DoD's $21.3M RDT&E contract for T408 engine components awarded to General Electric Company
Contract Overview
Contract Amount: $21,340,639 ($21.3M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2023-01-01
End Date: 2026-12-31
Contract Duration: 1,460 days
Daily Burn Rate: $14.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CIP FOR T408 ENGINES - RDT&E
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $21.3 million to GENERAL ELECTRIC COMPANY for work described as: CIP FOR T408 ENGINES - RDT&E Key points: 1. Contract focuses on research, development, testing, and evaluation for critical engine components. 2. Sole-source award to General Electric, the original equipment manufacturer, raises questions about competition. 3. Cost-plus-fixed-fee structure may incentivize cost overruns, requiring close oversight. 4. Long contract duration of 4 years suggests a sustained need for these RDT&E activities. 5. The contract falls under the Aircraft Engine and Engine Parts Manufacturing sector. 6. No small business set-aside was applied, indicating potential missed opportunities for smaller firms.
Value Assessment
Rating: questionable
Benchmarking the value of this RDT&E contract is challenging due to its specialized nature and sole-source award. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The cost-plus-fixed-fee (CPFF) pricing structure, while common for RDT&E, carries inherent risks of cost escalation. The government must ensure robust cost controls and performance monitoring to maximize value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to General Electric Company. As the original equipment manufacturer (OEM) for the T408 engines, GE likely possesses unique technical data and expertise essential for the research and development activities. While this ensures access to specialized knowledge, it bypasses the competitive process, potentially limiting price discovery and innovation from other market participants.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as competition is absent. This necessitates strong justification and rigorous negotiation to ensure the government receives the best possible value.
Public Impact
The primary beneficiaries are the Department of Defense, which will receive advanced engine components and RDT&E support for its aircraft. Services delivered include research, development, testing, and evaluation critical for enhancing engine performance and reliability. The geographic impact is primarily within Massachusetts, where the contract is managed. Workforce implications include sustaining highly skilled engineering and technical jobs within General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost-plus-fixed-fee structure can lead to cost overruns if not managed tightly.
- Lack of small business participation may limit broader economic impact.
Positive Signals
- Award to incumbent OEM ensures access to critical technical expertise.
- RDT&E focus supports technological advancement in a key defense capability.
- Long-term contract provides stability for critical research activities.
Sector Analysis
This contract operates within the aerospace and defense sector, specifically focusing on aircraft engine manufacturing and related research and development. The market for advanced military engine components is highly concentrated, with a few major players like General Electric dominating. Spending in this area is driven by defense modernization needs and the lifecycle support of existing platforms. Comparable spending benchmarks would typically involve other RDT&E contracts for 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 them. Given the specialized nature of RDT&E for advanced engine components and the sole-source award to a large prime contractor, opportunities for small businesses may be limited unless they are direct suppliers to General Electric. This could represent a missed opportunity to foster innovation and growth within the small business defense industrial base.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Contract Management Agency (DCMA). Given the CPFF structure, rigorous oversight of costs, progress, and performance is crucial. Transparency will depend on the reporting requirements stipulated in the contract and the agency's commitment to making relevant data publicly accessible. Inspector General involvement would typically occur if specific allegations of fraud, waste, or abuse arise.
Related Government Programs
- T408 Engine Program
- Department of Defense RDT&E Spending
- Aircraft Engine Manufacturing Contracts
- General Electric Defense Contracts
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee pricing structure
- Lack of small business participation
Tags
defense, department-of-defense, general-electric-company, rdt-and-e, aircraft-engine-manufacturing, sole-source, cost-plus-fixed-fee, massachusetts, delivery-order, engines, aerospace
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.3 million to GENERAL ELECTRIC COMPANY. CIP FOR T408 ENGINES - RDT&E
Who is the contractor on this award?
The obligated recipient is GENERAL ELECTRIC COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $21.3 million.
What is the period of performance?
Start: 2023-01-01. End: 2026-12-31.
What is the historical spending by the Department of Defense on T408 engine components, and how does this contract compare?
Historical spending data specifically for T408 engine components RDT&E is not readily available in the public domain without deeper database access. However, the T408 engine itself is a significant program, powering the Sikorsky CH-53K King Stallion heavy-lift helicopter. The Department of Defense has invested billions in the development and procurement of the CH-53K and its core systems, including the T408 engines. This $21.3 million RDT&E contract represents a portion of the ongoing investment required to mature and enhance the engine's capabilities throughout its lifecycle. Compared to the overall program costs, this specific RDT&E award appears to be a focused investment for specific developmental goals rather than a broad procurement.
What are the specific risks associated with a Cost Plus Fixed Fee (CPFF) contract for RDT&E, and how are they mitigated?
The primary risk with CPFF contracts is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. This can disincentivize cost control if not managed properly. For RDT&E, this structure is often used because the scope and final costs are inherently uncertain. Mitigation strategies include stringent government oversight of all incurred costs, detailed progress reporting, clearly defined milestones, and robust negotiation of the fixed fee based on realistic cost estimates. The government must actively manage the contract to ensure costs remain reasonable and that the contractor is performing efficiently towards the defined RDT&E objectives.
Why was this contract awarded on a sole-source basis, and what are the implications for competition?
This contract was awarded on a sole-source basis because General Electric Company is the original equipment manufacturer (OEM) of the T408 engines. For specialized RDT&E activities directly related to the unique design, performance characteristics, and proprietary technology of these engines, the OEM often possesses the exclusive knowledge, tooling, and data necessary. Awarding to GE ensures access to this critical expertise. The implication for competition is that potential competitors are excluded from bidding, which can limit price discovery and potentially lead to higher costs than if a competitive process were feasible. However, for highly specialized RDT&E, sole-sourcing to the OEM is sometimes deemed necessary to achieve program objectives.
What is the track record of General Electric Company in delivering on similar RDT&E contracts for defense applications?
General Electric Company has a long and extensive track record of delivering complex RDT&E and production contracts for military aircraft engines, including for the T408 program itself. They are a primary contractor for numerous advanced engine programs across various military branches. While specific performance metrics for all past RDT&E contracts are not publicly detailed, GE is generally considered a leading provider of aerospace propulsion systems. Their experience with the T408 engine specifically suggests a deep understanding of its requirements. However, like any large contractor, past performance can vary, and ongoing monitoring of this specific contract's execution is essential.
How does this contract's value and duration compare to other RDT&E efforts in the aircraft engine sector?
The $21.3 million value for this RDT&E contract is moderate within the context of advanced aerospace engine development. Major engine RDT&E programs can easily run into hundreds of millions or even billions of dollars over many years. The 4-year duration (1460 days) is typical for focused RDT&E efforts aimed at specific improvements or testing phases. Compared to the initial development of a new engine platform, this contract appears to be for incremental improvements, sustainment engineering, or specific testing objectives. It represents a focused investment rather than a foundational development effort.
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
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
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: $24,104,653
Exercised Options: $22,361,509
Current Obligation: $21,340,639
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0042119G0001
IDV Type: BOA
Timeline
Start Date: 2023-01-01
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 00:00:00
Last Modified: 2025-11-03
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