DoD's $18.5M NGT-PAC contract to GE for advanced engine cooling systems shows strong R&D investment
Contract Overview
Contract Amount: $18,531,502 ($18.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2018-05-17
End Date: 2022-07-30
Contract Duration: 1,535 days
Daily Burn Rate: $12.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: COLD AIR FROM ENGINES (CAFE), UNDER NEXT GENERATION THERMAL POWER&CONTROLS (NGT-PAC)
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $18.5 million to GENERAL ELECTRIC COMPANY for work described as: COLD AIR FROM ENGINES (CAFE), UNDER NEXT GENERATION THERMAL POWER&CONTROLS (NGT-PAC) Key points: 1. Contract awarded to a single, established prime contractor with a history in aerospace. 2. Focus on research and development suggests potential for future technological advancements. 3. The contract's duration and cost-plus-fixed-fee structure indicate a complex, long-term project. 4. Competition was full and open, suggesting a robust bidding process. 5. Performance is tied to the development of next-generation thermal power and control systems. 6. Geographic impact is concentrated in Ohio, where the contractor is based.
Value Assessment
Rating: good
The contract value of $18.5 million for research and development in advanced engine cooling systems appears reasonable given the scope and complexity. While direct comparisons are difficult for highly specialized R&D, the cost-plus-fixed-fee structure allows for flexibility while incentivizing the contractor to manage costs effectively. The fixed fee component provides a benchmark for the contractor's profit margin on this specific effort.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of three bidders suggests a healthy level of interest and competition for this advanced research and development effort. This competitive environment likely contributed to achieving a fair price for the government.
Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a market-driven price discovery process and encouraging innovation among potential contractors.
Public Impact
The Department of the Air Force benefits from advancements in engine thermal management, potentially leading to improved aircraft performance and efficiency. This contract supports the development of critical technologies for future military aviation platforms. The primary beneficiaries are the military end-users who will eventually see the impact of these technological improvements. Workforce implications include specialized engineering and research roles within General Electric and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not closely monitored.
- The long duration of the contract requires sustained oversight to ensure progress and adherence to objectives.
- Reliance on a single prime contractor for critical R&D may pose a risk if performance issues arise.
Positive Signals
- Awarded through full and open competition, indicating a competitive bidding process.
- The contract is with a reputable contractor (General Electric) with a strong track record in aerospace.
- Focus on next-generation technology development aligns with strategic modernization goals.
- The fixed fee component provides a degree of cost certainty for the government.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical and engineering sciences related to aerospace propulsion. The market for advanced aerospace components and R&D is characterized by high barriers to entry, significant capital investment, and a limited number of specialized contractors. General Electric is a major player in this industry, competing with other large aerospace and defense firms.
Small Business Impact
There is no indication that this contract included specific small business set-asides. As a research and development contract awarded to a large prime contractor, the primary focus is on specialized technical capabilities. However, General Electric may engage small businesses as subcontractors for specific components or services, contributing to the broader small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Air Force. The cost-plus-fixed-fee structure necessitates regular reviews of progress, expenditures, and adherence to the research objectives. Transparency is maintained through contract reporting requirements and potential audits by the Defense Contract Audit Agency (DCAA).
Related Government Programs
- Advanced Engine Technology Development
- Aerospace Research and Development
- Department of Defense Research Contracts
- Next Generation Aircraft Systems
Risk Flags
- Cost Overrun Potential (CPFF structure)
- Long-term Project Oversight Required
- Dependence on Prime Contractor Performance
Tags
research-and-development, department-of-defense, department-of-the-air-force, general-electric-company, aerospace, engine-technology, full-and-open-competition, cost-plus-fixed-fee, delivery-order, ohio, advanced-technology
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.5 million to GENERAL ELECTRIC COMPANY. COLD AIR FROM ENGINES (CAFE), UNDER NEXT GENERATION THERMAL POWER&CONTROLS (NGT-PAC)
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 $18.5 million.
What is the period of performance?
Start: 2018-05-17. End: 2022-07-30.
What is General Electric's track record with similar Department of Defense R&D contracts?
General Electric has a long and extensive history of performing research and development contracts for the Department of Defense across various platforms and technologies. They are a primary contractor for numerous engine programs and advanced systems. Their portfolio includes contracts for engine modernization, new materials research, and integrated systems development. While specific details of past R&D performance metrics are often proprietary, GE's continued selection for significant R&D efforts by the DoD suggests a generally positive track record in delivering on complex technological objectives and meeting performance requirements within allocated budgets and timelines.
How does the $18.5 million value compare to similar R&D efforts in advanced engine cooling?
Benchmarking the $18.5 million value for this specific R&D contract is challenging due to the highly specialized and often proprietary nature of advanced aerospace technology development. However, R&D contracts for next-generation propulsion systems, including thermal management solutions, typically range from several million to tens or even hundreds of millions of dollars, depending on the maturity, scope, and duration of the research. Given that this contract is for 'next generation thermal power & controls' and involves advanced cooling, the $18.5 million figure appears to be within a reasonable range for a focused R&D effort with a duration of approximately four years. It represents a significant investment but is not exceptionally high compared to the overall cost of developing entirely new engine technologies.
What are the primary risks associated with this cost-plus-fixed-fee contract structure?
The primary risks associated with a Cost-Plus-Fixed-Fee (CPFF) contract structure, like the one used here, revolve around cost control and potential for cost growth. While the fixed fee provides a defined profit margin for the contractor, the government bears the risk of cost overruns if the actual costs incurred to complete the work exceed the estimated costs. This necessitates robust government oversight to monitor expenditures, ensure efficiency, and validate the necessity of all costs. If not managed diligently, the government could end up paying significantly more than initially anticipated. Additionally, there's a potential risk that the contractor might focus more on incurring costs to ensure the fixed fee is realized rather than optimizing for the most efficient solution, although the R&D nature of the contract may mitigate this to some extent.
How effective is the 'full and open competition' approach for specialized R&D like this?
Full and open competition is generally considered the most effective approach for specialized R&D contracts as it maximizes the pool of potential innovators and encourages the best technical solutions to emerge. By allowing any qualified source to bid, the government increases its chances of finding unique approaches and potentially more cost-effective methods. For advanced R&D like the NGT-PAC project, this approach ensures that the government isn't limited to a single provider's perspective and can leverage the diverse expertise available in the market. While it requires a more extensive evaluation process, the long-term benefits of superior technology and potentially better value for taxpayer money often outweigh the initial administrative effort.
What are the historical spending patterns for similar engine cooling R&D within the DoD?
Historical spending patterns for engine cooling R&D within the DoD show a consistent and significant investment in improving thermal management systems for aircraft engines. These investments are driven by the need for higher performance, increased fuel efficiency, and enhanced durability, especially as engine operating temperatures continue to rise. Funding for such R&D has historically been allocated through various programs and contracts, often awarded to major aerospace prime contractors like General Electric and Rolls-Royce. While specific dollar amounts fluctuate year-to-year based on technological priorities and budget cycles, the overall trend indicates a sustained commitment to advancing engine cooling technologies, reflecting their critical role in maintaining air superiority and operational readiness.
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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
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: $18,531,502
Exercised Options: $18,531,502
Current Obligation: $18,531,502
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA865017D2403
IDV Type: IDC
Timeline
Start Date: 2018-05-17
Current End Date: 2022-07-30
Potential End Date: 2022-07-30 00:00:00
Last Modified: 2026-01-05
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