DoD awards $31.5M to General Electric for Field Service Reps, raising cost concerns
Contract Overview
Contract Amount: $31,490,435 ($31.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2008-10-01
End Date: 2012-09-30
Contract Duration: 1,460 days
Daily Burn Rate: $21.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: FIELD SERVICE REPRESENTATIVES- BEALE/PALMDALE
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $31.5 million to GENERAL ELECTRIC COMPANY for work described as: FIELD SERVICE REPRESENTATIVES- BEALE/PALMDALE Key points: 1. High contract value ($31.5M) for specialized engineering services. 2. Sole-source award to General Electric limits competitive pricing. 3. Long contract duration (4 years) may obscure current market rates. 4. Engineering services sector often sees significant cost variations.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes it difficult to benchmark against similar services. The awarded amount of $31.5M over four years suggests a potentially high per-unit cost, especially given the absence of competitive pressure.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Electric. This significantly limits price discovery and potentially leads to higher costs for the government compared to a fully competed scenario.
Taxpayer Impact: The lack of competition in this sole-source award likely results in taxpayers paying a premium for these engineering services.
Public Impact
Taxpayers may be overpaying due to the sole-source nature of the contract. The long duration could mean the services are no longer priced at market value. Dependence on a single contractor for critical field services poses a risk. Lack of transparency in pricing due to non-competitive award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of competition
Positive Signals
- Essential service provision
- Experienced contractor
Sector Analysis
This contract falls within the Engineering Services sector, which is characterized by specialized expertise and often high costs. Benchmarking can be challenging due to the unique nature of many engineering contracts and the specific requirements of the Department of Defense.
Small Business Impact
The contract was awarded to General Electric Company, a large business. There is no indication of small business participation in this specific award, suggesting missed opportunities for small business engagement.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure fair pricing and necessity. The Defense Contract Management Agency's role is crucial in monitoring performance and costs, even in non-competed contracts.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for overpayment due to sole-source award.
- Lack of competitive bidding limits price discovery.
- Cost-plus contract type shifts cost overrun risk to the government.
- Long contract duration may lead to outdated pricing.
- No small business participation noted.
Tags
engineering-services, department-of-defense, oh, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.5 million to GENERAL ELECTRIC COMPANY. FIELD SERVICE REPRESENTATIVES- BEALE/PALMDALE
Who is the contractor on this award?
The obligated recipient is GENERAL ELECTRIC COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $31.5 million.
What is the period of performance?
Start: 2008-10-01. End: 2012-09-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative solutions explored?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without further details on the specific justification, it's difficult to assess if alternative solutions were adequately explored or if competition was genuinely impossible.
How does the cost-plus-fixed-fee structure impact the government's ability to control costs, especially in a sole-source scenario?
Cost-plus-fixed-fee contracts reimburse the contractor for allowable costs plus a predetermined fixed fee. While the fee is fixed, the government bears the risk of cost overruns. In a sole-source situation, this structure can be particularly concerning as there's less incentive for the contractor to control costs rigorously without competitive pressure.
What mechanisms are in place to ensure the value received for $31.5M in engineering services over four years aligns with current market rates?
Given the sole-source and cost-plus nature, standard market rate comparisons are difficult. Oversight should focus on detailed cost audits, performance metrics, and ensuring the fixed fee remains reasonable. Periodic reviews of the contract's necessity and scope are also vital to prevent scope creep and ensure continued value.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
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
Financial Breakdown
Contract Ceiling: $52,521,792
Exercised Options: $33,827,896
Current Obligation: $31,490,435
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-10-01
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 00:00:00
Last Modified: 2016-07-26
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