Navy awards $142.35M for aircraft engine parts, with General Electric as sole source
Contract Overview
Contract Amount: $14,235,000 ($14.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-02-12
End Date: 2026-06-30
Contract Duration: 869 days
Daily Burn Rate: $16.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: T408 - CIP, USN RDT&E
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $14.2 million to GENERAL ELECTRIC COMPANY for work described as: T408 - CIP, USN RDT&E Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits price competition and may not represent the best value. 3. Long performance period (869 days) increases risk exposure. 4. Contract falls under RDT&E for aircraft engines, a critical but complex sector. 5. No small business set-aside, raising questions about broader economic impact. 6. Awarded as a delivery order against an existing contract. 7. Geographic concentration in Massachusetts for this specific award.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a sole-source award, raises concerns about achieving optimal value for money. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The long duration of the contract further amplifies the risk of cost escalation. While the amount is substantial, the lack of competition makes a definitive value assessment challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, General Electric Company, was considered. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. The absence of multiple bidders means there was no opportunity for price discovery through market forces, potentially leading to a higher cost for the government.
Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competition. Without a competitive environment, there is less pressure on the contractor to offer the most cost-effective solution.
Public Impact
The U.S. Navy benefits from the acquisition of critical aircraft engine parts. Services delivered support research, development, testing, and evaluation (RDT&E) for aircraft engines. Geographic impact is concentrated in Massachusetts, where the delivery order is managed. Workforce implications are likely within the aerospace manufacturing and engineering sectors, particularly at General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost-plus-fixed-fee contract type can incentivize higher costs.
- Long contract duration increases exposure to market volatility and cost creep.
- Lack of small business participation may limit broader economic benefits.
Positive Signals
- Award to a known, established contractor (General Electric) suggests reliability.
- Delivery order against an existing contract may indicate streamlined procurement for essential needs.
- Focus on RDT&E supports critical defense modernization efforts.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector (NAICS 336412). This is a highly specialized and capital-intensive industry dominated by a few major players. The U.S. Department of Defense is a significant customer for this sector, driving demand for advanced engine components and RDT&E services. Comparable spending benchmarks are difficult to establish due to the proprietary nature of engine technology and the specific RDT&E requirements.
Small Business Impact
This contract was not awarded as a small business set-aside, nor does it appear to involve significant subcontracting opportunities for small businesses based on the provided data. The sole-source nature of the award further limits the potential for small business involvement. This suggests that the primary benefits of this contract will accrue to the large prime contractor, with limited direct impact on the broader small business ecosystem in this specialized manufacturing area.
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, scrutiny might be higher to ensure fair and reasonable pricing. Transparency is limited by the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance.
Related Government Programs
- Aircraft Engine Procurement
- Naval Aviation RDT&E
- Defense Manufacturing Contracts
- General Electric Defense Contracts
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Long contract duration
- Lack of small business participation
Tags
defense, department-of-defense, department-of-the-navy, aircraft-engine-parts, rdte, general-electric, sole-source, cost-plus-fixed-fee, delivery-order, massachusetts, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.2 million to GENERAL ELECTRIC COMPANY. T408 - CIP, USN 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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $14.2 million.
What is the period of performance?
Start: 2024-02-12. End: 2026-06-30.
What is the historical spending pattern for aircraft engine RDT&E by the Department of the Navy with General Electric?
Analyzing historical spending patterns for aircraft engine RDT&E by the Department of the Navy with General Electric requires access to detailed contract databases. However, it is generally known that the Navy invests significantly in R&D for its aviation platforms, and General Electric is a primary contractor for advanced jet engines. Past awards to GE for similar RDT&E efforts would likely show substantial figures, reflecting the high cost of developing and testing cutting-edge aerospace technology. Without specific historical data, it's difficult to ascertain if the current $142.35 million award represents an increase, decrease, or is consistent with previous RDT&E investments. Factors such as technological advancements, program maturity, and fleet requirements would influence these historical spending levels.
How does the cost-plus-fixed-fee structure compare to other contract types for RDT&E in the aerospace sector?
The Cost-Plus-Fixed-Fee (CPFF) contract type is common for Research, Development, Test, and Evaluation (RDT&E) efforts, particularly when the scope of work is not fully defined or is expected to evolve. In CPFF contracts, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This contrasts with fixed-price contracts, where the price is set upfront, and cost-reimbursement contracts (like Cost Plus Incentive Fee or Cost Plus Award Fee) which offer more flexibility in fee adjustments based on performance. For RDT&E, CPFF offers flexibility but can lead to higher costs for the government if cost controls are not robust, as the contractor has less incentive to minimize expenses compared to fixed-price arrangements. Other RDT&E contracts might utilize Firm-Fixed-Price (FFP) for well-defined research tasks or Cost Plus Incentive Fee (CPIF) to better align contractor incentives with cost control.
What are the specific risks associated with a sole-source award for critical defense components?
Sole-source awards for critical defense components carry several significant risks. Primarily, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most cost-effective solution. This can result in a higher financial burden on taxpayers. Secondly, it can stifle innovation, as there's less incentive for the sole provider to invest in developing more efficient or advanced alternatives when their position is guaranteed. Thirdly, it creates a dependency on a single supplier, which can be problematic if that supplier experiences production issues, financial instability, or geopolitical challenges. This dependency can jeopardize national security if critical components become unavailable. Finally, the absence of competitive benchmarking makes it harder for the government to assess whether the awarded price is fair and reasonable.
What is General Electric's track record with the Department of the Navy for aircraft engine contracts?
General Electric Company has a long-standing and significant track record with the Department of the Navy, particularly in the realm of aircraft engines. GE is a major supplier of jet engines for various naval aviation platforms, including fighter jets and helicopters. Their history with the Navy includes numerous contracts for engine procurement, sustainment, maintenance, and research and development. While specific details of all past contracts are proprietary, GE is generally recognized as a key strategic partner for the Navy's aviation programs. Their extensive experience and established relationship suggest a deep understanding of the Navy's requirements and operational needs, though this also underscores their dominant position in the market.
What are the potential implications of the long contract duration (869 days) on cost and performance?
A long contract duration of 869 days (approximately 2.4 years) for an RDT&E effort involving aircraft engine parts introduces several implications. From a cost perspective, it increases the exposure to market fluctuations in raw material prices, labor costs, and potential inflation over the performance period. The cost-plus-fixed-fee structure means that any cost increases will be reimbursed, potentially leading to a higher final contract value than initially anticipated. For performance, a longer duration can allow for more thorough research, development, and testing, which might be necessary for complex engine components. However, it also extends the period during which unforeseen technical challenges or changes in requirements could arise, potentially leading to contract modifications and delays. It also means the government is committed to this specific solution and contractor for an extended period, potentially delaying the adoption of newer technologies if they emerge during the contract's life.
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: $18,818,978
Exercised Options: $18,818,978
Current Obligation: $14,235,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0042123G0004
IDV Type: BOA
Timeline
Start Date: 2024-02-12
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2025-09-17
More Contracts from General Electric Company
- 200607!387702!1700!n00019!naval AIR Systems Command !N0001906C0088 !A!N! !N! ! !20060424!20090131!001408509!001408509!001367960!n!general Electric Company !1000 Western AVE !lynn !ma!01905!37490!009!25!lynn !essex !mass !+000018238000!n!n!000000000000!2840!gas Turbines and JET Engines, Acft & Comps !a1b!aircraft Engines and Spares !000 !NOT Discernable !336412!E! !3! ! ! ! ! !99990909!B! ! !A! !d!u!j!1!001!n!1a!z!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!b!y! ! ! !Y!1719!N00019!0001! ! — $2.4B (Department of Defense)
- Adaptive Engine Transition Program (aetp) — $2.1B (Department of Defense)
- 200608!001069!2100!w58rgz!usa Aviation and Missile Command!w58rgz06c0038 !A!N! !Y! ! !20051215!20101231!137488664!137488664!001367960!n!general Electric Company !1 Neumann WAY !cincinnati !oh!45215!15000!061!39!cincinnati !hamilton !ohio !+000177879422!n!n!000000000000!r706!logistics Support Services !a1b!aircraft Engines and Spares !000 !NOT Discernable !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !d!n!j!1!001!n!1g!z!n!z! ! !Y!C!N! ! ! !a!a!a!a!000!a!d!n! ! ! ! ! ! !0001! ! — $1.6B (Department of Defense)
- 200210!004379!1700!AA427 !naval AIR Systems Command !N0001901C0147 !A!N! !N!P00001 !20020508!20031130!001408509!001408509!001367960!n!general Electric Company Inc !1000 Western AVE !lynn !ma!01910!37490!009!25!lynn !essex !mass !+000060619860!n!n!000000000000!2840!gas Turbines and JET Engines, Acft & Comps !a1b!aircraft Engines and Spares !2bjn!f414-Ge-400 !336412!E! !1! ! !C! ! !99990909!B! ! !A! !d!n!j!1!001!n!1a!a!w!f! ! !N!C!N! ! ! !a!a!a!a!000!a!b!y! ! ! ! ! ! !0001! — $1.5B (Department of Defense)
- F414-GE-400 Engines — $1.2B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)