General Electric Company awarded $24M for YT706 engine repair, with limited competition and a long performance period
Contract Overview
Contract Amount: $23,980,885 ($24.0M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-01-28
End Date: 2026-12-31
Contract Duration: 1,798 days
Daily Burn Rate: $13.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: YT706 ENGINE AND COMPONENT REPAIR AND PARTS.
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $24.0 million to GENERAL ELECTRIC COMPANY for work described as: YT706 ENGINE AND COMPONENT REPAIR AND PARTS. Key points: 1. Contract awarded to a single vendor, raising questions about price competitiveness. 2. Long contract duration (2022-2026) may not reflect current market conditions. 3. Fixed-price contract type shifts performance risk to the contractor. 4. The contract supports critical defense maintenance for engine components. 5. Geographic focus on Massachusetts for contract performance. 6. No small business set-aside noted, potentially limiting broader participation.
Value Assessment
Rating: fair
The contract value of approximately $24 million over nearly five years for engine repair and parts is substantial. Benchmarking this against similar sole-source or limited-competition contracts for specialized aerospace components is challenging. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for money. The fixed-price nature provides cost certainty but relies heavily on the contractor's accurate estimation and efficient execution.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, General Electric Company, was solicited. This approach is typically used when a specific capability or proprietary technology is required, and competition is not feasible or would not yield benefits. The lack of competition means there was no direct price comparison through multiple bids, potentially leading to higher costs than if multiple vendors had vied for the contract.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without a competitive process, there is less pressure on the contractor to offer the lowest possible price.
Public Impact
The Department of Defense benefits from the continued maintenance and repair of critical YT706 engine components. This contract ensures the operational readiness of aircraft reliant on these engines. The primary beneficiaries are military aviation units requiring reliable engine performance. Workforce implications include specialized technicians at General Electric Company facilities. Geographic impact is concentrated in Massachusetts where the contractor is located.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery and potential savings.
- Long contract duration may not capture evolving market efficiencies.
- Lack of competition raises concerns about contractor's incentive for cost reduction.
Positive Signals
- Fixed-price contract type transfers performance risk to the contractor.
- General Electric Company is a known entity with established capabilities in engine repair.
- Contract supports critical national defense requirements.
Sector Analysis
The aerospace and defense sector is characterized by high technological complexity and specialized maintenance requirements. Contracts for engine repair and component parts often involve original equipment manufacturers due to proprietary knowledge and tooling. The market size for such specialized services is significant, driven by the extensive fleets of military and commercial aircraft. This contract fits within the broader category of defense logistics and sustainment, where long-term support agreements are common.
Small Business Impact
This contract does not appear to include a small business set-aside. Given the specialized nature of engine repair and the sole-source award to General Electric Company, it is unlikely that subcontracting opportunities for small businesses would be mandated or significant. The focus remains on the prime contractor's capabilities, potentially limiting the direct impact on the small business ecosystem within this specific procurement.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The fixed-price contract type provides a degree of financial oversight by establishing a ceiling cost. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Aircraft Engine Repair and Maintenance
- Defense Logistics and Sustainment
- Proprietary Component Repair Services
- Sole-Source Defense Contracts
Risk Flags
- Sole-source award
- Long contract duration
- Lack of competitive bidding
Tags
defense, department-of-defense, general-electric-company, engine-repair, parts, sole-source, fixed-price, massachusetts, commercial-and-industrial-machinery-and-equipment-repair-and-maintenance, delivery-order, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.0 million to GENERAL ELECTRIC COMPANY. YT706 ENGINE AND COMPONENT REPAIR AND PARTS.
Who is the contractor on this award?
The obligated recipient is GENERAL ELECTRIC COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $24.0 million.
What is the period of performance?
Start: 2022-01-28. End: 2026-12-31.
What is the historical spending pattern for YT706 engine repair and parts with General Electric Company?
Historical spending data for YT706 engine repair and parts specifically with General Electric Company prior to this contract award is not detailed in the provided data. However, the current award of approximately $24 million from 2022 to 2026 suggests a significant, ongoing need for these services. Without access to historical contract databases or specific line-item spending, it's difficult to establish a precise trend. Typically, such long-term sustainment contracts indicate consistent demand driven by the operational tempo and fleet size of aircraft utilizing the YT706 engine. Future analysis could involve examining prior, potentially smaller, delivery orders or sole-source awards for similar services to General Electric Company to build a more comprehensive spending history.
How does the pricing of this contract compare to similar sole-source engine repair contracts within the Department of Defense?
Directly comparing the pricing of this $24 million sole-source contract for YT706 engine repair with General Electric Company to other sole-source engine repair contracts within the Department of Defense is challenging without access to a comprehensive database of comparable contracts. Sole-source awards inherently lack direct price competition, making benchmarking difficult. Factors such as engine complexity, required parts, labor rates, and the specific scope of work (e.g., depot-level repair vs. component overhaul) vary significantly between contracts. However, the duration of this contract (nearly five years) and its substantial value suggest it covers a significant portion of the fleet's sustainment needs. A thorough comparison would require analyzing the 'other direct costs' and labor hours against industry benchmarks for similar engine classes and repair types, which are not publicly available for this specific contract.
What are the specific risks associated with a sole-source award for critical engine components?
The primary risk associated with a sole-source award for critical engine components is the potential for inflated pricing due to the absence of competitive pressure. The contractor may have less incentive to control costs or offer discounts, knowing that the government has limited alternatives. Another risk is vendor lock-in, where the government becomes overly reliant on a single supplier, potentially hindering future flexibility or the adoption of newer technologies. Furthermore, if the sole-source provider experiences financial difficulties or operational disruptions, it could severely impact the availability of essential parts and repair services, jeopardizing operational readiness. There's also a risk that the contractor might not prioritize innovation or efficiency improvements as strongly as they would in a competitive environment.
What is the expected performance outcome or effectiveness of this contract in ensuring aircraft readiness?
The expected performance outcome of this contract is to ensure the continued operational readiness of aircraft utilizing the YT706 engine. By providing necessary repair and parts, the contract aims to minimize downtime, maintain engine reliability, and support the overall mission capabilities of the Department of Defense. The fixed-price contract type shifts the responsibility for efficient and timely execution to General Electric Company, incentivizing them to meet performance standards to avoid cost overruns. The long duration suggests a commitment to sustained support, crucial for maintaining a ready fleet. Effectiveness will ultimately be measured by metrics such as turnaround times for repairs, component reliability post-repair, and the overall availability of aircraft powered by the YT706 engine.
Are there any potential alternative solutions or technologies that could be explored in future procurements to enhance competition or value?
For future procurements related to YT706 engine sustainment, exploring alternative solutions could significantly enhance competition and value. This might involve breaking down the contract into smaller, more manageable components that could be competed separately, potentially attracting a wider range of specialized service providers. Investigating the possibility of second-sourcing critical parts or developing repair capabilities with other qualified vendors, even if requiring initial investment, could foster competition. Furthermore, the Department of Defense could explore performance-based contracting models that incentivize innovation and efficiency beyond basic repair, potentially leading to longer component life or reduced maintenance needs. Encouraging the development of modular engine designs or standardized interfaces could also facilitate easier integration of alternative suppliers in the future.
Industry Classification
NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: H9224119R0005
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1000 WESTERN AVE, LYNN, MA, 01905
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: $25,603,445
Exercised Options: $25,603,445
Current Obligation: $23,980,885
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9224121D0002
IDV Type: IDC
Timeline
Start Date: 2022-01-28
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 00:00:00
Last Modified: 2025-12-04
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