DoD awards $48M for T-64 Engines to General Electric, raising concerns about sole-source procurement
Contract Overview
Contract Amount: $48,075,590 ($48.1M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2023-09-26
End Date: 2024-09-26
Contract Duration: 366 days
Daily Burn Rate: $131.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T-64 ENGINE
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $48.1 million to GENERAL ELECTRIC COMPANY for work described as: T-64 ENGINE Key points: 1. High contract value for specialized aircraft engines. 2. Sole-source award to General Electric limits competitive pricing. 3. Potential risk of inflated costs due to lack of competition. 4. Spending concentrated in the Defense sector, specifically aircraft parts manufacturing.
Value Assessment
Rating: questionable
The $48M award for T-64 engines lacks a clear benchmark due to the sole-source nature. Without competitive bids, it's difficult to assess if this price is optimal compared to potential market rates for similar high-performance engines.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, General Electric, was considered. This significantly limits price discovery and competitive pressure, potentially leading to higher costs for the government.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these critical aircraft engines.
Public Impact
Military readiness could be impacted if engine costs escalate significantly. Taxpayers may bear the brunt of non-competitive pricing. Limited transparency in the procurement process for this high-value item.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Lack of competition
- High contract value
Positive Signals
- Essential defense component
- Clear contract duration
Sector Analysis
This award falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the Defense industry. Spending in this area is often characterized by high R&D costs and specialized manufacturing, but competition is crucial for cost control.
Small Business Impact
This contract was not awarded to a small business. The sole-source nature of the award further indicates that opportunities for small businesses to participate in this specific procurement were likely nonexistent.
Oversight & Accountability
The sole-source justification for this significant award warrants scrutiny. Oversight should focus on ensuring the necessity of sole-source procurement and exploring future opportunities for competitive bidding on similar contracts.
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.
- Lack of transparency in price discovery.
- No small business participation.
- High contract value concentrated with one vendor.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.1 million to GENERAL ELECTRIC COMPANY. T-64 ENGINE
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 $48.1 million.
What is the period of performance?
Start: 2023-09-26. End: 2024-09-26.
What is the justification for awarding this contract on a sole-source basis, and has an alternatives analysis been performed?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. An alternatives analysis is crucial to demonstrate that no other vendor could meet the government's needs. Without this information, it's difficult to ascertain if the government truly exhausted all competitive options or if this represents a missed opportunity for cost savings.
What are the long-term cost implications of relying on a sole-source provider for T-64 engines, especially considering potential price increases over time?
Sole-source contracts can lead to escalating costs as the provider faces no competitive pressure to maintain or reduce prices. Over the long term, this could significantly inflate the Department of Defense's budget for aircraft maintenance and readiness. Regular price reviews and market research are essential to mitigate these risks, though challenging without active competition.
How does the unit cost of these T-64 engines compare to similar engines used in other military aircraft or by allied nations, if such data is available?
Benchmarking the unit cost is challenging due to the sole-source nature of this award. However, comparing it to publicly available data for comparable military-grade turbine engines, considering factors like thrust, fuel efficiency, and maintenance requirements, could provide an indirect assessment. A significant deviation from industry norms might indicate an unfavorable price, warranting further investigation.
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: $48,075,590
Exercised Options: $48,075,590
Current Obligation: $48,075,590
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0038319DUK01
IDV Type: IDC
Timeline
Start Date: 2023-09-26
Current End Date: 2024-09-26
Potential End Date: 2024-09-26 00:00:00
Last Modified: 2024-04-17
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