Air Force awards $21.8M for F110 engine parts, with limited competition impacting price discovery
Contract Overview
Contract Amount: $21,819,163 ($21.8M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-12-22
End Date: 2024-08-30
Contract Duration: 617 days
Daily Burn Rate: $35.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FMS F110 COMPONENT SPARES CONSUMABLES
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $21.8 million to GENERAL ELECTRIC COMPANY for work described as: FMS F110 COMPONENT SPARES CONSUMABLES Key points: 1. Value for money is difficult to assess due to limited competition and lack of detailed cost breakdowns. 2. Competition dynamics show a sole-source award, raising concerns about potential price inflation. 3. Risk indicators include the sole-source nature and the long duration of the contract. 4. Performance context is tied to maintaining critical aircraft engine components for the Air Force. 5. Sector positioning is within the aircraft engine manufacturing and parts industry.
Value Assessment
Rating: questionable
Benchmarking the value for money is challenging given the sole-source nature of this award and the absence of competitive bids. The contract's fixed-price structure provides some cost certainty, but without comparative pricing data, it's difficult to determine if the $21.8 million represents a fair market value. The duration of the contract also extends the period over which these prices will apply, increasing the potential for overpayment if market conditions change.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when only one source is capable of fulfilling the requirement, or in cases of urgent need. The lack of multiple bidders limits the government's ability to leverage competition to drive down prices and ensure the most cost-effective solution.
Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure, as the contractor faces less incentive to offer the lowest possible price.
Public Impact
The primary beneficiaries are the U.S. Air Force, ensuring the operational readiness of aircraft equipped with F110 engines. Services delivered include the provision of essential spare parts and consumables for aircraft engine maintenance. Geographic impact is primarily within Ohio, where General Electric Company is located, but the ultimate impact is on Air Force readiness nationwide. Workforce implications include supporting jobs in aircraft engine manufacturing and maintenance within the contractor's facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Long contract duration increases exposure to potential price increases.
- Lack of detailed cost data hinders value assessment.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Award supports critical defense readiness.
- Contractor is an established engine manufacturer.
Sector Analysis
The aircraft engine and engine parts manufacturing sector is a critical component of the aerospace and defense industry. This contract falls within NAICS code 336412. The market is characterized by high barriers to entry due to specialized technology, significant R&D investment, and stringent regulatory requirements. Major players like General Electric Company dominate, often leading to limited competition for specific engine components and support services.
Small Business Impact
This contract does not appear to have a small business set-aside. Given the sole-source nature and the specialized products involved, it is unlikely that significant subcontracting opportunities would be directed towards small businesses unless explicitly mandated or if the prime contractor voluntarily engages them for specific components or services.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which shifts some risk to the contractor. Transparency is limited due to the sole-source award and the proprietary nature of engine components. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- F110 Engine Support Contracts
- Aircraft Engine Spare Parts Procurement
- Department of Defense Aviation Maintenance
- Air Force Logistics and Sustainment
Risk Flags
- Sole-source award
- Lack of competitive pricing data
- Long contract duration
Tags
defense, department-of-defense, department-of-the-air-force, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, consumables, spares, ohio, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.8 million to GENERAL ELECTRIC COMPANY. FMS F110 COMPONENT SPARES CONSUMABLES
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 $21.8 million.
What is the period of performance?
Start: 2022-12-22. End: 2024-08-30.
What is the historical spending trend for F110 engine components and consumables by the Department of Defense?
Analyzing historical spending on F110 engine components and consumables by the Department of Defense is crucial for understanding the long-term investment in this platform. While specific data for this exact contract is limited, general trends indicate consistent and substantial spending on engine sustainment across various military branches. Factors influencing this spending include the operational tempo of aircraft fleets, the age of the engines, and the introduction of new technologies or upgrades. Without access to detailed historical contract databases or specific program reports, it's challenging to provide precise figures. However, it's reasonable to infer that annual spending likely fluctuates based on maintenance cycles, fleet size, and any unforeseen operational demands or component failures. The $21.8 million awarded here represents a portion of this ongoing sustainment effort, highlighting the continuous need for parts and consumables to maintain fleet readiness.
How does the pricing of this contract compare to similar sole-source awards for aircraft engine parts?
Directly comparing the pricing of this sole-source contract to similar awards is difficult without access to proprietary pricing data and detailed specifications of the components being procured. Sole-source awards inherently lack the competitive benchmarking that would allow for a robust price-to-price comparison. However, general industry knowledge suggests that aircraft engine components, especially those for high-performance military engines like the F110, are complex and expensive to manufacture. Pricing is influenced by factors such as material costs, advanced manufacturing processes, rigorous quality control, and the specialized expertise required. When comparing to other sole-source contracts, one would look for similarities in the type of components (e.g., critical rotating parts, specialized seals, electronic control units), the engine model, and the contract duration. Any significant deviation from established price ranges for comparable sole-source procurements could indicate potential overpricing, though definitive conclusions require more granular data.
What are the primary risks associated with a sole-source award for critical aircraft engine components?
The primary risks associated with a sole-source award for critical aircraft engine components are multifaceted. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from the cost-saving pressures that multiple bidders would typically exert. This can result in a higher overall cost to the taxpayer. Secondly, there's a reduced incentive for the sole-source provider to innovate or improve efficiency, as they face no direct competitive threat. Thirdly, dependence on a single supplier creates supply chain vulnerability; any disruption at the contractor's facility, such as production issues, labor disputes, or geopolitical events, could directly impact the availability of critical parts and, consequently, aircraft readiness. Finally, the government has less leverage in negotiating terms and conditions, potentially leading to less favorable contract clauses regarding delivery schedules, warranties, or intellectual property.
What is the expected impact of this contract on the operational readiness of the U.S. Air Force's F110-equipped aircraft?
This contract is expected to have a positive impact on the operational readiness of the U.S. Air Force's F110-equipped aircraft by ensuring the availability of necessary spare parts and consumables. The F110 engine powers several key Air Force platforms, and maintaining these engines is critical for mission capability. By securing a supply of these components, the Air Force can perform scheduled maintenance, address unexpected component failures, and minimize aircraft downtime. The firm fixed-price nature of the contract provides a degree of predictability in budgeting for these sustainment activities. Ultimately, the timely delivery of these parts directly contributes to the Air Force's ability to deploy and sustain its combat airpower, fulfilling its operational requirements.
Are there any performance metrics or key performance indicators (KPIs) associated with this contract to ensure contractor performance?
While the provided data does not explicitly detail performance metrics or Key Performance Indicators (KPIs) for this specific contract, firm fixed-price contracts generally rely on the contractor's adherence to delivery schedules and product specifications as primary performance indicators. For critical components like aircraft engine parts, performance is implicitly measured by the quality and reliability of the delivered items, which should meet stringent military specifications. The Air Force likely monitors delivery timeliness and the absence of defects. Furthermore, contract clauses may include provisions for remedies in case of non-performance, such as penalties for late delivery or requirements for replacement of defective parts. Detailed performance evaluations would typically be documented within the government's contract management system, influencing future procurement decisions.
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
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, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $27,251,384
Exercised Options: $27,251,384
Current Obligation: $21,819,163
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA812223D0002
IDV Type: IDC
Timeline
Start Date: 2022-12-22
Current End Date: 2024-08-30
Potential End Date: 2024-08-30 00:00:00
Last Modified: 2025-09-17
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