General Electric awarded $7.8M for aircraft engine parts rework, a sole-source contract with a 4-year duration
Contract Overview
Contract Amount: $7,838,756 ($7.8M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-11-18
End Date: 2025-01-15
Contract Duration: 1,519 days
Daily Burn Rate: $5.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ENGINEERING CHANGE PROPOSAL C-32/C-33 P-ROD/P-HEAD TUBE REWORK KIT UNDER POWER PLANT CHANGE (PPC) PROGRAM
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $7.8 million to GENERAL ELECTRIC COMPANY for work described as: ENGINEERING CHANGE PROPOSAL C-32/C-33 P-ROD/P-HEAD TUBE REWORK KIT UNDER POWER PLANT CHANGE (PPC) PROGRAM Key points: 1. The contract value of $7.8M for a rework kit suggests a significant investment in maintaining critical aircraft engine components. 2. As a sole-source award, the absence of competition may limit price negotiation leverage for the government. 3. The 4-year duration indicates a long-term need for these specific repair parts, potentially tied to fleet readiness. 4. The contract is for Aircraft Engine and Engine Parts Manufacturing, a specialized sector requiring high technical expertise. 5. The fixed-price contract type shifts cost overrun risk to the contractor, but initial pricing is key. 6. The award is managed by the Department of the Navy, highlighting its importance for naval aviation assets.
Value Assessment
Rating: fair
Benchmarking the value of this specific rework kit is challenging without detailed technical specifications and market comparisons for similar specialized components. However, the $7.8 million price tag over four years for a single delivery order suggests a substantial cost per unit or per repair. Given it's a sole-source award, a thorough review of the contractor's cost breakdown and historical pricing for similar work would be necessary to fully assess value for money. Without competitive bids, it's difficult to ascertain if this represents a fair market price.
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 Company, was solicited. This typically occurs when a product or service is unique and only available from a single source, or in cases of urgent and compelling need. The lack of competition means there was no opportunity for other qualified manufacturers to bid, potentially impacting the government's ability to secure the lowest possible price through market forces.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government cannot leverage competitive bidding to drive down prices. This necessitates rigorous justification and oversight to ensure the price paid is reasonable.
Public Impact
Naval aviation personnel and aircraft will benefit from the availability of critical engine repair parts, ensuring operational readiness. The services delivered involve the manufacturing and provision of specialized rework kits for specific aircraft engine models (C-32/C-33 P-ROD/P-HEAD TUBE). The geographic impact is primarily tied to the Department of the Navy's operational bases and maintenance facilities. The contract supports specialized manufacturing jobs within the aerospace sector, likely at General Electric facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source nature limits price discovery and potential savings.
- Long contract duration (over 4 years) requires ongoing monitoring of performance and pricing.
- Reliance on a single supplier for critical engine parts poses a supply chain risk.
Positive Signals
- Award to a known entity (General Electric) suggests a degree of confidence in their capability.
- Fixed-price contract type provides cost certainty for the government, assuming the initial price is fair.
- The contract addresses a specific need for engine component rework, indicating proactive maintenance planning.
Sector Analysis
The aerospace manufacturing sector is characterized by high barriers to entry, significant R&D investment, and stringent quality control requirements. General Electric is a major player in this industry, particularly in aircraft engines. This contract falls under the Aircraft Engine and Engine Parts Manufacturing industry (NAICS 336412), which is a critical component of the defense industrial base. Spending in this area is often driven by military readiness requirements and the lifecycle management of complex aerospace systems.
Small Business Impact
This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless General Electric voluntarily engages small businesses in its supply chain for this specific effort.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. As a sole-source award, there may be enhanced scrutiny regarding the justification for sole-sourcing and the reasonableness of the price. Transparency is limited by the non-competitive nature, but contract modifications, performance reports, and payment data would likely be subject to internal review and potentially Inspector General oversight if performance issues or financial irregularities arise.
Related Government Programs
- Aircraft Engine Maintenance
- Aerospace Parts Manufacturing
- Naval Aviation Readiness Programs
- Sole-Source Defense Contracts
- Power Plant Change Program
Risk Flags
- Sole-source award may limit cost savings.
- Long-term contract requires ongoing performance monitoring.
- Potential supply chain risk due to single supplier.
Tags
defense, department-of-the-navy, aircraft-engine-parts-manufacturing, sole-source, firm-fixed-price, delivery-order, specialty-manufacturing, long-term-contract, engineering-change-proposal, ohio
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.8 million to GENERAL ELECTRIC COMPANY. ENGINEERING CHANGE PROPOSAL C-32/C-33 P-ROD/P-HEAD TUBE REWORK KIT UNDER POWER PLANT CHANGE (PPC) PROGRAM
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 $7.8 million.
What is the period of performance?
Start: 2020-11-18. End: 2025-01-15.
What is the historical spending pattern for similar rework kits or engineering change proposals for the C-32/C-33 aircraft engines by the Department of the Navy?
Analyzing historical spending for similar rework kits or engineering change proposals for the C-32/C-33 engines by the Department of the Navy is crucial for assessing the reasonableness of the current $7.8 million award. Without access to historical contract data, it's difficult to establish a baseline. However, if previous, comparable rework efforts were significantly less expensive or involved more competitive bidding, it would raise questions about the current contract's value. Conversely, if past efforts were similarly priced and also sole-sourced, it might indicate a consistent market reality for these specialized components. A detailed review would involve searching contract databases for prior awards related to these specific engine components or similar repair actions, noting the contract type, duration, and final price to identify trends and potential anomalies.
What specific technical issues or performance degradation necessitate this particular rework kit for the C-32/C-33 engines?
The necessity for the C-32/C-33 P-ROD/P-HEAD TUBE REWORK KIT stems from identified technical issues or performance degradation within these specific engine components. These issues could range from material fatigue, wear and tear beyond standard tolerances, design flaws discovered during operational use, or a need to upgrade components to meet evolving performance or safety standards. Understanding the exact nature of the problem is critical for validating the scope of work and the necessity of the proposed solution. For instance, if the issue is a recurring design flaw, it might suggest a need for a more fundamental redesign rather than a rework kit. Conversely, if it's standard wear on a high-usage component, the rework kit is likely a necessary part of the engine's lifecycle maintenance. This information is typically detailed in the technical documentation supporting the engineering change proposal.
What is General Electric's track record with sole-source contracts for defense-related engine parts, and have there been past disputes over pricing or performance?
General Electric (GE) is a major defense contractor with extensive experience in sole-source contracts for aircraft engine parts, often due to the proprietary nature of their designs and manufacturing processes. Their track record is generally strong in terms of technical capability and delivery, but like many large contractors, they have faced scrutiny regarding pricing on sole-source awards. Historical data may reveal instances where GE's pricing for sole-source components has been questioned by government auditors or oversight bodies, leading to negotiations or adjustments. Performance issues, while less common for established parts, can arise and are typically addressed through contract clauses and performance metrics. A review of past performance evaluations and any significant contract disputes involving GE for similar sole-source engine parts would provide context for the current award's risk profile.
How does the $7.8 million cost compare to the overall lifecycle cost or procurement cost of the aircraft platforms utilizing the C-32/C-33 engines?
Comparing the $7.8 million cost of the rework kit to the overall lifecycle or procurement cost of the aircraft platforms using the C-32/C-33 engines provides essential context for its financial significance. Aircraft platforms, especially military ones, represent massive investments, often costing tens or hundreds of millions of dollars each. The cost of engine maintenance and parts, while substantial in absolute terms, is typically a fraction of the total platform cost. For example, if the C-32/C-33 engines power multi-million dollar aircraft, $7.8 million for a four-year supply of rework kits might be considered a reasonable operational expense necessary to keep those high-value assets flying. Conversely, if these engines are part of a less expensive platform, or if the rework kit represents a disproportionately large percentage of the engine's value, it could indicate a higher-than-expected cost for this specific maintenance requirement.
What are the specific performance metrics or key performance indicators (KPIs) associated with this contract to ensure successful delivery and engine reliability?
While the provided data does not detail specific performance metrics or KPIs for this contract, typical indicators for aircraft engine parts contracts include on-time delivery rates, defect rates (e.g., parts per million defective), adherence to technical specifications, and warranty provisions. For a rework kit, key performance indicators would likely focus on the quality and reliability of the reworked components, ensuring they meet or exceed original specifications and contribute to the overall engine's Mean Time Between Failures (MTBF). The Department of the Navy would establish these KPIs in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). Successful delivery would be measured by the timely provision of kits that pass all required inspections and testing, ultimately contributing to the sustained operational readiness of the aircraft fleet.
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
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 NEUMANN WAY, CINCINNATI, OH, 45215
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: $7,838,756
Exercised Options: $7,838,756
Current Obligation: $7,838,756
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $273,426
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA812219G0001
IDV Type: BOA
Timeline
Start Date: 2020-11-18
Current End Date: 2025-01-15
Potential End Date: 2025-01-15 00:00:00
Last Modified: 2025-12-18
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