Air Force Awards $85.6M Contract to General Electric for Aircraft Engine Parts
Contract Overview
Contract Amount: $85,641,427 ($85.6M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2025-03-14
End Date: 2026-05-14
Contract Duration: 426 days
Daily Burn Rate: $201.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: DELIVERY ORDER 6 IS DERIVED FROM THE ORIGINAL BASIC IDIQ CONTRACT FA8626-22-D-0010. THUS, ALL RELEVANT CLAUSES EXISTING AS PART OF THE IDIQ ARE APPLICABLE TO THIS ACTION, AND WILL FLOW DOWN TO THIS DELIVERY ORDER.
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $85.6 million to GENERAL ELECTRIC COMPANY for work described as: DELIVERY ORDER 6 IS DERIVED FROM THE ORIGINAL BASIC IDIQ CONTRACT FA8626-22-D-0010. THUS, ALL RELEVANT CLAUSES EXISTING AS PART OF THE IDIQ ARE APPLICABLE TO THIS ACTION, AND WILL FLOW DOWN TO THIS DELIVERY ORDER. Key points: 1. The contract is a delivery order under an existing IDIQ, indicating a continuation of services or supplies. 2. Full and open competition was utilized, suggesting a competitive bidding process for this award. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. The sector is Aircraft Engine and Engine Parts Manufacturing, a critical component of defense operations.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee contract type carries inherent risk for cost overruns. Without detailed cost breakdowns and robust oversight, it's difficult to assess if the fixed fee is reasonable compared to similar contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the specific pricing mechanisms within a Cost Plus Fixed Fee structure require careful monitoring to ensure value.
Taxpayer Impact: Taxpayers benefit from the competitive process, but the Cost Plus Fixed Fee structure necessitates vigilance to prevent excessive spending.
Public Impact
Ensures continued readiness and operational capability for Air Force aircraft. Supports a major defense contractor, potentially impacting jobs and the aerospace supply chain. The fixed fee component provides some cost certainty for the contractor, but overall project costs can fluctuate.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure can lead to cost escalation.
- Long performance period (426 days) increases exposure to potential issues.
- No small business participation noted.
Positive Signals
- Awarded under full and open competition.
- Supports critical defense infrastructure.
- Clear end date for contract performance.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a vital but specialized area of defense procurement. Benchmarks for this sector are highly dependent on specific engine types and technological complexity.
Small Business Impact
There is no indication of small business participation in this contract award. Further analysis would be needed to determine if subcontracting opportunities were explored or if the prime contractor is a large business.
Oversight & Accountability
As a delivery order under an IDIQ, oversight relies on the established framework of the parent contract. The Air Force will need to ensure rigorous monitoring of costs and performance to manage the Cost Plus Fixed Fee structure effectively.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Lack of small business participation.
- Long contract duration.
- Reliance on existing IDIQ framework for oversight.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, oh, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $85.6 million to GENERAL ELECTRIC COMPANY. DELIVERY ORDER 6 IS DERIVED FROM THE ORIGINAL BASIC IDIQ CONTRACT FA8626-22-D-0010. THUS, ALL RELEVANT CLAUSES EXISTING AS PART OF THE IDIQ ARE APPLICABLE TO THIS ACTION, AND WILL FLOW DOWN TO THIS DELIVERY ORDER.
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 $85.6 million.
What is the period of performance?
Start: 2025-03-14. End: 2026-05-14.
What is the estimated total cost of the contract, considering the Cost Plus Fixed Fee structure?
The provided data lists the award amount as $85,641,427. However, with a Cost Plus Fixed Fee (CPFF) contract, the final cost can exceed this estimate as it covers allowable costs plus a fixed fee. The government's financial exposure is therefore potentially higher than the stated award amount, requiring diligent cost tracking and auditing.
What are the specific risks associated with the Cost Plus Fixed Fee contract type for this acquisition?
The primary risk of a CPFF contract is the potential for cost overruns, as the contractor is reimbursed for all allowable costs incurred. While the fixed fee provides some incentive for efficiency, it doesn't cap the total project cost. This necessitates robust government oversight to scrutinize costs, ensure they are reasonable and allocable, and prevent contractor inefficiencies from inflating the final price.
How does the full and open competition impact the overall value and effectiveness of this contract?
Full and open competition is designed to foster a competitive environment, which typically leads to better pricing and higher quality offerings. For this contract, it suggests multiple capable vendors had the opportunity to bid, potentially driving down costs and ensuring the Air Force selected a provider offering good value. The effectiveness hinges on the chosen vendor's ability to deliver as per the contract terms.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $85,641,427
Exercised Options: $85,641,427
Current Obligation: $85,641,427
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA862622D0010
IDV Type: IDC
Timeline
Start Date: 2025-03-14
Current End Date: 2026-05-14
Potential End Date: 2026-05-14 00:00:00
Last Modified: 2025-09-25
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