DoD's $105M F414 Engine Parts Contract Awarded to General Electric Amidst Limited Competition
Contract Overview
Contract Amount: $105,445,670 ($105.4M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-05-01
End Date: 2023-04-30
Contract Duration: 364 days
Daily Burn Rate: $289.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F414 FS PBL DO FOR 1 MAY - 31 OCT 2022
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $105.4 million to GENERAL ELECTRIC COMPANY for work described as: F414 FS PBL DO FOR 1 MAY - 31 OCT 2022 Key points: 1. The contract is for aircraft engine and engine parts, a critical component for military readiness. 2. General Electric is the sole awardee, raising questions about competitive pricing and innovation. 3. The firm fixed price contract type offers some cost certainty but may limit flexibility. 4. The duration of the award is one year, with potential for future extensions. 5. The sector is dominated by a few large players, potentially limiting competitive options.
Value Assessment
Rating: fair
The $105M award for aircraft engine parts appears to be a standard procurement for a specialized item. Without comparable contract data for similar engine parts from other manufacturers, a precise pricing assessment is difficult. However, the sole source nature suggests potential for higher pricing than a competitive environment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Electric. This method limits price discovery and potentially reduces the government's ability to secure the best possible price. The justification for sole-source procurement would be critical to understanding the necessity.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these critical engine parts, as there was no market pressure to drive down costs.
Public Impact
Ensures continued operational readiness for aircraft relying on F414 engines. Supports a key defense industrial base supplier, General Electric. Potential for increased costs to taxpayers due to lack of competitive bidding. Highlights reliance on specific manufacturers for critical defense components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Potential for overpayment without competitive benchmarking.
- Reliance on a single supplier for critical components.
Positive Signals
- Ensures supply of essential aircraft engine parts.
- Firm fixed price provides cost predictability.
- Supports a major defense contractor.
Sector Analysis
The Aircraft Engine and Engine Parts Manufacturing sector is highly specialized and often characterized by a limited number of large, established players. Spending in this area is critical for national defense, but the high barriers to entry can lead to concentrated markets and sole-source procurements.
Small Business Impact
This contract was awarded to General Electric, a large business. There is no indication of small business participation in this specific award, which is common for highly specialized defense manufacturing contracts.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the price is fair and reasonable. The Department of the Navy should have robust justification for not competing this requirement and should explore competitive strategies for future procurements.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Risk of supply chain disruption if GE faces issues.
- Lack of transparency in price justification.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $105.4 million to GENERAL ELECTRIC COMPANY. F414 FS PBL DO FOR 1 MAY - 31 OCT 2022
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 $105.4 million.
What is the period of performance?
Start: 2022-05-01. End: 2023-04-30.
What is the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award is crucial for understanding why competition was bypassed. Typically, such justifications include unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without this information, it's difficult to assess if the government truly exhausted all competitive options or if market dynamics could have yielded better results.
How does the pricing of these engine parts compare to industry benchmarks for similar components?
Assessing the pricing against industry benchmarks is challenging without access to proprietary cost data or comparable sole-source awards. However, the absence of competition inherently removes the downward pressure on prices that a competitive bidding process provides. The government should conduct thorough cost analyses to ensure the negotiated price is fair and reasonable, even in a sole-source scenario.
What is the long-term strategy for ensuring competitive sourcing of these critical engine parts?
A long-term strategy is essential to mitigate the risks associated with sole-source procurement. This could involve market research to identify potential new entrants, investing in technology to enable alternative suppliers, or breaking down the requirement into smaller, more competitive packages. Proactive planning can foster competition and reduce reliance on single sources for critical defense assets.
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: $105,445,670
Exercised Options: $105,445,670
Current Obligation: $105,445,670
Subaward Activity
Number of Subawards: 7
Total Subaward Amount: $1,354,724
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0038318DP601
IDV Type: IDC
Timeline
Start Date: 2022-05-01
Current End Date: 2023-04-30
Potential End Date: 2023-06-30 00:00:00
Last Modified: 2023-02-27
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