DoD's $51.9M contract for PBL Material to General Electric Company raises concerns about competition and value
Contract Overview
Contract Amount: $51,886,486 ($51.9M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2025-01-01
End Date: 2025-12-31
Contract Duration: 364 days
Daily Burn Rate: $142.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PBL MATERIAL
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $51.9 million to GENERAL ELECTRIC COMPANY for work described as: PBL MATERIAL Key points: 1. Significant spending on aircraft engine parts highlights a critical defense supply chain component. 2. Sole-source nature of the award limits price discovery and potential savings. 3. Lack of competition poses a risk of inflated costs and reduced innovation. 4. The contract's value suggests a substantial impact on the Defense Logistics Agency's budget.
Value Assessment
Rating: questionable
The $51.9 million award for PBL Material to General Electric Company lacks a clear benchmark for comparison due to its sole-source nature. Without competitive bids, assessing whether this price represents fair market value is challenging.
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 limits the opportunity for price negotiation and potentially leads to higher costs than a competed contract.
Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these critical aircraft engine parts, potentially leading to inefficient use of funds.
Public Impact
Ensures continued availability of essential aircraft engine parts for military operations. Potential for higher costs due to the absence of competitive bidding. Impacts the Defense Logistics Agency's ability to secure cost-effective solutions. Highlights reliance on a single supplier for critical components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Limited transparency
Positive Signals
- Ensures supply of critical parts
- Long-term relationship with a key supplier
Sector Analysis
The contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical area for defense readiness. Spending benchmarks in this specialized sector can vary widely based on technological complexity and sole-source dependencies.
Small Business Impact
This contract does not appear to involve small businesses, as it is a sole-source award to a large corporation, General Electric Company. Opportunities for small business participation are likely limited or non-existent in this specific procurement.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the price is fair and reasonable. The Defense Logistics Agency should document the justification for not competing this requirement thoroughly.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Lack of price discovery.
- Dependency on a single supplier.
- Limited transparency in pricing.
- Reduced incentive for innovation.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $51.9 million to GENERAL ELECTRIC COMPANY. PBL MATERIAL
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 $51.9 million.
What is the period of performance?
Start: 2025-01-01. End: 2025-12-31.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or lack of alternatives. The Defense Logistics Agency must provide detailed documentation supporting this decision. To ensure fair pricing, they should conduct thorough price analyses, compare historical pricing, and potentially negotiate specific terms with General Electric Company to mitigate the risks associated with a non-competitive procurement.
What are the long-term risks associated with relying on a sole-source provider for critical aircraft engine parts?
Long-term reliance on a sole-source provider for critical parts like those for aircraft engines carries significant risks. These include potential price escalation over time as competition is absent, vulnerability to supply chain disruptions if the sole provider faces issues, and a lack of incentive for the provider to innovate or improve efficiency. It can also limit the government's flexibility in adapting to new technologies or alternative solutions.
How does this sole-source award impact the overall cost-effectiveness of the Department of Defense's aircraft maintenance and readiness?
A sole-source award for critical aircraft engine parts can negatively impact cost-effectiveness. Without competitive pressure, the price paid may be higher than if multiple vendors were bidding, directly increasing maintenance costs. This can strain the defense budget and potentially reduce the number of aircraft that can be maintained or the availability of spare parts, indirectly affecting overall readiness.
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: $51,886,486
Exercised Options: $51,886,486
Current Obligation: $51,886,486
Actual Outlays: $11,983,901
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: 2025-01-01
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2025-12-12
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