DoD's $17.7M Engine Component Improvement Program Awarded to General Electric Company
Contract Overview
Contract Amount: $17,751,665 ($17.8M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2018-01-01
End Date: 2021-12-31
Contract Duration: 1,460 days
Daily Burn Rate: $12.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF ENGINE COMPONENT IMPROVEMENT PROGRAM
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $17.8 million to GENERAL ELECTRIC COMPANY for work described as: IGF::OT::IGF ENGINE COMPONENT IMPROVEMENT PROGRAM Key points: 1. The award focuses on research and development in physical and engineering sciences. 2. General Electric Company is the sole awardee, raising questions about competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. The program falls under the R&D sector, often characterized by high innovation and risk.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, while common for R&D, offers less incentive for cost control compared to fixed-price contracts. The benchmark for similar R&D contracts varies widely, making a direct comparison difficult without more specific performance metrics.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to General Electric Company. This lack of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The absence of competition may result in taxpayers paying more than necessary for the research and development services provided.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The program's success hinges on the innovation and effectiveness of General Electric's R&D efforts. Potential for technological advancements in engine components could benefit military capabilities. The long duration of the contract (4 years) suggests a significant, ongoing need.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost-plus contract type may incentivize higher spending.
- Lack of clear performance metrics for R&D.
- Potential for cost overruns.
Positive Signals
- Addresses critical engine component improvement.
- Leverages expertise of a known contractor.
- Supports technological advancement in defense.
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology). Spending in this sector is crucial for innovation but can be highly variable and difficult to benchmark due to the inherent uncertainties in R&D outcomes.
Small Business Impact
The award was made to General Electric Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific contract.
Oversight & Accountability
The contract's sole-source nature warrants close oversight to ensure fair pricing and effective execution. The Department of the Air Force should monitor cost expenditures and R&D progress diligently.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition.
- Cost-plus contract type.
- Potential for cost overruns.
- Difficulty in measuring R&D effectiveness.
- Sole-source award may not represent best value.
Tags
research-and-development-in-the-physical, department-of-defense, oh, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.8 million to GENERAL ELECTRIC COMPANY. IGF::OT::IGF ENGINE COMPONENT IMPROVEMENT PROGRAM
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 $17.8 million.
What is the period of performance?
Start: 2018-01-01. End: 2021-12-31.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one contractor can meet. The government should have conducted a price analysis, potentially using historical data or independent cost estimates, to ensure the negotiated price was fair and reasonable despite the lack of competition. Further documentation would be needed to confirm these steps were adequately performed.
How is the effectiveness of the R&D being measured, and what are the key performance indicators for this contract?
Measuring R&D effectiveness can be challenging. Key performance indicators might include the successful development of new or improved engine components, meeting specific technical performance targets, successful testing and validation, and timely delivery of prototypes or research findings. The contract should clearly define these metrics and the process for evaluating the contractor's progress against them.
What is the potential long-term cost impact of using a Cost Plus Fixed Fee contract for this R&D program?
Cost Plus Fixed Fee contracts can lead to higher overall costs if the fixed fee represents a significant portion of the anticipated total cost and if actual costs escalate beyond initial estimates. While the fee is fixed, the government bears the risk of increased costs. This structure might not be the most cost-effective for long-term R&D if robust cost controls are not rigorously applied and monitored.
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: $24,241,588
Exercised Options: $19,853,263
Current Obligation: $17,751,665
Actual Outlays: $684,034
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: 2018-01-01
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2025-08-20
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