DoD's $55.4M GE Engine Parts Contract Awarded via Non-Competitive Process
Contract Overview
Contract Amount: $55,448,415 ($55.4M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-04-01
End Date: 2020-06-30
Contract Duration: 90 days
Daily Burn Rate: $616.1K/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 $55.4 million to GENERAL ELECTRIC COMPANY for work described as: F414 FS PBL DO Key points: 1. Contract awarded to General Electric Company for aircraft engine parts. 2. The contract was not competed, raising questions about potential value for money. 3. A significant portion of the contract value is tied to a single delivery order. 4. The contract falls under the Aircraft Engine and Engine Parts Manufacturing sector. 5. The award was made by the Department of the Navy. 6. The contract duration was 90 days.
Value Assessment
Rating: questionable
The contract's value of $55.4 million for a 90-day period, awarded non-competitively, warrants scrutiny. Without competitive bids, it is difficult to benchmark the pricing against market rates or similar contracts. The sole-source nature suggests potential for inflated costs. Further analysis would require comparing the unit prices of the engine parts to industry standards or previous contract awards for similar components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach limits the opportunity for price discovery and may result in higher costs for the government compared to a fully competed procurement. The absence of competition means potential suppliers were not given a chance to offer their products or services.
Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competition, as the government did not benefit from the downward price pressure that typically accompanies a competitive bidding process.
Public Impact
The primary beneficiaries are the Department of Defense and its operational readiness, ensuring aircraft engines are maintained. Services delivered include the provision of critical aircraft engine parts. The geographic impact is likely concentrated around naval aviation bases and maintenance facilities. Workforce implications include supporting the skilled labor required for aircraft engine maintenance and repair.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Non-competitive award limits price discovery and potentially increases costs for taxpayers.
- Lack of transparency in pricing due to sole-source nature.
- Potential for vendor lock-in if GE is the only provider of these specific parts.
Positive Signals
- Ensures availability of critical parts for military aircraft, supporting operational readiness.
- Leverages established relationship with a known manufacturer (General Electric) for specialized components.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine components. The market for such specialized parts is often dominated by a few key manufacturers due to high barriers to entry, including intellectual property, complex manufacturing processes, and stringent quality control requirements. Benchmarking spending in this area requires comparing against other sole-source or limited-competition awards for similar high-value, specialized aerospace components.
Small Business Impact
This contract does not appear to have a small business set-aside. Given the nature of aircraft engine parts manufacturing, it is likely that the prime contractor, General Electric, is a large business. There is no explicit information provided regarding subcontracting plans to small businesses, which could be a missed opportunity for small business participation in the defense supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. Accountability is maintained through contract clauses and performance monitoring. Transparency is limited due to the sole-source nature of the award. The Inspector General's office within the DoD may conduct audits or investigations into the contract's fairness and efficiency if concerns arise.
Related Government Programs
- Aircraft Engine Maintenance Contracts
- Defense Logistics Agency Procurement
- Naval Aviation Sustainment Programs
- Aerospace Parts Manufacturing Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Limited transparency
Tags
defense, department-of-defense, department-of-the-navy, general-electric-company, aircraft-engine-parts, non-competed, sole-source, firm-fixed-price, delivery-order, manufacturing, aerospace, massachusetts
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $55.4 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 $55.4 million.
What is the period of performance?
Start: 2020-04-01. End: 2020-06-30.
What is the track record of General Electric Company in supplying aircraft engine parts to the Department of Defense?
General Electric Company (GE) has a long-standing and significant track record as a primary supplier of aircraft engines and engine parts to the Department of Defense (DoD) and various military branches, including the Navy. GE engines power a wide array of military aircraft, from fighter jets to transport planes and helicopters. Their involvement spans decades, encompassing research, development, manufacturing, and sustainment services. The company is known for its advanced technology in aviation propulsion and has consistently secured large contracts for both new engine production and the supply of spare parts and maintenance services. This extensive history suggests a deep understanding of military requirements and a proven capability to deliver complex aerospace components, though it also highlights their critical role and potential for sole-source reliance in certain specialized areas.
How does the pricing of this contract compare to similar sole-source awards for aircraft engine parts?
Direct comparison of pricing for this specific $55.4 million contract awarded to GE is challenging without access to detailed pricing breakdowns and the specific part numbers involved. Sole-source awards inherently lack the transparency of competitive bids, making external benchmarking difficult. However, historical data on sole-source procurements for specialized aerospace components often indicates a premium compared to competitively bid items. Factors such as proprietary technology, unique manufacturing processes, and the absence of alternative suppliers contribute to higher price points. To assess value for money, a detailed cost analysis by the DoD, comparing GE's proposed prices against established cost accounting standards and any available historical data for similar parts, would be necessary. Without this, it remains a 'questionable' value proposition from a taxpayer perspective.
What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?
The primary risks associated with awarding a $55.4 million contract on a sole-source basis are significant. Firstly, there is a heightened risk of overpayment, as the government does not benefit from the competitive pressure that drives down prices. The absence of multiple bidders means the contractor has considerable leverage in price negotiation. Secondly, it can lead to a lack of innovation, as there is less incentive for the sole-source provider to improve efficiency or offer new solutions when competition is not a factor. Thirdly, it creates a dependency on a single supplier, which can be problematic if that supplier faces production issues, financial instability, or decides to discontinue a product line. This dependency can impact operational readiness and long-term sustainment capabilities for critical military assets.
What is the expected effectiveness of this contract in ensuring the operational readiness of naval aircraft?
The effectiveness of this contract in ensuring naval aircraft operational readiness hinges on the timely delivery of the correct, high-quality engine parts specified. Given that GE is a primary manufacturer of many naval aircraft engines, securing these parts is crucial for maintenance, repair, and overhaul (MRO) activities. If the contract successfully provides the necessary components without delays or quality issues, it directly contributes to minimizing aircraft downtime and maximizing fleet availability. However, the sole-source nature introduces a risk factor; any disruption in GE's supply chain or production could directly impact readiness. The effectiveness is therefore contingent on the contractor's performance and the government's ability to manage the risks inherent in a non-competitive award.
How does this contract's spending compare to historical patterns for aircraft engine parts within the Department of the Navy?
Analyzing this $55.4 million contract within the broader historical spending patterns for aircraft engine parts by the Department of the Navy requires access to extensive historical procurement data. The Navy operates a large fleet of aircraft, necessitating continuous investment in engine maintenance and parts. Spending in this category can fluctuate significantly based on fleet size, aircraft age, operational tempo, and major maintenance cycles. While $55.4 million for a 90-day period is substantial, it needs to be contextualized against the Navy's total annual spending on aviation sustainment, which can run into billions of dollars. It is plausible that such awards, especially for specialized or sole-source components, are not uncommon, but the trend towards non-competitive awards for significant sums warrants scrutiny over time to ensure cost-effectiveness.
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: $55,448,415
Exercised Options: $55,448,415
Current Obligation: $55,448,415
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: 2020-04-01
Current End Date: 2020-06-30
Potential End Date: 2020-08-30 00:00:00
Last Modified: 2020-08-26
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