DoD Awards $50M+ for F404 Engine Spares to GE, Raising Concerns Over Limited Competition
Contract Overview
Contract Amount: $50,218,114 ($50.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2000-03-31
End Date: 2003-12-31
Contract Duration: 1,370 days
Daily Burn Rate: $36.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 200011!1700!000897!AA427 !NAVAL AIR SYSTEMS COMMAND !N0001999C1427 !A!*!* !20000331!20020930!001408509!001367960!001367960!N!99207!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESSEX !MASS !0001!+000001169269!Y!N!000000000000!AC11!RDTE/AIRCRAFT-BASIC RESEARCH !A1B!AIRCRAFT ENGINES AND SPARES !2BJM!F404-GE-400 OR 402 !3724!3!*!*!*!B!A!*!D !N!U!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!Y!*!
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $50.2 million to GENERAL ELECTRIC COMPANY for work described as: 200011!1700!000897!AA427 !NAVAL AIR SYSTEMS COMMAND !N0001999C1427 !A!*!* !20000331!20020930!001408509!001367960!001367960!N!99207!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESS… Key points: 1. Significant award value exceeding $50 million for aircraft engine spares. 2. Sole-source award to General Electric Company raises competition concerns. 3. Contract duration of over 3 years suggests long-term reliance. 4. Focus on RDTE/Aircraft-Basic Research indicates advanced technology procurement.
Value Assessment
Rating: concerning
The contract value of $50,218,113.61 for F404 engine spares appears high given the 'NOT COMPETED' status. Benchmarking against similar sole-source procurements for specialized aerospace components is difficult but warrants scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This method limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for critical aircraft engine spares likely results in a higher cost to taxpayers than a fully competed procurement.
Public Impact
Impacts military readiness by ensuring availability of critical F404 engine components. Supports jobs at General Electric Company and its supply chain. Potential for increased defense spending due to lack of competitive pricing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost Plus Fixed Fee contract type
Positive Signals
- Ensures availability of critical spares
- Supports established manufacturer
Sector Analysis
This procurement falls within the Defense sector, specifically for aircraft engines and spares, a high-value and often specialized area. Benchmarks for engine spares can vary widely based on technology and exclusivity.
Small Business Impact
The awardee is General Electric Company, a large business. There is no indication in the data that small businesses were involved in this specific sole-source contract, either as prime or subcontractors.
Oversight & Accountability
The 'NOT COMPETED' and sole-source nature of this award warrants close oversight from the Department of Defense and potentially Congress to ensure the pricing is fair and reasonable.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Cost Plus Fixed Fee contract type may incentivize higher spending.
- Lack of transparency regarding the justification for sole-sourcing.
- Long-term reliance on a single supplier for critical components.
Tags
department-of-defense, ma, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $50.2 million to GENERAL ELECTRIC COMPANY. 200011!1700!000897!AA427 !NAVAL AIR SYSTEMS COMMAND !N0001999C1427 !A!*!* !20000331!20020930!001408509!001367960!001367960!N!99207!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESSEX !MASS !0001!+000001169269!Y!N!000000000000!AC11!RDTE/AIRCRAFT-BASIC RESEARCH !A1B!AIRCRAFT ENGINES AND SPARES !2BJM!F404-GE-400 OR 402 !3724!3!*!*!*!B!A!*!D !N!U!
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 $50.2 million.
What is the period of performance?
Start: 2000-03-31. End: 2003-12-31.
What is the justification for the sole-source award of this significant contract for F404 engine spares?
The justification for a sole-source award typically involves factors such as unique technical capabilities, proprietary technology, or the unavailability of alternatives. For critical aircraft engine components like the F404, there might be specific reasons related to performance, safety, or existing infrastructure that limit viable sources to the original manufacturer, General Electric.
How does the Cost Plus Fixed Fee (CPFF) contract type impact the risk and cost-effectiveness of this procurement?
A CPFF contract shifts some of the cost risk to the government while providing the contractor with a guaranteed profit. This can incentivize contractors to incur costs, potentially leading to higher overall expenditures. For specialized spares, it might be used when costs are difficult to estimate upfront, but it requires robust government oversight to manage expenditures effectively.
What is the long-term strategic implication of awarding sole-source contracts for essential aircraft engine components?
Consistently awarding sole-source contracts for essential components can stifle innovation and competition within the aerospace supply chain. It may lead to higher long-term costs for the military and reduce the government's leverage in future negotiations. Developing alternative sources or fostering competition, where feasible, is crucial for sustained cost-effectiveness and technological advancement.
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
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
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2000-03-31
Current End Date: 2003-12-31
Potential End Date: 2003-12-31 00:00:00
Last Modified: 2018-08-14
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