General Electric awarded $96.4M for F-15EX propulsion, a sole-source contract for critical aircraft engine parts
Contract Overview
Contract Amount: $96,452,418 ($96.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-06-30
End Date: 2022-12-20
Contract Duration: 903 days
Daily Burn Rate: $106.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F-15EX PROPULSION LOT 1
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $96.5 million to GENERAL ELECTRIC COMPANY for work described as: F-15EX PROPULSION LOT 1 Key points: 1. This contract represents a significant investment in maintaining and enhancing the F-15EX fighter jet fleet's operational readiness. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited market alternatives. 3. Performance risk appears moderate, given the established nature of jet engine manufacturing and the contractor's experience. 4. The firm-fixed-price structure provides some cost certainty for the government, shifting most cost overrun risk to the contractor. 5. This procurement is crucial for the Air Force's strategic air superiority capabilities, directly supporting advanced combat aircraft. 6. The duration of the contract (903 days) suggests a sustained need for these propulsion components.
Value Assessment
Rating: fair
Benchmarking the value of this sole-source contract is challenging without comparable sole-source awards for the same propulsion system. However, the $96.4 million award for engine parts over approximately 30 months suggests a substantial per-unit cost, typical for highly specialized aerospace components. Further analysis would require access to historical pricing data for similar engine components and detailed cost breakdowns from the contractor to assess if the price reflects fair market value under sole-source conditions.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating that the Department of Defense identified General Electric as the only responsible source capable of providing the required F-15EX propulsion components. This approach bypasses the standard competitive bidding process, suggesting either unique technical requirements, proprietary technology, or a lack of alternative suppliers for these specific engine parts. The absence of competition limits the government's ability to leverage market forces for potentially lower prices.
Taxpayer Impact: Taxpayers may face higher costs due to the lack of competitive pressure, as the government cannot solicit bids from multiple suppliers to ensure the best possible price.
Public Impact
The primary beneficiaries are the U.S. Air Force and its F-15EX fighter jet program, ensuring the operational readiness of a key strategic asset. The contract delivers essential engine components, critical for the performance and longevity of advanced military aircraft. Geographic impact is primarily national, supporting Air Force bases and maintenance facilities that operate the F-15EX. Workforce implications include sustaining specialized manufacturing jobs within General Electric and its supply chain, particularly in engine production and maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
- Lack of transparency in sole-source negotiations can obscure true cost drivers.
- Dependence on a single supplier for critical components creates supply chain risk.
- Proprietary nature of engine technology may restrict future sourcing options.
Positive Signals
- Contract supports a critical national defense asset (F-15EX), ensuring operational readiness.
- Firm-fixed-price contract provides cost certainty for the government.
- General Electric is an established and experienced provider of aircraft propulsion systems.
- Award ensures continued availability of specialized components for a key Air Force platform.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Aircraft engine manufacturing, in particular, requires specialized expertise, advanced materials, and stringent quality control. This contract for F-15EX propulsion components fits within the broader defense industrial base, supporting the sustainment of advanced fighter aircraft. Comparable spending benchmarks are difficult to establish precisely due to the proprietary nature of engine technology and the specific requirements of the F-15EX platform, but large sole-source contracts for critical defense systems are not uncommon.
Small Business Impact
This contract does not appear to involve small business set-asides, as indicated by the 'sb: false' field. Given the specialized nature of aircraft engine manufacturing and the sole-source award to a large prime contractor (General Electric), the direct impact on small businesses through subcontracting opportunities may be limited or dependent on GE's internal subcontracting strategy. Further investigation into GE's subcontracting plans would be necessary to assess the full impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, specifically within the Air Force. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited by the non-competitive nature, but contract performance, delivery schedules, and quality standards would be monitored. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- F-15EX Aircraft Procurement
- Aircraft Engine Maintenance and Repair
- Aerospace Defense Industrial Base
- Department of the Air Force Sustainment Contracts
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for cost escalation due to single supplier.
- Supply chain dependency on one manufacturer.
- Limited transparency in contract negotiation.
Tags
defense, department-of-defense, air-force, f-15ex, aircraft-engine, propulsion-systems, sole-source, firm-fixed-price, general-electric, major-contract, national-security, aerospace
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $96.5 million to GENERAL ELECTRIC COMPANY. F-15EX PROPULSION LOT 1
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 $96.5 million.
What is the period of performance?
Start: 2020-06-30. End: 2022-12-20.
What is General Electric's track record with supplying propulsion systems for military aircraft, particularly the F-15 program?
General Electric has a long and established history of supplying propulsion systems for various military aircraft, including engines for the F-15 family. Their experience spans decades, encompassing development, manufacturing, and sustainment of complex jet engines. For the F-15 program specifically, GE has been a key supplier, contributing to the platform's operational capabilities. This extensive background suggests a high level of technical expertise and familiarity with the specific demands of military aviation, which likely informed the sole-source decision for the F-15EX propulsion components. Their track record indicates a capacity to meet stringent performance and reliability requirements inherent in advanced fighter jet engines.
How does the $96.4 million award compare to previous or similar propulsion system contracts for the F-15EX or comparable aircraft?
Direct comparison of the $96.4 million award is difficult due to the sole-source nature and the specific components being procured for the F-15EX's Lot 1 propulsion. However, the total contract value over its duration (903 days, approximately 2.5 years) suggests a significant investment per engine or set of components. Historically, major aircraft propulsion systems and their associated parts represent a substantial portion of overall aircraft acquisition and sustainment costs. Without access to detailed cost breakdowns or competitive bids for similar sole-source procurements of advanced engine parts, it's challenging to definitively benchmark this specific award against market rates. The firm-fixed-price structure aims to provide cost certainty, but the absence of competition inherently limits external validation of value.
What are the primary risks associated with this sole-source contract for F-15EX propulsion components?
The primary risks associated with this sole-source contract revolve around cost and supply chain. Without competitive bidding, there is an inherent risk that the government may not achieve the lowest possible price, potentially leading to cost overruns or inefficient use of taxpayer funds. The reliance on a single supplier, General Electric, also introduces supply chain vulnerability. Any disruptions in GE's production, material availability, or unforeseen technical issues could impact the F-15EX program's readiness and operational timelines. Furthermore, the proprietary nature of the technology may limit future flexibility in sourcing or upgrading these components, potentially locking the Air Force into specific solutions.
How effective is the firm-fixed-price (FFP) contract type in managing costs and performance for specialized aerospace components like these?
The firm-fixed-price (FFP) contract type is generally considered effective for managing costs and performance when the scope of work is well-defined and the risks are understood. For specialized aerospace components like aircraft engines, FFP shifts the majority of cost overrun risk to the contractor (General Electric in this case). This incentivizes the contractor to control costs efficiently to maximize profit. It also provides the government with a high degree of cost certainty. However, for highly complex or novel systems, FFP can sometimes lead contractors to build in larger contingencies, potentially increasing the initial price. In this sole-source scenario, the effectiveness hinges on the accuracy of GE's initial pricing and the government's negotiation leverage.
What is the historical spending pattern for F-15EX propulsion systems, and how does this award fit into that trend?
Historical spending on F-15EX propulsion systems is intrinsically linked to the overall procurement and sustainment strategy for the aircraft. As the F-15EX is a relatively new variant, detailed historical spending patterns specifically for its propulsion systems are still emerging. This $96.4 million award for Lot 1 propulsion components represents an early-stage investment in the aircraft's lifecycle, focusing on initial production or sustainment needs. Future spending will likely involve subsequent lots for production engines, spare parts, and ongoing maintenance, potentially increasing significantly over the F-15EX's operational life. The current award sets a baseline for the cost of these critical components and fits within the trend of significant government investment required to maintain advanced air combat capabilities.
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 COMPETED
Solicitation Procedures: ONLY ONE SOURCE
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $96,452,418
Exercised Options: $96,452,418
Current Obligation: $96,452,418
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2020-06-30
Current End Date: 2022-12-20
Potential End Date: 2022-12-20 00:00:00
Last Modified: 2024-01-18
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