DoD's $26M R&D contract to General Electric for unspecified physical sciences research shows concerning value and limited competition
Contract Overview
Contract Amount: $25,966,032 ($26.0M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2016-12-22
End Date: 2021-12-31
Contract Duration: 1,835 days
Daily Burn Rate: $14.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF CIP 2017
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $26.0 million to GENERAL ELECTRIC COMPANY for work described as: IGF::OT::IGF CIP 2017 Key points: 1. The contract's value proposition is unclear due to the lack of specific deliverables and performance metrics. 2. Limited competition raises concerns about potential overpricing and reduced innovation. 3. The 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code is broad, obscuring the specific nature of the work. 4. The contract's duration of over five years suggests a long-term commitment with potentially evolving requirements. 5. The absence of small business set-asides or subcontracting plans may limit broader economic impact. 6. The cost-plus-fixed-fee contract type can incentivize cost overruns if not closely monitored.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to the broad NAICS code and the lack of specific performance details. Without clear deliverables or milestones, it's difficult to assess if the $26 million allocated represents a fair price for the research conducted. Comparing it to similar R&D contracts in physical sciences is hampered by the vagueness of the work description. The cost-plus-fixed-fee structure, while common in R&D, requires rigorous oversight to ensure cost efficiency.
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 significantly limits the government's ability to explore alternative solutions or negotiate the best possible price. The lack of multiple bidders means the government did not benefit from the competitive pressures that typically drive down costs and encourage innovation.
Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best value for their money, as the government did not have the opportunity to compare offers from multiple providers.
Public Impact
The primary beneficiary is General Electric Company, which receives significant funding for research and development. The services delivered are broadly categorized as 'Research and Development in the Physical, Engineering, and Life Sciences,' with specific outcomes not detailed. The geographic impact is likely concentrated in Ohio, where the contractor is located. Workforce implications may include employment for scientists, engineers, and support staff at General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics makes it difficult to assess contractor performance and value.
- Sole-source award limits competitive pressure, potentially leading to higher costs.
- Broad R&D category obscures the precise nature and impact of the research.
- Cost-plus-fixed-fee contract type carries inherent risk of cost escalation without strict oversight.
Positive Signals
- Contract awarded to a large, established company with significant R&D capabilities.
- Long-term contract duration suggests a strategic investment in potentially critical research areas.
- Contract supports research and development, which can lead to technological advancements.
Sector Analysis
This contract falls within the Research and Development sector, specifically NAICS code 541712. This is a broad category encompassing a wide range of scientific and technical services. The market for R&D services is diverse, with significant government investment. Comparable spending benchmarks are difficult to establish without a more precise definition of the research area, but federal R&D spending is in the hundreds of billions annually.
Small Business Impact
The contract was not competed and there is no indication of small business set-asides or subcontracting requirements. This means that opportunities for small businesses to participate in or benefit from this significant federal funding are likely minimal. The focus appears to be on a large, established prime contractor.
Oversight & Accountability
Oversight mechanisms for this contract are not detailed in the provided data. However, as a Department of Defense contract, it would likely fall under the purview of the Defense Contract Management Agency (DCMA) for contract administration. Inspector General oversight would also be applicable. Transparency is limited by the lack of specific performance metrics and the sole-source nature of the award.
Related Government Programs
- Department of Defense Research and Development Programs
- Physical Sciences Research Contracts
- Engineering Research and Development
- General Electric Company Federal Contracts
Risk Flags
- Lack of specific deliverables
- Sole-source award
- Broad NAICS code
- Cost-plus-fixed-fee contract type
Tags
defense, department-of-defense, general-electric-company, research-and-development, cost-plus-fixed-fee, sole-source, ohio, large-contract, physical-sciences, engineering, life-sciences, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.0 million to GENERAL ELECTRIC COMPANY. IGF::OT::IGF CIP 2017
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 $26.0 million.
What is the period of performance?
Start: 2016-12-22. End: 2021-12-31.
What specific research objectives or deliverables were associated with this $26 million contract awarded to General Electric?
The provided data indicates the contract falls under NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology).' However, it does not specify the particular research objectives or deliverables. This broad categorization makes it difficult to ascertain the exact nature of the work performed. Typically, R&D contracts would outline specific research questions, methodologies, expected outcomes, prototypes, or reports. The absence of such details in the summary data suggests that either the information is not publicly available or the contract itself lacked granular definition, which could pose a risk to effective oversight and value assessment.
How does the $26 million contract value compare to typical R&D spending for similar projects within the Department of Defense?
Directly comparing the $26 million value to similar R&D projects is challenging without knowing the specific research domain within the physical sciences. The Department of Defense invests billions annually in R&D across numerous fields, from materials science and aerospace engineering to advanced computing and energy. Contracts can range from a few million for focused studies to hundreds of millions for large-scale development programs. Given this is a sole-source award for an unspecified R&D area, it's difficult to benchmark if $26 million represents a typical or outlier investment. Further analysis would require identifying comparable projects based on specific scientific disciplines and project scope.
What are the potential risks associated with a sole-source, cost-plus-fixed-fee R&D contract of this magnitude?
A sole-source award eliminates competitive pressure, increasing the risk that the government may not achieve the best possible price or explore the most innovative solutions available. The cost-plus-fixed-fee (CPFF) structure, while common for R&D where costs can be uncertain, carries the risk of cost overruns. The 'fixed fee' component is intended to provide the contractor with an incentive to control costs, but if the cost estimates are inaccurate or if oversight is insufficient, the total contract cost can escalate. For taxpayers, the primary risks are paying more than necessary and potentially not achieving the desired research outcomes due to a lack of competitive drive or rigorous performance management.
What is General Electric's track record with federal R&D contracts, particularly with the Department of Defense?
General Electric is a major defense contractor with a long history of engaging in research and development activities for the Department of Defense and other federal agencies. They have a substantial portfolio of contracts spanning various technological domains, including aerospace, energy, and advanced materials. While specific performance metrics for individual contracts are not detailed here, GE's continued success in securing large federal contracts suggests a generally positive track record in delivering complex technological solutions and meeting contractual obligations. However, like any large contractor, they may have faced scrutiny or challenges on specific projects over their extensive history.
How has federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' category (NAICS 541712) trended over the past five years?
Federal spending within NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' has generally seen consistent or increasing investment over the past five years, driven by national priorities in areas like advanced manufacturing, artificial intelligence, cybersecurity, and defense technologies. Agencies such as the Department of Defense, National Science Foundation, and Department of Energy are major contributors to this spending. While specific year-over-year figures fluctuate based on budget allocations and emerging research needs, the overall trend reflects a sustained commitment to scientific and technological advancement. This particular contract, awarded in late 2016, aligns with this broader pattern of federal investment in R&D.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $27,618,190
Exercised Options: $27,618,190
Current Obligation: $25,966,032
Actual Outlays: $326,594
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA862615D0016
IDV Type: IDC
Timeline
Start Date: 2016-12-22
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2024-09-11
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