DoD's Navy Spends $26M on GE Aircraft Engine Components via Non-Competitive Delivery Order
Contract Overview
Contract Amount: $26,025,565 ($26.0M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-09-22
End Date: 2024-09-30
Contract Duration: 1,469 days
Daily Burn Rate: $17.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FY20-FY21 CT7-8A6 ENGINE COMPONENT SPARES
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $26.0 million to GENERAL ELECTRIC COMPANY for work described as: FY20-FY21 CT7-8A6 ENGINE COMPONENT SPARES Key points: 1. Significant spending on critical aircraft engine components. 2. Sole-source award to General Electric Company raises competition concerns. 3. Long contract duration (4 years) may impact price flexibility. 4. High value suggests critical operational need for these spares.
Value Assessment
Rating: questionable
The contract value of $26M for engine components is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates or potential alternatives. The benchmark of $17.7M suggests this award might be on the higher side.
Cost Per Unit: $17,717
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and potentially leads to higher costs for taxpayers as the government relies solely on the incumbent provider's pricing.
Taxpayer Impact: The absence of competition likely results in a higher cost to taxpayers than a fully competed contract would yield.
Public Impact
Ensures continued operational readiness for Navy aircraft. Supports the maintenance and longevity of critical defense assets. Potential for increased costs due to lack of competitive pressure. Reliance on a single supplier could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Ensures availability of critical spares
- Long-term contract provides stability
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector. Spending in this area is crucial for defense readiness, but competitive procurement is vital to ensure cost-effectiveness and avoid price gouging.
Small Business Impact
The contract was awarded to General Electric Company, a large business. There is no indication that small businesses were involved in this specific procurement, either as prime contractors or subcontractors.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price paid is fair and reasonable, and that future procurements are competed where possible.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Long contract duration
- No small business participation noted
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.0 million to GENERAL ELECTRIC COMPANY. FY20-FY21 CT7-8A6 ENGINE COMPONENT SPARES
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 $26.0 million.
What is the period of performance?
Start: 2020-09-22. End: 2024-09-30.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's presumed the Navy determined General Electric was the only viable option for these specific CT7-8A6 engine components, possibly due to technical specifications or existing integration.
How does the awarded price compare to the benchmark, and what are the implications?
The awarded contract value is approximately $26M, with a per-unit benchmark of $17,717. While the total value is high, the per-unit cost is the key metric for comparison. If the number of units procured is high, the total cost could exceed the benchmark significantly. The lack of competition makes it difficult to definitively state if the price is inflated, but the difference warrants further investigation.
What are the potential risks associated with a sole-source, long-term contract for critical spares?
The primary risks include inflated pricing due to the absence of competitive pressure, potential for vendor complacency, and supply chain vulnerability if the sole source faces disruptions. A long-term commitment also reduces flexibility to adapt to technological advancements or changing requirements, potentially locking the government into suboptimal solutions or prices over the contract's duration.
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
Offers Received: 1
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: $26,025,565
Exercised Options: $26,025,565
Current Obligation: $26,025,565
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001920G0006
IDV Type: BOA
Timeline
Start Date: 2020-09-22
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2025-02-10
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