DoD awards $18M for LM2500 HPT Kits to General Electric, facing limited competition
Contract Overview
Contract Amount: $18,000,000 ($18.0M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-05-21
End Date: 2025-05-30
Contract Duration: 374 days
Daily Burn Rate: $48.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LM2500 HPT KITS
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $18.0 million to GENERAL ELECTRIC COMPANY for work described as: LM2500 HPT KITS Key points: 1. High value contract for critical engine components. 2. Sole supplier General Electric dominates the market for these specific kits. 3. Potential risk of price escalation due to lack of competition. 4. Manufacturing sector for turbine components is specialized.
Value Assessment
Rating: questionable
The contract value of $18 million for 1 unit is high. Benchmarking is difficult without comparable contracts, but the lack of competition suggests potential overpricing.
Cost Per Unit: $18,000,000
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Electric. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: Taxpayers may bear a higher cost due to the absence of competitive bidding, as the government relies on a single supplier.
Public Impact
Ensures operational readiness of naval vessels equipped with LM2500 engines. Supports critical defense infrastructure and maintenance capabilities. Impacts the specialized manufacturing sector for aerospace and defense components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High per-unit cost
Positive Signals
- Critical component for naval readiness
- Established supplier relationship
Sector Analysis
This contract falls within the Turbine and Turbine Generator Set Units Manufacturing sector. Spending benchmarks for specialized engine components are often high due to proprietary technology and limited manufacturers.
Small Business Impact
The award does not appear to involve small businesses, as it is a sole-source contract with a large, established manufacturer. Opportunities for small business participation are likely minimal.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and prevent potential waste. The Department of the Navy's procurement process should include robust justification for the sole-source award.
Related Government Programs
- Turbine and Turbine Generator Set Units Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits price competition.
- High per-unit cost requires careful justification.
- Dependence on a single supplier creates supply chain risk.
- Lack of transparency in pricing determination.
Tags
turbine-and-turbine-generator-set-units-, department-of-defense, oh, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.0 million to GENERAL ELECTRIC COMPANY. LM2500 HPT KITS
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 $18.0 million.
What is the period of performance?
Start: 2024-05-21. End: 2025-05-30.
What is the justification for awarding this contract sole-source to General Electric?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or existing system compatibility that only one vendor can provide. For LM2500 HPT Kits, General Electric is the original equipment manufacturer and likely holds the intellectual property and specialized tooling required for production, making competition impractical or impossible.
What are the risks associated with relying on a sole-source supplier for critical engine parts?
Relying on a sole-source supplier like General Electric for critical LM2500 HPT Kits presents several risks. These include potential price gouging due to lack of competition, supply chain vulnerabilities if the sole supplier faces production issues, and limited leverage for the government in negotiating terms or demanding upgrades. This dependence can also stifle innovation from other potential manufacturers.
How can the Department of the Navy ensure value for money on this sole-source contract?
To ensure value for money, the Department of the Navy should conduct thorough price analyses, potentially using independent cost estimates or benchmarking against similar, albeit not identical, sole-source procurements. Negotiating favorable payment terms, long-term support agreements, and exploring options for technology transfer or future competition for next-generation components can also help mitigate risks and secure better value.
Industry Classification
NAICS: Manufacturing › Engine, Turbine, and Power Transmission Equipment Manufacturing › Turbine and Turbine Generator Set Units 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: 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: $18,000,000
Exercised Options: $18,000,000
Current Obligation: $18,000,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6449824G4000
IDV Type: BOA
Timeline
Start Date: 2024-05-21
Current End Date: 2025-05-30
Potential End Date: 2025-05-30 00:00:00
Last Modified: 2025-06-03
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