DoD's $34.6M contract for Egyptian Air Force SLEP kits awarded to General Electric
Contract Overview
Contract Amount: $34,653,620 ($34.7M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2016-07-22
End Date: 2016-12-30
Contract Duration: 161 days
Daily Burn Rate: $215.2K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: SLEP KITS FOR THE EGYPTIAN AIR FORCE
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $34.7 million to GENERAL ELECTRIC COMPANY for work described as: SLEP KITS FOR THE EGYPTIAN AIR FORCE Key points: 1. Contract awarded to a single, established supplier, raising questions about competitive pricing. 2. The contract's value is significant, necessitating careful review of cost-effectiveness. 3. Limited competition suggests potential for higher prices than a fully competed scenario. 4. Performance period is relatively short, indicating a focused scope of work. 5. The contract falls within the defense sector's aircraft engine maintenance and parts manufacturing. 6. No small business set-aside was applied, suggesting larger prime contractor involvement.
Value Assessment
Rating: fair
The contract value of $34.6 million for SLEP kits is substantial. Without comparable contract data or detailed cost breakdowns, it's difficult to definitively assess value for money. Given the sole-source nature, benchmarking against market rates for similar engine overhaul kits or parts would be crucial. The fixed-price structure offers some cost certainty, but the lack of competition limits the government's ability to negotiate the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, General Electric Company, was solicited. This approach is typically used when a specific product or service is only available from a single source, or in cases of urgent need. The lack of competition means there was no opportunity for multiple bidders to offer proposals, which can limit price discovery and potentially lead to higher costs for the government.
Taxpayer Impact: For taxpayers, a sole-source award means the absence of competitive pressure that could drive down prices. This necessitates a higher degree of scrutiny on the awarded price to ensure it is fair and reasonable.
Public Impact
The primary beneficiaries are the Egyptian Air Force, receiving critical engine upgrade kits. The contract supports the sustainment and operational readiness of Egyptian Air Force aircraft. The geographic impact is primarily international, supporting a foreign military sales agreement. Workforce implications are likely concentrated within General Electric's manufacturing and support facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential cost savings for taxpayers.
- Lack of transparency in pricing due to non-competitive nature.
- Dependence on a single contractor for critical aircraft components.
Positive Signals
- Award to a known entity (General Electric) with established expertise in aircraft engines.
- Firm fixed-price contract provides cost certainty for the awarded scope.
- Supports foreign military sales objectives, strengthening international partnerships.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft engine components and sustainment. The market for specialized engine overhaul kits is often dominated by original equipment manufacturers like General Electric due to proprietary technology and intellectual property. Spending in this area is critical for maintaining the operational readiness of military fleets globally. Comparable spending benchmarks would typically involve other foreign military sales of similar engine upgrade programs.
Small Business Impact
This contract does not appear to have a small business set-aside. The award to General Electric Company, a large prime contractor, suggests that small businesses are unlikely to be directly involved as prime recipients. Subcontracting opportunities for small businesses may exist, but this would depend on General Electric's procurement practices and the specific components or services required.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight mechanisms. As it is part of a foreign military sale, there may be additional oversight from agencies involved in international security cooperation. Transparency is limited due to the sole-source nature, but contract modifications and payment milestones would be subject to standard DoD financial controls.
Related Government Programs
- Foreign Military Sales (FMS)
- Aircraft Engine Maintenance
- Defense Logistics Agency (DLA) Contracts
- Air Force Sustainment Programs
Risk Flags
- Sole-source award
- Potential for uncompetitive pricing
- Lack of transparency in cost build-up
Tags
defense, department-of-defense, department-of-the-air-force, general-electric-company, sole-source, firm-fixed-price, foreign-military-sales, aircraft-engine-and-engine-parts-manufacturing, ohio, delivery-order, sustainment, engine-kits
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.7 million to GENERAL ELECTRIC COMPANY. SLEP KITS FOR THE EGYPTIAN AIR FORCE
Who is the contractor on this award?
The obligated recipient is GENERAL ELECTRIC COMPANY.
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 $34.7 million.
What is the period of performance?
Start: 2016-07-22. End: 2016-12-30.
What is the specific type of SLEP kit being provided, and what aircraft model does it support?
The provided data indicates the contract is for 'SLEP KITS FOR THE EGYPTIAN AIR FORCE' with the contractor being 'GENERAL ELECTRIC COMPANY'. SLEP typically stands for 'Sustainment, Engineering, and Logistics Program' or similar, often referring to upgrades or overhauls designed to extend the service life of aircraft engines. While the specific aircraft model is not explicitly stated in the abbreviated data, General Electric is a major manufacturer of jet engines for various military aircraft. Further investigation into the contract details or associated documentation would be required to identify the precise engine type and the aircraft it powers, such as F-16s, F-15s, or other platforms operated by the Egyptian Air Force.
How does the $34.6 million contract value compare to historical spending on similar SLEP kits for foreign partners?
Comparing the $34.6 million contract value requires access to historical data on similar Foreign Military Sales (FMS) involving SLEP kits for aircraft engines. General Electric produces engines for a wide range of military aircraft. Without specific details on the engine type and the scope of the SLEP (e.g., number of kits, level of overhaul), a direct comparison is challenging. However, major engine overhauls and life-extension programs can range from hundreds of thousands to millions of dollars per engine, depending on complexity and components. This $34.6 million likely covers a significant number of kits or a comprehensive overhaul package for a fleet. Benchmarking would involve looking at other FMS cases for engine sustainment programs managed by the Department of Defense for comparable aircraft types and engine manufacturers.
What are the specific risks associated with a sole-source award for critical aircraft engine components?
A sole-source award for critical aircraft engine components, such as SLEP kits, presents several risks. Firstly, the primary risk is the potential for inflated pricing due to the lack of competitive bidding. The government may end up paying more than it would in a competitive environment. Secondly, there's a risk of reduced innovation and service quality, as the sole contractor faces less pressure to improve their offerings. Thirdly, it can create vendor lock-in, making it difficult and costly to switch to alternative suppliers in the future. Finally, sole-source contracts can sometimes indicate a lack of adequate market research or planning by the procuring agency, potentially leading to suboptimal contract terms.
What is General Electric's track record in fulfilling defense contracts, particularly for foreign military sales?
General Electric (GE) has a long and extensive track record of fulfilling defense contracts, both domestically and internationally, including numerous Foreign Military Sales (FMS). As a major global manufacturer of jet engines and related systems, GE is a critical supplier to many armed forces worldwide. Their experience spans decades, covering the production, maintenance, and upgrade of engines for a wide array of military aircraft. While specific performance metrics for every contract are not publicly available, GE is generally considered a reliable supplier within the defense industrial base. However, like any large contractor, they may have faced contract disputes or performance issues on specific programs, which would typically be documented in contract performance databases and agency reports.
What oversight mechanisms are in place to ensure the quality and timely delivery of these SLEP kits?
Oversight for defense contracts, including FMS cases like this one, involves multiple layers. The Department of Defense (DoD) employs contracting officers and program managers responsible for monitoring contract performance, ensuring adherence to specifications, and managing delivery schedules. Quality assurance representatives (QARs) are often assigned to oversee the manufacturing process and inspect the final product. For FMS cases, the Defense Contract Management Agency (DCMA) typically plays a significant role in oversight. Additionally, the purchasing country (Egypt, in this case) often has its own representatives involved in quality checks and acceptance testing. Inspector General offices within the DoD also provide an independent layer of oversight to detect fraud, waste, and abuse.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 NEUMANN WAY, CINCINNATI, OH, 45215
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $42,362,166
Exercised Options: $41,077,408
Current Obligation: $34,653,620
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: FA812214G0001
IDV Type: BOA
Timeline
Start Date: 2016-07-22
Current End Date: 2016-12-30
Potential End Date: 2016-12-30 00:00:00
Last Modified: 2017-05-04
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