Air Force awards $85M+ for F110 engine sustainment, with limited competition impacting price discovery
Contract Overview
Contract Amount: $85,210,508 ($85.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-04-28
End Date: 2025-09-01
Contract Duration: 1,952 days
Daily Burn Rate: $43.7K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F110 SLOVAKIA ENGINE COVID-19 DIB
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $85.2 million to GENERAL ELECTRIC COMPANY for work described as: F110 SLOVAKIA ENGINE COVID-19 DIB Key points: 1. Value for money is fair, given the critical nature of engine sustainment and the sole-source award. 2. Competition dynamics are limited, with a sole-source award to General Electric, potentially impacting price competitiveness. 3. Risk indicators are moderate, stemming from reliance on a single supplier for critical aircraft components. 4. Performance context is tied to ensuring the operational readiness of Air Force aircraft utilizing F110 engines. 5. Sector positioning is within the defense aerospace manufacturing and sustainment market.
Value Assessment
Rating: fair
The contract value of over $85 million for sustainment services appears reasonable for specialized aircraft engine support. However, without a competitive bidding process, a direct comparison to similar contracts is difficult. Benchmarking the value is challenging due to the sole-source nature, but the price is likely influenced by the unique expertise and proprietary nature of General Electric's F110 engine components and support.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, General Electric Company, was solicited. This approach is typically used when a specific contractor possesses unique capabilities or proprietary technology essential for the requirement. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple vendors had competed.
Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive pressure. While sole-source awards can be justified for specialized needs, they warrant close scrutiny to ensure fair pricing and prevent potential overspending.
Public Impact
The primary beneficiaries are the U.S. Air Force units operating aircraft equipped with F110 engines. Services delivered include sustainment, maintenance, and potentially repair of critical aircraft engine components. The geographic impact is national, supporting Air Force readiness across various bases. Workforce implications include the continued employment of specialized technicians and engineers at General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
- Reliance on a single supplier for critical engine parts poses a supply chain risk.
- Lack of transparency in pricing due to non-competitive award.
- Long-term sustainment costs could escalate without competitive pressure.
Positive Signals
- Ensures continued operational readiness of F110-equipped aircraft.
- Leverages specialized expertise of the original equipment manufacturer (General Electric).
- Provides critical support for a key defense asset.
Sector Analysis
This contract falls within the defense aerospace sector, specifically focusing on aircraft engine manufacturing and sustainment. The market for specialized engine parts and maintenance is often dominated by a few key players like General Electric due to high barriers to entry, including intellectual property and manufacturing expertise. Comparable spending benchmarks are difficult to establish precisely due to the sole-source nature, but overall defense spending on aircraft sustainment represents a significant portion of the military budget.
Small Business Impact
This contract does not appear to involve a small business set-aside. Given the sole-source nature and the specialized requirements for F110 engine sustainment, it is unlikely that small businesses would be primary contractors. Subcontracting opportunities for small businesses may exist, but they would be dependent on General Electric's procurement practices and the specific needs of the sustainment services.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures would include performance metrics outlined in the contract and regular reviews. Transparency is limited due to the sole-source award, but contract modifications and performance reports may be available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- F110 Engine Production Contracts
- Air Force Aircraft Maintenance Programs
- Defense Logistics Agency Engine Support
- Propulsion System Sustainment Contracts
Risk Flags
- Sole-source award
- Potential for price escalation
- Supply chain dependency
Tags
defense, aircraft-engine-manufacturing, department-of-defense, department-of-the-air-force, firm-fixed-price, sole-source, sustainment, ohio, large-contract, engine-parts
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $85.2 million to GENERAL ELECTRIC COMPANY. F110 SLOVAKIA ENGINE COVID-19 DIB
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 $85.2 million.
What is the period of performance?
Start: 2020-04-28. End: 2025-09-01.
What is General Electric's track record with F110 engine sustainment for the Air Force?
General Electric Company is the original equipment manufacturer (OEM) for the F110 engine, which powers several key Air Force platforms, including the F-16 Fighting Falcon and F-15 Eagle. Their track record with F110 sustainment is extensive, as they have been responsible for the engine's production, maintenance, and support throughout its operational life. This includes providing spare parts, technical expertise, depot-level maintenance, and engineering support to ensure the engines meet performance and reliability standards. The Air Force has historically relied on GE for these critical sustainment services, making them the incumbent and sole-source provider for many aspects of F110 support due to proprietary knowledge and manufacturing capabilities.
How does the $85 million award compare to historical spending on F110 engine sustainment?
Historical spending on F110 engine sustainment by the Air Force has been substantial over the decades, given the engine's widespread use. While this specific $85 million award covers a defined period (2020-2025), it represents a portion of the total lifecycle cost for F110 sustainment. Without access to detailed historical contract data for F110 sustainment broken down by year or specific service type, a precise comparison is challenging. However, annual sustainment costs for major aircraft engines can range from tens to hundreds of millions of dollars, depending on the fleet size, operational tempo, and the scope of services required. This award appears to be within the expected range for ongoing sustainment of a critical engine type.
What are the primary risks associated with a sole-source award for critical engine parts?
The primary risks associated with a sole-source award for critical engine parts like those for the F110 engine include: 1. **Price Escalation:** Without competition, the sole provider may charge higher prices than would be achievable in a competitive market. 2. **Reduced Innovation:** The lack of competitive pressure can disincentivize the contractor from investing in process improvements or developing more cost-effective solutions. 3. **Supply Chain Vulnerability:** Over-reliance on a single supplier creates a vulnerability. Any disruption at the supplier's facility (e.g., natural disaster, labor dispute, financial instability) could severely impact the Air Force's operational readiness. 4. **Limited Leverage:** The government has less leverage in negotiations when there is only one viable source for essential components or services.
How does this contract contribute to the overall effectiveness of Air Force F110-powered aircraft?
This contract is crucial for maintaining the operational effectiveness of Air Force aircraft powered by F110 engines. The F110 is a high-performance engine essential for platforms like the F-15 and F-16, which are frontline combat aircraft. Effective sustainment ensures that these engines operate reliably, meet performance specifications, and are available when needed for training, readiness exercises, and combat missions. By providing necessary parts, maintenance, and technical support, this contract directly contributes to the airworthiness and mission capability of the fleet, thereby underpinning the Air Force's ability to project air power.
What is the typical procurement strategy for aircraft engine sustainment, and why was it sole-source here?
Aircraft engine sustainment procurement strategies can vary. Often, initial contracts are awarded competitively. However, as engines age and specific expertise or proprietary parts become critical, sole-source or limited-competition awards to the original equipment manufacturer (OEM) become common. This is frequently due to the OEM holding unique technical data, intellectual property rights, specialized tooling, and manufacturing processes essential for maintaining the engine's integrity and performance. In this case, the F110 engine's specific design and General Electric's role as the OEM likely necessitated a sole-source approach to ensure proper and safe sustainment, avoiding risks associated with third-party maintenance or parts that might not meet stringent military specifications.
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $85,210,508
Exercised Options: $85,210,508
Current Obligation: $85,210,508
Subaward Activity
Number of Subawards: 48
Total Subaward Amount: $8,182,453
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA862618D0029
IDV Type: IDC
Timeline
Start Date: 2020-04-28
Current End Date: 2025-09-01
Potential End Date: 2025-09-01 00:00:00
Last Modified: 2025-08-07
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