General Electric Company awarded $37M for F414 FS PBL DO, a sole-source contract for aircraft engine parts
Contract Overview
Contract Amount: $36,965,610 ($37.0M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-02-01
End Date: 2020-03-31
Contract Duration: 59 days
Daily Burn Rate: $626.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F414 FS PBL DO
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $37.0 million to GENERAL ELECTRIC COMPANY for work described as: F414 FS PBL DO Key points: 1. Contract awarded to a single supplier suggests potential lack of competitive pricing. 2. The contract duration of 59 days is relatively short, indicating a specific, immediate need. 3. The firm fixed-price structure aims to control costs, but the absence of competition may inflate the price. 4. This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, a critical area for defense readiness. 5. The value of this contract, while significant, needs to be benchmarked against similar sole-source procurements for aircraft engine components.
Value Assessment
Rating: questionable
Benchmarking the value of this sole-source contract is challenging without comparable bids. The price of $36.97 million for a 59-day delivery order for aircraft engine parts appears high when considering the short duration. Without competition, it's difficult to ascertain if this represents fair market value or if taxpayers are overpaying due to the lack of alternative suppliers.
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 typically occurs when only one supplier can provide the required goods or services, or in cases of urgent need. The lack of competition limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings typically achieved through competitive bidding processes.
Public Impact
The Department of the Navy benefits from the continued availability of critical aircraft engine parts. This contract ensures the operational readiness of naval aircraft, supporting national defense missions. The primary service delivered is the provision of specific engine parts, crucial for aircraft maintenance and repair. The geographic impact is concentrated where these aircraft are deployed and maintained, primarily within the United States.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially increasing costs for taxpayers.
- Short contract duration may indicate an urgent need, but also limits opportunities for broader market engagement.
- Lack of transparency in the sole-source justification process can obscure potential cost efficiencies.
Positive Signals
- Firm fixed-price contract provides cost certainty once awarded.
- Award to General Electric Company, a known entity in aircraft engine manufacturing, suggests a level of established capability.
- Contract supports critical defense assets, ensuring operational readiness.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a specialized and high-value segment of the aerospace industry. The market is often characterized by high barriers to entry due to complex technology and stringent quality requirements. Spending in this sector is heavily influenced by defense procurement cycles and the operational needs of military branches. Comparable spending benchmarks would typically involve other sole-source or limited-competition contracts for similar engine components or maintenance services.
Small Business Impact
This contract does not appear to have a small business set-aside. Given the specialized nature of aircraft engine parts and the sole-source award to a large corporation like General Electric, subcontracting opportunities for small businesses may be limited unless specifically mandated or pursued by the prime contractor.
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 structure, which caps the government's liability. Transparency is limited due to the sole-source nature of the award, but contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Aircraft Engine Maintenance and Repair
- Defense Logistics Agency Contracts
- Naval Aviation Support Programs
- Propulsion Systems Procurement
Risk Flags
- Sole-source award
- Potential for price inflation
- Limited competition
- Critical defense component
Tags
defense, department-of-the-navy, general-electric-company, aircraft-engine-parts, sole-source, firm-fixed-price, delivery-order, 336412, massachusetts, f414-engine
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.0 million to GENERAL ELECTRIC COMPANY. F414 FS PBL 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 $37.0 million.
What is the period of performance?
Start: 2020-02-01. End: 2020-03-31.
What is the track record of General Electric Company in fulfilling similar sole-source contracts for the Department of Defense?
General Electric Company (GE) has a long-standing and extensive track record of supplying aircraft engines and parts to the Department of Defense (DoD) across various branches, including the Navy. They are a primary contractor for many critical engine programs. While GE is a reputable supplier, sole-source awards, even to established contractors, warrant scrutiny. Historical data from federal procurement databases (like FPDS or SAM.gov) would reveal the frequency and value of past sole-source awards to GE for similar components. Analyzing these past awards for pricing trends, performance history, and any associated issues or audits would provide context for the current contract's value and risk. Without specific data on past sole-source performance for this exact engine part, it's assumed GE's general performance in defense contracting is robust, but the lack of competition remains a key factor in assessing value for money.
How does the price of this contract compare to similar aircraft engine parts procured competitively by the Department of the Navy?
Direct comparison of this contract's price ($36.97 million for 59 days) to competitively procured aircraft engine parts is difficult without knowing the exact specifications of the 'F414 FS PBL DO' components. However, sole-source awards are generally expected to be higher than competitively bid contracts due to the absence of market pressure to offer the lowest price. If comparable engine parts (e.g., similar complexity, material, or function) were procured competitively, their per-unit or total cost would likely be lower. To perform a robust comparison, one would need to identify contracts for similar F414 engine components or parts with comparable manufacturing complexity that were awarded through full and open competition. Analyzing the price per pound, price per component, or price relative to the engine's overall value in those competitive contracts would highlight potential overpricing in this sole-source award. The short duration also complicates direct value comparison, as it might represent a specific, high-urgency need rather than a standard supply agreement.
What are the primary risks associated with this sole-source contract for the Department of the Navy?
The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, General Electric Company (GE) may not have the same incentive to offer the most cost-effective solution, potentially leading to higher costs for the Department of the Navy (DoN). Another risk is vendor lock-in; if GE is the sole provider of these critical parts, the DoN becomes dependent on them, potentially limiting future negotiation leverage. Performance risk, while generally lower with established contractors like GE, still exists; any delays or quality issues could impact naval aviation readiness. Furthermore, the justification for the sole-source award itself could be a risk if it was not adequately documented or if alternative sources were overlooked. Finally, the short duration might indicate a critical operational need, meaning any disruption in supply could have immediate and significant consequences for mission capability.
What is the historical spending pattern for F414 engine parts by the Department of the Navy?
Historical spending on F414 engine parts by the Department of the Navy (DoN) is likely substantial, given the F414 engine's use in key naval aircraft like the F/A-18 Super Hornet and EA-18G Growler. The DoN typically procures these parts through a combination of competitive contracts for standard components and sole-source or limited-competition contracts for specialized parts, sustainment, or urgent requirements, often through Performance-Based Logistics (PBL) agreements. Annual spending can fluctuate based on operational tempo, fleet readiness requirements, depot maintenance schedules, and modernization programs. Over the past decade, spending on F414 sustainment and parts has likely been in the hundreds of millions, if not billions, of dollars cumulatively. This specific $36.97 million contract represents a small fraction of that overall historical expenditure but highlights the ongoing need for parts and support for this engine platform. Analyzing trends would reveal if spending is increasing or decreasing, and whether sole-source awards are becoming more or less frequent for these components.
What are the implications of the 'Aircraft Engine and Engine Parts Manufacturing' (NAICS 336412) sector for this contract?
The classification under NAICS code 336412, 'Aircraft Engine and Engine Parts Manufacturing,' signifies that this contract is for highly specialized and technologically advanced components. This sector is characterized by stringent quality control, complex manufacturing processes, and significant research and development investment. Companies operating in this space, like General Electric, often possess unique intellectual property and proprietary manufacturing techniques, which can contribute to sole-source situations. The high barriers to entry—including capital investment, skilled labor requirements, and regulatory compliance—mean there are few competitors capable of producing these parts. Consequently, contracts within this sector often command higher prices and may be awarded non-competitively more frequently than in less specialized industries. The defense aspect further intensifies these characteristics, as military-grade components require exceptional reliability and performance standards.
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: $36,965,610
Exercised Options: $36,965,610
Current Obligation: $36,965,610
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: 2020-02-01
Current End Date: 2020-03-31
Potential End Date: 2020-08-30 00:00:00
Last Modified: 2020-08-26
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)