DoD Spends $157M on Critical Aircraft Engine Parts from General Electric, Awarded Sole-Source
Contract Overview
Contract Amount: $157,467,313 ($157.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2013-02-01
End Date: 2028-12-31
Contract Duration: 5,812 days
Daily Burn Rate: $27.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CRITICAL PARTS
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $157.5 million to GENERAL ELECTRIC COMPANY for work described as: CRITICAL PARTS Key points: 1. Significant contract value of $157.47M for critical aircraft engine parts. 2. Sole-source award to General Electric Company raises questions about competition. 3. Long contract duration (2013-2028) suggests a sustained need. 4. The 'Aircraft Engine and Engine Parts Manufacturing' sector is vital for defense readiness.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive bids, it's difficult to assess if the pricing is optimal compared to market rates for similar critical parts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there's no market pressure to offer the best price.
Taxpayer Impact: The lack of competition in this sole-source award may result in higher spending than if multiple vendors were considered, impacting taxpayer funds.
Public Impact
Ensures continued availability of critical aircraft engine components for military operations. Potential for higher costs due to sole-source procurement impacts defense budget allocation. Reliance on a single supplier for essential parts could pose supply chain risks. Supports a major defense contractor, General Electric Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Fixed Fee contract type can incentivize higher costs.
- Long contract duration may obscure current market pricing.
- Lack of small business participation noted.
Positive Signals
- Ensures supply of critical, potentially unique, aircraft engine parts.
- Long-term contract provides stability for defense readiness.
- Award to established contractor suggests reliability.
Sector Analysis
This contract falls within the 'Aircraft Engine and Engine Parts Manufacturing' sector, a critical component of the aerospace and defense industry. Spending benchmarks are difficult to establish for highly specialized, sole-sourced defense components.
Small Business Impact
The data indicates that small businesses were not involved in this contract (sb: false). This suggests that the procurement focused on large, established prime contractors, potentially missing opportunities for small business innovation and participation.
Oversight & Accountability
The 'Defense Contract Management Agency' is responsible for overseeing this contract. However, the sole-source nature and cost-plus contract type warrant close scrutiny to ensure cost efficiency and prevent potential waste.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of small business participation
- Long contract duration without clear re-competition
- Potential for cost overruns
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $157.5 million to GENERAL ELECTRIC COMPANY. CRITICAL 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 $157.5 million.
What is the period of performance?
Start: 2013-02-01. End: 2028-12-31.
What is the justification for the sole-source award, and has it been reviewed for potential competitive alternatives?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. A thorough review should confirm that no viable competitive alternatives exist and that this approach is truly necessary to meet the government's objectives without undue delay or cost.
How is the 'Cost Plus Fixed Fee' structure being managed to control costs and prevent contractor overruns?
Effective management of a Cost Plus Fixed Fee (CPFF) contract requires robust oversight of the contractor's actual costs, rigorous negotiation of the fixed fee, and clear performance metrics. The contracting officer must ensure that the contractor is incentivized to control costs and that the government receives fair value for the fee paid.
What measures are in place to mitigate supply chain risks associated with relying on a single supplier for critical engine parts?
Mitigation strategies for single-supplier risk include maintaining strategic reserves of parts, developing contingency plans for alternative sourcing or repair, and closely monitoring the supplier's financial health and production capacity. The government might also encourage the supplier to identify and qualify secondary sources where feasible.
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 COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001913R0062
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1000 WESTERN AVE, LYNN, MA, 01905
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $158,296,535
Exercised Options: $129,299,204
Current Obligation: $157,467,313
Actual Outlays: $22,724,381
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $201,368
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-02-01
Current End Date: 2028-12-31
Potential End Date: 2028-12-31 00:00:00
Last Modified: 2025-03-07
More Contracts from General Electric Company
- 200607!387702!1700!n00019!naval AIR Systems Command !N0001906C0088 !A!N! !N! ! !20060424!20090131!001408509!001408509!001367960!n!general Electric Company !1000 Western AVE !lynn !ma!01905!37490!009!25!lynn !essex !mass !+000018238000!n!n!000000000000!2840!gas Turbines and JET Engines, Acft & Comps !a1b!aircraft Engines and Spares !000 !NOT Discernable !336412!E! !3! ! ! ! ! !99990909!B! ! !A! !d!u!j!1!001!n!1a!z!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!b!y! ! ! !Y!1719!N00019!0001! ! — $2.4B (Department of Defense)
- Adaptive Engine Transition Program (aetp) — $2.1B (Department of Defense)
- 200608!001069!2100!w58rgz!usa Aviation and Missile Command!w58rgz06c0038 !A!N! !Y! ! !20051215!20101231!137488664!137488664!001367960!n!general Electric Company !1 Neumann WAY !cincinnati !oh!45215!15000!061!39!cincinnati !hamilton !ohio !+000177879422!n!n!000000000000!r706!logistics Support Services !a1b!aircraft Engines and Spares !000 !NOT Discernable !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !d!n!j!1!001!n!1g!z!n!z! ! !Y!C!N! ! ! !a!a!a!a!000!a!d!n! ! ! ! ! ! !0001! ! — $1.6B (Department of Defense)
- 200210!004379!1700!AA427 !naval AIR Systems Command !N0001901C0147 !A!N! !N!P00001 !20020508!20031130!001408509!001408509!001367960!n!general Electric Company Inc !1000 Western AVE !lynn !ma!01910!37490!009!25!lynn !essex !mass !+000060619860!n!n!000000000000!2840!gas Turbines and JET Engines, Acft & Comps !a1b!aircraft Engines and Spares !2bjn!f414-Ge-400 !336412!E! !1! ! !C! ! !99990909!B! ! !A! !d!n!j!1!001!n!1a!a!w!f! ! !N!C!N! ! ! !a!a!a!a!000!a!b!y! ! ! ! ! ! !0001! — $1.5B (Department of Defense)
- F414-GE-400 Engines — $1.2B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)