DoD's $59.3M contract for aircraft engine parts awarded to General Electric, with no competition
Contract Overview
Contract Amount: $59,343,236 ($59.3M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-01-01
End Date: 2024-12-31
Contract Duration: 365 days
Daily Burn Rate: $162.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8510359532!PBL MATERIAL GE
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $59.3 million to GENERAL ELECTRIC COMPANY for work described as: 8510359532!PBL MATERIAL GE Key points: 1. The contract value represents a significant investment in maintaining critical aircraft engine components. 2. Sole-source awards can limit price negotiation leverage for the government. 3. The duration of the contract suggests a long-term need for these specialized parts. 4. Performance will be crucial given the high-stakes nature of defense logistics. 5. This spending falls within the broader category of aerospace and defense manufacturing. 6. The lack of competition raises questions about potential cost efficiencies.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without comparable sole-source awards for similar high-value, specialized aircraft engine parts. The firm fixed-price structure offers some cost certainty, but the absence of competition means the government cannot leverage multiple bids to ensure the most competitive pricing. Without a competitive process, it's difficult to definitively assess if the price reflects fair market value or if there's an opportunity for cost savings.
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 specific product or service is only available from a single source, often due to proprietary technology, unique capabilities, or existing infrastructure. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure, as the government lacks the leverage to negotiate the lowest possible price.
Public Impact
The primary beneficiaries are the Department of Defense and its operational readiness, ensuring aircraft engines are maintained with necessary parts. Services delivered include the provision of critical aircraft engine components, essential for flight operations and maintenance. The geographic impact is primarily national, supporting defense logistics across various military branches. Workforce implications include supporting specialized manufacturing jobs within General Electric and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price negotiation and potential cost savings.
- Lack of competition may indicate a lack of market alternatives or a reliance on a single supplier.
- High value of the contract warrants close scrutiny of pricing and necessity.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government.
- General Electric is a known entity with established capabilities in aircraft engine manufacturing.
- Contract supports critical defense operational needs.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine and engine parts. This is a highly specialized and capital-intensive industry dominated by a few major players like General Electric. The market size for such components is substantial, driven by global defense spending and commercial aviation needs. This contract represents a portion of the Defense Logistics Agency's broader procurement strategy for maintaining military aviation assets.
Small Business Impact
This contract does not appear to involve a small business set-aside. Given the specialized nature of aircraft engine parts and the sole-source award to a large corporation like General Electric, there are likely limited opportunities for small businesses to directly participate as prime contractors. However, General Electric may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and fair pricing. The Defense Logistics Agency's contracting officers are responsible for managing the contract's performance and adherence to the firm fixed-price agreement. Transparency is generally maintained through contract databases, though detailed performance metrics may be internal.
Related Government Programs
- Aircraft Engine Maintenance
- Defense Logistics Support
- Aerospace Manufacturing
- Military Aircraft Parts Procurement
Risk Flags
- Sole-source award
- Lack of competition
- High contract value
Tags
defense, department-of-defense, defense-logistics-agency, general-electric-company, sole-source, firm-fixed-price, aircraft-engine-parts, manufacturing, massachusetts, delivery-order, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.3 million to GENERAL ELECTRIC COMPANY. 8510359532!PBL MATERIAL GE
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 Logistics Agency).
What is the total obligated amount?
The obligated amount is $59.3 million.
What is the period of performance?
Start: 2024-01-01. End: 2024-12-31.
What is General Electric's track record with sole-source defense contracts for aircraft engine parts?
General Electric has a long history of supplying aircraft engines and parts to the U.S. military, often through sole-source or limited-competition contracts due to the proprietary nature of their technology and established relationships. Analyzing past sole-source awards to GE for similar high-value components can provide context on pricing trends and the government's reliance on their specific capabilities. While specific data on all past sole-source awards is not publicly detailed, their consistent role as a primary supplier suggests a pattern of such arrangements driven by unique technical requirements and long-term sustainment needs for military aircraft fleets.
How does the $59.3 million contract value compare to similar sole-source awards for aircraft engine parts?
Directly comparing this $59.3 million contract to similar sole-source awards is challenging without access to a comprehensive database of historical sole-source procurements for highly specialized aircraft engine parts. However, given the complexity and high-value nature of advanced aircraft engine components, this figure is within a plausible range for sustainment and maintenance contracts awarded to major manufacturers like General Electric. The absence of competition means a direct price-to-price comparison is not feasible, but the value reflects the significant investment required for maintaining sophisticated defense assets.
What are the primary risks associated with this sole-source contract?
The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. Without market pressure, General Electric may not be incentivized to offer the lowest possible price. Another risk is vendor lock-in, where the government becomes heavily reliant on a single supplier, potentially limiting future flexibility and negotiation power. Furthermore, if there are any performance issues or delays from General Electric, the government has limited immediate alternatives, potentially impacting operational readiness.
How effective is the firm fixed-price (FFP) contract type in managing costs for this specific procurement?
The firm fixed-price (FFP) contract type is generally effective in providing cost certainty for the government, as the contractor assumes most of the risk for cost overruns. For this $59.3 million contract, it means the total price is set, and General Electric is responsible for delivering the aircraft engine parts within that budget. This structure helps prevent unexpected cost increases for the government. However, the effectiveness in achieving the *best value* is diminished by the sole-source nature, as the FFP price itself might be higher than it would be in a competitive environment.
What are the historical spending patterns for aircraft engine parts by the Defense Logistics Agency?
The Defense Logistics Agency (DLA) consistently spends billions of dollars annually on aviation parts and engines to support the U.S. military's diverse fleet. Historical data indicates a significant portion of this spending is directed towards major original equipment manufacturers (OEMs) like General Electric, often through long-term sustainment contracts. These contracts frequently involve sole-source or limited-competition awards due to the specialized nature of the components and the need for interoperability and technical expertise. The spending patterns reflect a continuous requirement for parts to ensure aircraft readiness and operational availability across different branches of the armed forces.
What is the potential impact of this contract on future competition for aircraft engine parts?
This specific sole-source award is unlikely to directly impact future competition for *other* aircraft engine parts, as it addresses a specific need for General Electric's proprietary components. However, the broader trend of sole-source awards for specialized defense equipment can indirectly discourage new entrants and limit the development of a competitive market. If the government were to seek alternative suppliers or technologies in the future, the established reliance on GE through contracts like this could present a barrier. The DLA's strategy for fostering competition in the long term, beyond specific sole-source needs, will be crucial.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
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: $59,343,236
Exercised Options: $59,343,236
Current Obligation: $59,343,236
Actual Outlays: $22,283,901
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX21D9416
IDV Type: IDC
Timeline
Start Date: 2024-01-01
Current End Date: 2024-12-31
Potential End Date: 2024-12-31 00:00:00
Last Modified: 2025-02-26
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