General Electric Company awarded $55M for Aircraft Engine Parts, with limited competition
Contract Overview
Contract Amount: $55,059,293 ($55.1M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2018-03-27
End Date: 2018-06-30
Contract Duration: 95 days
Daily Burn Rate: $579.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F414 DCS PBL
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $55.1 million to GENERAL ELECTRIC COMPANY for work described as: F414 DCS PBL Key points: 1. Value for money assessed through comparison to similar contracts and market rates. 2. Competition dynamics indicate a sole-source award, potentially impacting price discovery. 3. Risk indicators include reliance on a single contractor for critical engine parts. 4. Performance context is tied to the sustainment of naval aircraft engines. 5. Sector positioning places this contract within the broader aerospace and defense manufacturing industry.
Value Assessment
Rating: fair
Benchmarking the value for this contract is challenging without more detailed cost breakdowns. The firm fixed-price structure provides some cost certainty. However, the lack of competition raises concerns about whether the pricing reflects the best possible value for the government. Further analysis would require comparing the unit costs to historical pricing for similar engine parts or to industry benchmarks for engine maintenance and repair.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, General Electric Company, was solicited. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when the requirement is a follow-on to a previous sole-source award. The limited competition means there was no opportunity for other manufacturers to bid, potentially leading to higher prices than if a competitive process had been employed.
Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates robust government oversight to ensure fair pricing.
Public Impact
The Department of the Navy benefits from the continued availability of critical engine parts for its aircraft fleet. Services delivered include the provision of engine parts essential for aircraft maintenance and operational readiness. Geographic impact is primarily within the operational areas of the U.S. Navy, with parts potentially sourced from Massachusetts. Workforce implications include supporting jobs in aerospace manufacturing at General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for higher costs due to sole-source award.
- Dependence on a single supplier for critical components.
- Limited transparency into cost drivers without competitive bidding.
Positive Signals
- Ensures availability of necessary parts for naval aviation readiness.
- Firm fixed-price contract provides cost certainty for this delivery order.
- General Electric is an established manufacturer with a track record in this domain.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine components. The market for these specialized parts is often dominated by a few key manufacturers due to high barriers to entry, including complex engineering, stringent quality control, and proprietary technology. Spending in this area is critical for maintaining military readiness and supporting the broader defense industrial base.
Small Business Impact
This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, there are no direct subcontracting opportunities for small businesses specified within this award notice. The impact on the small business ecosystem is indirect, relying on the prime contractor's own subcontracting practices, which are not detailed here.
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, requiring delivery of specified parts. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially Inspector General oversight if specific concerns arise.
Related Government Programs
- Aircraft Engine Maintenance
- Naval Aviation Support Contracts
- Defense Logistics Agency Contracts
- Aerospace Component Manufacturing
Risk Flags
- Sole-source award may lead to higher costs.
- Potential for supply chain disruption due to single supplier.
- Limited visibility into contractor's cost structure.
Tags
defense, department-of-defense, department-of-the-navy, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, general-electric-company, massachusetts, delivery-order, aerospace
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $55.1 million to GENERAL ELECTRIC COMPANY. F414 DCS PBL
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 $55.1 million.
What is the period of performance?
Start: 2018-03-27. End: 2018-06-30.
What is General Electric Company's track record with the Department of Defense for similar engine parts?
General Electric Company (GE) has a long-standing and extensive track record with the Department of Defense, particularly the Department of the Navy, for supplying aircraft engines and related parts. GE is a primary original equipment manufacturer (OEM) for many naval aviation platforms. Their history includes numerous contracts for engine sustainment, spare parts, and overhaul services. While this specific award is for a delivery order under a larger contract, GE's overall performance history with the Navy suggests a deep understanding of their requirements and a capacity to deliver critical components. However, the nature of sole-source awards means that performance is often evaluated based on meeting the terms of the existing agreement rather than through competitive benchmarking.
How does the pricing of this contract compare to similar contracts for aircraft engine parts?
Direct comparison of pricing for this specific contract is difficult without access to detailed cost breakdowns and unit prices, especially given its sole-source nature. However, the firm fixed-price (FFP) contract type aims to provide cost certainty. Generally, sole-source awards for specialized components like aircraft engine parts from an OEM can be expected to be at the higher end of the pricing spectrum compared to competitively procured items or parts sourced from aftermarket suppliers. Benchmarking would ideally involve comparing the unit price of the specific part number against historical Navy awards for the same part, or against industry-standard pricing for comparable engine components, factoring in the OEM's established costs and profit margins.
What are the primary risks associated with this sole-source contract for engine parts?
The primary risks associated with this sole-source contract are related to cost and supply chain. Firstly, the lack of competition means the government may be paying a premium price, as there is no market pressure to drive down costs. Secondly, there is a significant dependency on General Electric Company as the sole supplier. Any disruptions in GE's production, supply chain issues, or changes in their business strategy could directly impact the Navy's ability to procure these critical engine parts, potentially leading to aircraft downtime and readiness issues. Furthermore, without competitive bidding, there's a reduced incentive for the contractor to innovate or offer cost-saving efficiencies.
How effective is the firm fixed-price contract type in ensuring program effectiveness for engine parts?
The firm fixed-price (FFP) contract type is generally effective in ensuring cost control and predictability for the government, as the contractor assumes the risk of cost overruns. For engine parts, this means the Navy knows the exact cost per part or for the total order upfront. This effectiveness is maximized when the scope of work and specifications are clearly defined, which is typical for the procurement of specific parts. However, the overall program effectiveness also depends on the contractor's ability to deliver quality parts on time and the government's ability to manage the contract and ensure the parts meet performance requirements. In a sole-source FFP contract, the government's leverage is primarily in contract administration and ensuring adherence to specifications, rather than price negotiation.
What are the historical spending patterns for aircraft engine parts by the Department of the Navy?
Historical spending patterns for aircraft engine parts by the Department of the Navy are substantial and ongoing, reflecting the large and complex nature of naval aviation. The Navy procures a vast array of engine components for its diverse fleet of aircraft, including fighter jets, helicopters, and transport planes. Spending is often characterized by a mix of competitive procurements for common parts and sole-source awards for proprietary components or specialized maintenance services from Original Equipment Manufacturers (OEMs) like General Electric. Annual spending can fluctuate based on fleet readiness requirements, new aircraft introductions, and depot maintenance schedules. Contracts often involve long-term sustainment strategies, including Performance-Based Logistics (PBL), which aim to ensure parts availability and reduce total ownership costs over the lifecycle of the engines.
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
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, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $55,059,293
Exercised Options: $55,059,293
Current Obligation: $55,059,293
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0038317DBG01
IDV Type: IDC
Timeline
Start Date: 2018-03-27
Current End Date: 2018-06-30
Potential End Date: 2018-06-30 00:00:00
Last Modified: 2018-09-24
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)