General Electric Company awarded $51.5M for Aircraft Engine Parts, a sole-source contract
Contract Overview
Contract Amount: $51,552,045 ($51.6M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2018-06-21
End Date: 2019-02-28
Contract Duration: 252 days
Daily Burn Rate: $204.6K/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 $51.6 million to GENERAL ELECTRIC COMPANY for work described as: F414 DCS PBL Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. The contract duration of 252 days is relatively short, suggesting a specific need. 3. Focus on aircraft engine parts indicates a critical component for defense operations. 4. The firm fixed-price structure aims to control costs, but competition is key for value. 5. Lack of competition limits opportunities for other manufacturers and potential innovation. 6. The contract falls under the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
Without competitive bidding, it is difficult to benchmark the value for money. The $51.5 million award for aircraft engine parts suggests a significant investment. However, the absence of competing offers means there's no direct comparison to assess if this price represents a fair market value or if taxpayers received the best possible deal. Further analysis would require access to historical pricing for similar parts or internal cost data from the contractor.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This approach bypasses the standard competitive procurement process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they inherently limit price discovery and can lead to higher costs for the government.
Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings that typically arise from a competitive bidding environment. This can result in a less efficient use of public funds.
Public Impact
The primary beneficiaries are likely the Department of the Navy and its aviation units, ensuring operational readiness of aircraft. Services delivered include the provision of essential aircraft engine and engine parts. The geographic impact is primarily within the operational theater of the Navy's aviation assets. Workforce implications are indirect, supporting the manufacturing jobs at General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated prices.
- Sole-source awards can reduce transparency in government spending.
- Potential for reduced innovation due to absence of market pressure.
Positive Signals
- Firm fixed-price contract helps to cap potential cost overruns.
- Award to an established manufacturer like General Electric suggests a focus on reliability.
- Contract supports critical defense infrastructure.
Sector Analysis
The Aircraft Engine and Engine Parts Manufacturing sector is a critical component of the aerospace and defense industry. This contract, valued at over $51 million, represents a significant, albeit specific, expenditure within this sector. The market is characterized by high barriers to entry due to complex technology, stringent quality requirements, and substantial R&D investment. General Electric is a major player in this field, and contracts like this are essential for maintaining the operational capabilities of military aircraft fleets.
Small Business Impact
This contract was not competed and there is no indication of small business set-asides or subcontracting plans. As a sole-source award to a large corporation, it does not directly benefit the small business ecosystem. Opportunities for small businesses would typically arise through subcontracting, but this is not specified in the provided data.
Oversight & Accountability
Oversight for this contract would fall under the Department of Defense's procurement regulations and the Department of the Navy's contracting oversight mechanisms. Transparency is limited due to the sole-source nature of the award. Accountability would be managed through contract performance monitoring and adherence to the firm fixed-price terms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Aircraft Engine Maintenance
- Defense Procurement
- Aerospace Manufacturing
- Military Aircraft Parts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for price inflation
Tags
defense, department-of-defense, department-of-the-navy, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, general-electric-company, massachusetts, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $51.6 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 $51.6 million.
What is the period of performance?
Start: 2018-06-21. End: 2019-02-28.
What is General Electric Company's track record with sole-source defense contracts?
General Electric Company, as a major defense contractor, has a history of receiving both competed and sole-source contracts. Sole-source awards are often justified for specialized components or systems where GE possesses unique manufacturing capabilities or intellectual property. While specific data on all their sole-source awards is extensive, their long-standing relationship with the Department of Defense suggests a pattern of being selected for critical, and sometimes non-competitively procured, systems. Analysis of their past performance on similar sole-source contracts would be necessary to fully assess their reliability and pricing practices in such scenarios. However, the inherent nature of sole-source awards means that direct comparisons to market rates are challenging without additional proprietary or benchmark data.
How does the $51.5 million value compare to similar aircraft engine parts contracts?
Benchmarking the $51.5 million value of this contract against similar aircraft engine parts contracts is challenging without more specific details on the exact parts, quantities, and contract terms. However, for major defense platforms, expenditures in the tens of millions for critical engine components are not uncommon. The 'PBL' in the data likely refers to 'Performance-Based Logistics,' which often involves long-term sustainment and parts provision, potentially leading to higher aggregate values over time. To provide a precise comparison, one would need to identify contracts for the same or comparable engine models, with similar delivery schedules and scope of work, ideally from multiple sources to establish a competitive baseline. Given this is a sole-source award, a direct value-for-money comparison is inherently difficult.
What are the primary risks associated with this sole-source contract?
The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, the government has less leverage to negotiate the lowest possible price, potentially leading to a higher cost for taxpayers. Another risk is reduced innovation; a competitive environment often spurs contractors to offer more advanced or cost-effective solutions. Furthermore, reliance on a single supplier can create supply chain vulnerabilities. If General Electric faces production issues or decides to discontinue a part, the Navy might face significant challenges in finding alternatives, potentially impacting aircraft readiness. The short duration (252 days) might mitigate some long-term risks but indicates a need for prompt fulfillment.
How effective is a firm fixed-price contract in managing costs for aircraft engine parts?
A firm fixed-price (FFP) contract is generally considered effective in managing costs for predictable requirements like the supply of aircraft engine parts, as it shifts the cost risk to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to control their expenses efficiently. For standardized or well-understood parts, FFP provides cost certainty for the buyer. However, the effectiveness of FFP in this sole-source scenario is diminished because the 'fixed price' was not determined through competitive negotiation. While the government knows its maximum liability, it cannot be certain that this price represents the best achievable market rate without competition.
What are the historical spending patterns for Aircraft Engine and Engine Parts Manufacturing (NAICS 336412) by the Department of the Navy?
Historical spending patterns for NAICS 336412 by the Department of the Navy are substantial, reflecting the critical role of aviation in naval operations. The Navy operates a large fleet of aircraft requiring continuous maintenance, repair, and parts replacement. Spending in this category typically includes contracts for new engine components, spare parts, overhaul services, and performance-based logistics support. While the specific total annual spend fluctuates based on fleet readiness requirements, modernization programs, and geopolitical factors, it consistently represents a significant portion of the Navy's procurement budget. Contracts can range from small, individual part orders to multi-billion dollar sustainment programs. The data provided ($51.5M for a specific delivery order) is a snapshot within this broader spending context, likely supporting a particular aircraft platform or engine type.
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: $51,552,045
Exercised Options: $51,552,045
Current Obligation: $51,552,045
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: 2018-06-21
Current End Date: 2019-02-28
Potential End Date: 2019-02-28 00:00:00
Last Modified: 2019-01-29
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