DoD's $53.5M GE Engine Parts Contract Awarded via Non-Competitive Process
Contract Overview
Contract Amount: $53,486,919 ($53.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2019-04-01
End Date: 2019-06-30
Contract Duration: 90 days
Daily Burn Rate: $594.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F414 FS PBL QUARTERLY DO.
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $53.5 million to GENERAL ELECTRIC COMPANY for work described as: F414 FS PBL QUARTERLY DO. Key points: 1. Contract awarded without competition, raising questions about price discovery and potential value. 2. Significant spending on aircraft engine parts suggests critical operational needs for the Navy. 3. The firm-fixed-price structure aims to control costs, but the lack of competition limits benchmarking. 4. This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector. 5. The duration of 90 days for this delivery order indicates a short-term requirement. 6. The contractor, General Electric Company, is a major player in the aerospace industry.
Value Assessment
Rating: questionable
Benchmarking the value of this $53.5 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to assess if the pricing reflects fair market value or if there were opportunities for cost savings. The firm-fixed-price (FFP) contract type provides cost certainty for the government, but the absence of competition means the government did not benefit from a price discovery process that typically occurs in competitive procurements. Further analysis would require access to historical pricing data for similar engine parts or internal cost estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one responsible source can provide the required goods or services. The lack of competition means that the Department of the Navy did not solicit bids from multiple vendors, which can limit the government's ability to secure the most favorable pricing and terms. The absence of a competitive bidding process means that price discovery was not achieved through market forces.
Taxpayer Impact: Taxpayers may not have received the best possible price for these critical engine parts due to the lack of competition. Without multiple bids, there is a risk that the awarded price is higher than it would have been in a competitive scenario.
Public Impact
The primary beneficiaries are the Department of the Navy, ensuring operational readiness of its aircraft fleet. The services delivered involve the provision of essential aircraft engine parts, crucial for maintenance and repair. The geographic impact is primarily within the operational theaters of the U.S. Navy's aviation units. Workforce implications are indirect, supporting the maintenance and operational personnel required to keep aircraft flying.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition limits price benchmarking and potential cost savings for taxpayers.
- Sole-source awards can create dependency on a single contractor, potentially reducing future negotiation leverage.
- Transparency in pricing is reduced without a competitive bidding process.
Positive Signals
- Firm-fixed-price contract provides cost certainty for the government.
- Award to a known, established contractor (General Electric) may imply reliability and quality.
- Ensures critical parts are procured to maintain operational readiness.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a specialized segment of the aerospace industry. This sector is characterized by high technological barriers to entry, significant research and development investment, and stringent quality control requirements. The market is often dominated by a few large, established manufacturers. Spending in this area is critical for national defense, supporting the operational capabilities of military aircraft. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar high-value, specialized aerospace components.
Small Business Impact
This contract does not appear to involve a small business set-aside, as indicated by the 'sb': false field. The prime contractor, General Electric Company, is a large corporation. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem from this particular award is unclear, though large prime contractors often utilize small businesses in their supply chains.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny might be higher to ensure the justification for non-competition is sound and that the pricing is reasonable. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is limited by the non-competitive nature, but contract award data is publicly available through federal procurement databases.
Related Government Programs
- Aircraft Engine Maintenance and Repair
- Defense Logistics Agency (DLA) Procurement
- Naval Aviation Sustainment Programs
- Aerospace Manufacturing Contracts
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for price escalation without competition.
- Dependency on a single supplier for critical components.
Tags
defense, department-of-defense, department-of-the-navy, aircraft-engine-parts, manufacturing, not-competed, sole-source, firm-fixed-price, delivery-order, general-electric-company, massachusetts
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $53.5 million to GENERAL ELECTRIC COMPANY. F414 FS PBL QUARTERLY DO.
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 $53.5 million.
What is the period of performance?
Start: 2019-04-01. End: 2019-06-30.
What is the historical spending pattern for this specific contract or similar engine parts with General Electric by the Department of the Navy?
Analyzing historical spending requires access to detailed contract databases beyond the provided data. However, the 'br' field indicates a baseline price of $594,299, which is significantly lower than the awarded amount of $53,486,918.61. This suggests either a substantial increase in quantity, a change in the specific parts procured, or a significant price escalation over time. Without more granular historical data, it's difficult to establish a precise spending trend. Typically, recurring contracts for essential parts like these can represent substantial annual outlays for the DoD, often in the tens or hundreds of millions of dollars over the life of a platform.
What is the justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED' ('ct': 'NOT COMPETED'). The specific justification for this sole-source award is not detailed in the given information. Common justifications for sole-source contracts include unique capabilities, urgent and compelling needs where competition is not feasible, or when only one vendor can meet the technical requirements. For high-value, specialized components like aircraft engine parts from a major manufacturer like GE, justifications often revolve around proprietary technology, existing system integration, or the unavailability of alternatives. A formal justification document (e.g., a Justification and Approval - J&A) would typically be required and maintained by the procuring agency.
How does the awarded price compare to industry benchmarks for similar aircraft engine parts?
Directly comparing the awarded price of $53,486,918.61 to industry benchmarks is challenging without knowing the exact specifications of the engine parts procured. However, given that General Electric is a primary manufacturer for many military aircraft engines, this price likely reflects the high cost associated with specialized, high-performance aerospace components. The 'br' field showing a baseline price of $594,299 suggests this delivery order is for a significant quantity or value beyond a simple baseline. In the absence of competitive bids, assessing 'fairness' relies on internal cost analyses or comparisons to previously awarded contracts for identical or highly similar parts, which are not provided here.
What are the potential risks associated with relying on a single contractor for critical aircraft engine parts?
Relying on a single contractor, like General Electric in this case, for critical aircraft engine parts presents several risks. Firstly, it can lead to a lack of price competition, potentially resulting in higher costs for the government over time. Secondly, it creates a dependency on that specific supplier, which can be problematic if the contractor experiences production issues, financial instability, or decides to discontinue support for certain parts. This dependency can also reduce the government's leverage in future negotiations. Furthermore, a sole-source arrangement may limit opportunities for innovation or the adoption of potentially superior alternative parts from other manufacturers.
What is the performance history of General Electric Company with the Department of the Navy for similar contracts?
General Electric Company is a major defense contractor with a long history of supplying engines and parts to various branches of the U.S. military, including the Department of the Navy. While specific performance metrics for this exact contract (F414 FS PBL QUARTERLY DO) are not detailed in the provided data, GE's overall track record in the aerospace sector is extensive. They are known for producing high-performance engines used in numerous naval aircraft platforms. Performance history would typically be assessed through contract performance reports, past performance questionnaires, and any documented issues or successes on previous awards. Generally, large, established contractors like GE are expected to meet stringent quality and delivery standards for defense contracts.
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $53,486,919
Exercised Options: $53,486,919
Current Obligation: $53,486,919
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0038318DP601
IDV Type: IDC
Timeline
Start Date: 2019-04-01
Current End Date: 2019-06-30
Potential End Date: 2020-08-30 00:00:00
Last Modified: 2020-08-26
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