DoD awards $27.1M for T-700 engine repair, with General Electric Company as sole provider
Contract Overview
Contract Amount: $27,142,637 ($27.1M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-10-01
End Date: 2025-09-30
Contract Duration: 364 days
Daily Burn Rate: $74.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T-700 ENGINES COMPONENT REPAIR (PERFORMANCE BASED LOGISTICS) SUPPORT
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $27.1 million to GENERAL ELECTRIC COMPANY for work described as: T-700 ENGINES COMPONENT REPAIR (PERFORMANCE BASED LOGISTICS) SUPPORT Key points: 1. High contract value for specialized engine component repair. 2. Sole-source award to General Electric Company raises competition concerns. 3. Performance-based logistics approach aims for efficiency but requires careful oversight. 4. Sector: Aircraft Engine and Engine Parts Manufacturing.
Value Assessment
Rating: questionable
The contract value of $27.1M for a 364-day period appears high for component repair. Benchmarking against similar performance-based logistics contracts for engine parts is difficult without more data, but the sole-source nature suggests potential for inflated pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may lead to higher costs for taxpayers as the incumbent contractor faces no competitive pressure.
Taxpayer Impact: The absence of competition likely results in a higher cost to taxpayers compared to a competitively awarded contract.
Public Impact
Ensures continued operational readiness for T-700 engines, critical for naval aviation. Potential for increased maintenance costs due to sole-source award. Reliance on a single contractor for essential repair services. Impacts the broader aerospace manufacturing and repair sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- High contract value for a single year.
- Lack of transparency in pricing due to sole-source nature.
Positive Signals
- Performance-based logistics may improve efficiency.
- Ensures critical component availability for military operations.
Sector Analysis
The Aircraft Engine and Engine Parts Manufacturing sector is characterized by high barriers to entry and specialized technical expertise. Spending in this area is often concentrated among a few key players due to the complexity and proprietary nature of the technology.
Small Business Impact
This contract was not awarded to small businesses. The nature of specialized aerospace component repair often favors large, established manufacturers with extensive R&D and production capabilities, limiting opportunities for smaller firms.
Oversight & Accountability
Oversight will be crucial to ensure the performance-based logistics contract delivers value and that General Electric Company meets all contractual obligations. Regular performance reviews and cost audits are recommended given the sole-source nature.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- High contract value
- Reliance on a single supplier
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 $27.1 million to GENERAL ELECTRIC COMPANY. T-700 ENGINES COMPONENT REPAIR (PERFORMANCE BASED LOGISTICS) SUPPORT
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 $27.1 million.
What is the period of performance?
Start: 2024-10-01. End: 2025-09-30.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for the sole-source award needs to be thoroughly documented, likely citing unique capabilities or proprietary technology held by General Electric Company. To ensure fair pricing, the Department of Defense should conduct rigorous cost analysis, benchmark against historical data for similar services, and potentially negotiate specific performance metrics tied to cost savings.
How does the performance-based logistics (PBL) structure mitigate the risks associated with a sole-source contract?
A well-structured PBL contract can mitigate sole-source risks by shifting the focus from input costs to desired outcomes and performance metrics. Success should be measured by availability, reliability, and turnaround times, with financial incentives tied to achieving these targets. This encourages the contractor to optimize processes and manage costs effectively to meet performance goals.
What is the long-term strategy for ensuring competitive sourcing for T-700 engine component repair?
The long-term strategy should involve exploring options for fostering competition, such as encouraging other qualified firms to develop repair capabilities or seeking technology transfer agreements. If sole-sourcing is unavoidable, periodic re-evaluation of the market and contract terms is essential. The DoD should also consider breaking down the requirement into smaller, more competitive lots if feasible.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
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: $131,599,287
Exercised Options: $131,599,287
Current Obligation: $27,142,637
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0038322DZU01
IDV Type: IDC
Timeline
Start Date: 2024-10-01
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2026-03-12
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