DoD awards $39.5M for Egyptian Air Force engine kits, raising questions on competition and value
Contract Overview
Contract Amount: $39,522,598 ($39.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2017-09-20
End Date: 2017-12-29
Contract Duration: 100 days
Daily Burn Rate: $395.2K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: SERVICE LIFE EXTENSION PROGRAM (SLEP) KITS FOR EGYPTIAN AIR FORCE
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $39.5 million to GENERAL ELECTRIC COMPANY for work described as: SERVICE LIFE EXTENSION PROGRAM (SLEP) KITS FOR EGYPTIAN AIR FORCE Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Limited competition raises concerns about achieving best value for taxpayer funds. 3. The contract's short duration and specific nature may indicate a niche requirement. 4. Performance context is limited due to the lack of competitive bidding. 5. Sector positioning within aircraft engine parts manufacturing is noted, but specific market dynamics are unclear. 6. The absence of small business involvement is a missed opportunity for economic inclusion.
Value Assessment
Rating: questionable
The contract value of $39.5 million for Service Life Extension Program (SLEP) kits for the Egyptian Air Force appears high given the short delivery period of approximately three months. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The sole-source nature prevents an assessment of whether the government secured the best possible price and value. Further analysis would be needed to determine if the awarded price reflects fair and reasonable costs for the specified kits and services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. The data indicates the contract type was 'NOT AVAILABLE FOR COMPETITION'. This lack of competition means that only one vendor, General Electric Company, was considered. Consequently, there were no other bidders to drive down prices through a competitive process, and the government did not have the opportunity to evaluate multiple proposals to ensure the best value was obtained.
Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure lower prices, potentially leading to higher costs for taxpayers. Without a competitive process, there is less assurance that the awarded price is the most economical option available.
Public Impact
The primary beneficiary of this contract is the Egyptian Air Force, receiving critical components for their aircraft. The services delivered involve the provision of Service Life Extension Program (SLEP) kits for aircraft engines. The geographic impact is primarily focused on supporting a foreign military partner's aviation assets. Workforce implications are likely concentrated within General Electric Company's manufacturing and logistics operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and value assessment.
- Lack of transparency in the procurement process due to no-bid award.
- Potential for inflated costs without competitive pressure.
- No small business participation noted, missing economic development opportunities.
Positive Signals
- Supports a key foreign military partner's operational readiness.
- Procurement of specialized kits for aircraft engine maintenance.
- Awarded to a known manufacturer with likely relevant expertise.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a specialized segment of the aerospace industry. The market for military aircraft components, particularly for foreign military sales, is often characterized by limited suppliers due to technical expertise and security requirements. Benchmarking spending in this area is challenging without more data on comparable international sales and specific kit configurations. The value of this contract, while substantial, represents a specific procurement rather than broad sector spending.
Small Business Impact
This contract did not involve any small business set-asides, nor is there any indication of subcontracting opportunities for small businesses. The sole-source nature of the award to a large prime contractor like General Electric Company means that the direct benefits and potential for small business participation are minimal in this specific transaction. This represents a missed opportunity to engage the small business industrial base in supporting foreign military sales.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management regulations. As a foreign military sale, there may be additional oversight from relevant defense security cooperation agencies. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract execution.
Related Government Programs
- Foreign Military Sales Program
- Aircraft Engine Maintenance and Repair
- Defense Logistics Agency (DLA) Support
- Aerospace Parts Manufacturing
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Limited transparency
- Potential for overpricing
Tags
defense, department-of-defense, department-of-the-air-force, aircraft-engine-and-engine-parts-manufacturing, sole-source, foreign-military-sale, firm-fixed-price, delivery-order, general-electric-company, egyptian-air-force, service-life-extension-program
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $39.5 million to GENERAL ELECTRIC COMPANY. SERVICE LIFE EXTENSION PROGRAM (SLEP) KITS FOR 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 $39.5 million.
What is the period of performance?
Start: 2017-09-20. End: 2017-12-29.
What is the specific type of aircraft engine these SLEP kits are intended for, and what is the operational significance for the Egyptian Air Force?
The provided data does not specify the exact aircraft or engine model for which the Service Life Extension Program (SLEP) kits are intended. However, SLEP programs are crucial for extending the operational lifespan of aging aircraft engines, thereby enhancing their reliability, performance, and safety. For the Egyptian Air Force, these kits likely support a critical component of their fleet, ensuring continued operational readiness and potentially delaying the need for costly new aircraft acquisitions. The significance lies in maintaining the airworthiness and combat capability of their existing air assets through proactive maintenance and upgrades.
Can the $39.5 million contract value be benchmarked against similar sole-source awards for engine kits to other foreign partners?
Benchmarking this $39.5 million sole-source award against similar contracts is challenging without access to a broader dataset of foreign military sales for comparable engine kits. Sole-source procurements inherently lack the price transparency provided by competitive bidding, making direct comparisons difficult. Factors such as the specific engine model, the number of kits procured, the scope of included components, and the urgency of the requirement can significantly influence pricing. While General Electric Company is a major supplier, the absence of competitive bids means this price cannot be definitively assessed as high or low relative to market alternatives without further, more detailed comparative data on similar international defense procurements.
What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis, particularly for foreign military sales?
Awarding a contract of this magnitude ($39.5 million) on a sole-source basis for foreign military sales carries several risks. Primarily, there is a significant risk of overpayment, as the lack of competition prevents the government from obtaining the best possible price through a bidding process. This can lead to inefficient use of taxpayer funds, even if the funds are ultimately for a foreign partner. Another risk is the potential for a lack of urgency or innovation from the sole provider, as they face no competitive pressure to deliver efficiently or improve their offering. Furthermore, sole-source awards can create dependency on a single supplier, potentially limiting future options and flexibility. For foreign military sales, ensuring fair pricing and value is crucial for maintaining strong international partnerships and upholding U.S. foreign policy objectives.
Given the short contract duration (delivery order ending Dec 2017 from a Sep 2017 award), what does this imply about the urgency or nature of the requirement?
The very short contract duration, with an award in late September 2017 and a delivery end date in late December 2017 (approximately three months), strongly suggests a requirement for immediate or urgent fulfillment. This could indicate a critical operational need for the Egyptian Air Force, perhaps to address an unexpected maintenance issue, a sudden deployment, or to meet a specific, time-sensitive training or operational window. Alternatively, it might represent the final delivery order under a larger, pre-existing contract or agreement that is not fully detailed in this data snippet. The urgency implied by such a short timeframe can sometimes be a justification for sole-source awards, though it does not inherently guarantee fair pricing.
What is General Electric Company's track record with the Department of Defense, particularly concerning aircraft engine components and foreign military sales?
General Electric Company (GE) has a long-standing and extensive track record as a major contractor for the Department of Defense (DoD), particularly in the realm of aircraft engines and related components. GE is a primary supplier for numerous U.S. military aircraft platforms, including fighter jets, bombers, and transport planes. Their involvement in foreign military sales (FMS) is also substantial, as they provide engines and support packages to allied nations through U.S. government channels. Given their established position and the specialized nature of aerospace technology, GE is often a sole-source or prime contractor for specific engine types. While this expertise is valuable, it also means that many procurements, especially for unique or proprietary components like SLEP kits, may be sole-sourced due to the lack of alternative qualified suppliers.
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
Solicitation ID: FA812216R0015
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: $39,522,598
Exercised Options: $39,522,598
Current Obligation: $39,522,598
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA812214G0001
IDV Type: BOA
Timeline
Start Date: 2017-09-20
Current End Date: 2017-12-29
Potential End Date: 2017-12-29 00:00:00
Last Modified: 2017-10-26
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