Navy Aviation contract for aircraft engines awarded to General Electric Company for $28.2M
Contract Overview
Contract Amount: $28,188,214 ($28.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2007-02-01
End Date: 2008-01-10
Contract Duration: 343 days
Daily Burn Rate: $82.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: NAVY AVIATION
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $28.2 million to GENERAL ELECTRIC COMPANY for work described as: NAVY AVIATION Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract value represents a significant investment in maintaining naval aviation readiness. 3. Fixed-price contract type suggests cost risks are primarily borne by the contractor. 4. The duration of the contract is relatively short, indicating a specific, time-bound need. 5. The award to a single, established supplier may indicate specialized or proprietary technology. 6. Performance is located in Ohio, suggesting a concentration of related industrial activity.
Value Assessment
Rating: fair
Benchmarking the value of this specific contract is challenging without comparable sole-source awards for similar engine components. The fixed-price nature is a positive indicator for cost control, but the lack of competition inherently limits the government's ability to secure the lowest possible price. The awarded amount of $28.2 million for a single contract needs to be viewed in the context of the overall lifecycle costs of the aircraft and its engines.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The absence of competition means the government did not benefit from a bidding process that could drive down prices through market forces.
Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price, as competitive pressures that typically ensure cost-effectiveness are absent.
Public Impact
Naval aviation operations benefit from the supply of critical aircraft engine components. Ensures the operational readiness of specific Navy aircraft platforms. Supports jobs within the aerospace manufacturing sector, particularly in Ohio. Contributes to national defense capabilities by maintaining air power.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher costs for taxpayers.
- Sole-source awards can create dependency on a single supplier.
- Limited transparency in pricing due to non-competitive nature.
Positive Signals
- Fixed-price contract shifts cost risk to the contractor.
- Award to a reputable manufacturer like General Electric suggests a focus on reliability.
- Supports critical defense infrastructure and readiness.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality requirements. Spending in this area is essential for maintaining the operational capabilities of military aviation fleets. Comparable spending benchmarks would typically involve analyzing annual defense budgets allocated to aircraft sustainment and modernization.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. Furthermore, there is no explicit information suggesting subcontracting opportunities for small businesses were mandated or prioritized within this specific award. The focus is likely on the prime contractor's capabilities for specialized engine parts.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods within the agreed price. Transparency is limited due to the sole-source nature of the award, but contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Navy Aircraft Procurement
- Defense Logistics Agency Aviation Support
- Aircraft Engine Maintenance and Repair Contracts
Risk Flags
- Sole-source award limits price competition.
- Potential for higher costs due to lack of competition.
- Supply chain risk associated with single-source provider.
Tags
defense, department-of-defense, department-of-the-navy, aircraft-engine-and-engine-parts-manufacturing, general-electric-company, sole-source, firm-fixed-price, ohio, navy-aviation, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.2 million to GENERAL ELECTRIC COMPANY. NAVY AVIATION
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 Navy).
What is the total obligated amount?
The obligated amount is $28.2 million.
What is the period of performance?
Start: 2007-02-01. End: 2008-01-10.
What is the track record of General Electric Company in supplying aircraft engines and parts to the Department of Defense?
General Electric Company (GE) has a long and extensive history as a primary supplier of aircraft engines and related parts to the Department of Defense (DoD) across all branches of service. GE is one of the world's leading manufacturers of jet engines for both military and commercial aircraft. For decades, GE Aviation has been instrumental in powering a wide array of military platforms, including fighter jets, bombers, transport aircraft, and helicopters. Their involvement often spans the entire lifecycle of an engine, from initial development and production to sustainment, maintenance, and upgrades. The DoD frequently awards large contracts to GE for engine procurement, spare parts, and overhaul services, reflecting the company's critical role in maintaining military aviation readiness and technological superiority. GE's track record is generally characterized by advanced technological capabilities, significant manufacturing capacity, and a deep understanding of military operational requirements, though like any large contractor, they are subject to performance reviews and contract compliance.
How does the $28.2 million contract value compare to typical spending on aircraft engine components for Navy aviation?
The $28.2 million contract value for aircraft engine and engine parts manufacturing for Navy aviation is a moderate-sized award within the context of defense procurement. While not in the multi-billion dollar range often seen for new aircraft procurement or major platform development, it represents a significant investment for sustainment and readiness. Navy aviation fleets comprise numerous aircraft types, each with complex engine systems requiring continuous maintenance, repair, and replacement of parts. Annual spending on sustainment, including parts and services, can easily run into the hundreds of millions or even billions of dollars across the entire fleet. Therefore, a $28.2 million contract for specific engine components, especially if it covers a particular type of engine or a critical set of parts, is a substantial but not extraordinary expenditure. Its significance lies in its contribution to keeping specific aircraft operational and its potential impact on the supply chain for those components.
What are the primary risks associated with a sole-source award for critical aircraft engine parts?
The primary risks associated with a sole-source award for critical aircraft engine parts revolve around cost, supply chain resilience, and innovation. Without competition, the government loses the leverage to negotiate the lowest possible price, potentially leading to higher expenditures than if multiple vendors had bid. This lack of competition can also reduce the incentive for the sole supplier to innovate or improve efficiency, as they face no market pressure. Furthermore, relying on a single supplier creates a significant supply chain vulnerability. Any disruption at the contractor's facility—whether due to production issues, labor disputes, natural disasters, or geopolitical factors—can directly halt the supply of critical parts, impacting aircraft availability and mission readiness. This dependency can also give the sole-source provider considerable leverage in future negotiations or contract renewals.
How does the firm fixed-price contract type influence cost control and risk allocation for this Navy contract?
The firm fixed-price (FFP) contract type is designed to provide the greatest cost control for the government and shifts the majority of the cost risk to the contractor. Under an FFP agreement, the contractor agrees to a set price for the specified goods or services, regardless of their actual costs incurred. This means that if General Electric Company's costs for manufacturing these engine parts are higher than anticipated, their profit margin will decrease. Conversely, if they manage their costs effectively and complete the work for less than the agreed-upon price, their profit will increase. This structure incentivizes the contractor to manage their resources efficiently, control production costs, and minimize waste. For the Navy, the primary benefit is budget certainty; the total cost of the contract is known upfront, barring any contract modifications. The main risk for the contractor is cost overrun, while the government is protected from unexpected price increases.
What are the potential implications of this contract on the broader aerospace manufacturing sector, particularly in Ohio?
This contract, awarded to General Electric Company and performed in Ohio, has several implications for the broader aerospace manufacturing sector. Firstly, it signifies continued demand for advanced engine components, supporting the health and employment within this specialized industry. For Ohio, a state with a significant aerospace and manufacturing presence, this contract contributes to the local economy through job creation, utilization of skilled labor, and potential investment in facilities and technology. It reinforces the region's position as a hub for aerospace manufacturing. On a broader scale, it supports the overall defense industrial base, ensuring the availability of critical components necessary for national security. The success of such contracts can also influence future investment and R&D decisions within the sector, potentially driving innovation in materials, manufacturing processes, and engine performance.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
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: ONE NEUMANN WAY, CINCINNATI, OH, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $62,716,725
Exercised Options: $62,716,725
Current Obligation: $28,188,214
Contract Characteristics
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA810405G0003
IDV Type: IDC
Timeline
Start Date: 2007-02-01
Current End Date: 2008-01-10
Potential End Date: 2008-01-10 00:00:00
Last Modified: 2010-05-12
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