222,098,104
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2025-02-07
Current End Date: 2029-06-30
Potential End Date: 2029-06-30 00:00:00
Last Modified: 2025-12-10
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