DoD's $47.5M contract for aircraft engine parts manufacturing awarded to General Electric Company
Contract Overview
Contract Amount: $47,394,855 ($47.4M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-12-14
End Date: 2021-12-30
Contract Duration: 381 days
Daily Burn Rate: $124.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8507855336!PBL SERVICE SUPPORT GE
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $47.4 million to GENERAL ELECTRIC COMPANY for work described as: 8507855336!PBL SERVICE SUPPORT GE Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract's duration of 381 days suggests a need for ongoing support for critical defense assets. 3. Lack of competition indicates potential risks related to contractor performance and innovation. 4. The fixed-price contract type aims to control costs, but the absence of competition limits benchmarking. 5. Analysis of this contract is crucial for understanding spending patterns within the aircraft engine parts manufacturing sector.
Value Assessment
Rating: questionable
Without competitive bids, it is difficult to assess if the $47.5 million awarded represents good value for money. Benchmarking against similar sole-source contracts for aircraft engine parts is necessary to determine fair pricing. The fixed-price nature of the contract provides some cost certainty, but the lack of competition prevents a robust comparison of pricing strategies.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when only one vendor can provide the required goods or services. The lack of multiple bidders limits the government's ability to leverage competition to drive down prices and ensure the best possible terms.
Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available. Without competing offers, the government relies heavily on the contractor's proposed pricing, which could be higher than if multiple vendors were vying for the contract.
Public Impact
The primary beneficiaries are the Department of Defense, ensuring the continued operation and maintenance of its aircraft fleet. Services delivered include the manufacturing and supply of critical aircraft engine parts, essential for aviation readiness. The geographic impact is primarily within the United States, supporting defense supply chains. Workforce implications include supporting skilled manufacturing jobs within the aerospace and defense industry.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs for taxpayers.
- Lack of transparency in the procurement process due to non-competitive nature.
- Dependence on a single contractor can create supply chain vulnerabilities.
- Performance risks are heightened without the pressure of competing offers.
Positive Signals
- Fixed-price contract type offers cost predictability.
- Award to General Electric, a known entity in aerospace manufacturing, suggests a level of established capability.
- Contract supports critical defense logistics and readiness.
Sector Analysis
The aircraft engine and engine parts manufacturing sector is a critical component of the aerospace and defense industry. It is characterized by high barriers to entry, significant R&D investment, and stringent quality control requirements. Spending in this sector is heavily influenced by defense budgets and the operational needs of military aviation. Comparable spending benchmarks are difficult to establish without more detailed contract specifics, but this award falls within the typical range for specialized defense manufacturing support.
Small Business Impact
This contract does not appear to have a small business set-aside component, as it was awarded directly to General Electric Company. There is no information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem is likely minimal for this specific award, but it highlights the dominance of large prime contractors in certain defense manufacturing areas.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA). Accountability measures are inherent in the contract terms, particularly the fixed-price structure. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Aircraft Engine Maintenance, Repair, and Overhaul
- Defense Logistics Support Services
- Aerospace Manufacturing Contracts
- Military Aircraft Parts Procurement
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for cost overruns
- Supply chain dependency
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-engine-parts, manufacturing, sole-source, fixed-price, general-electric, massachusetts, non-competitive
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $47.4 million to GENERAL ELECTRIC COMPANY. 8507855336!PBL SERVICE SUPPORT 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 $47.4 million.
What is the period of performance?
Start: 2020-12-14. End: 2021-12-30.
What is the historical spending pattern for aircraft engine parts with General Electric Company by the Department of Defense?
Analyzing historical spending with General Electric Company for aircraft engine parts by the Department of Defense requires access to comprehensive contract databases. However, it is generally known that the DoD has a long-standing relationship with major aerospace manufacturers like GE for engine support. Past awards would likely show a pattern of significant investment in maintaining and supplying parts for various military aircraft platforms. Trends might indicate shifts in demand based on fleet age, modernization programs, or changes in operational tempo. Without specific data points for this contract's predecessors, it's difficult to quantify precise historical spending, but the nature of defense aviation suggests consistent, substantial outlays for engine components over time.
How does the pricing of this contract compare to similar sole-source awards for aircraft engine parts?
Direct comparison of pricing for this $47.5 million sole-source contract to similar awards is challenging without access to detailed pricing structures and specific part numbers. Sole-source contracts inherently lack the price discovery mechanism of open competition. To assess value, one would need to benchmark against other sole-source awards for comparable engine parts, considering factors like complexity, material costs, and required certifications. Additionally, comparing to competitively awarded contracts for similar, though not identical, parts could provide a rough estimate of market rates. The Defense Contract Audit Agency (DCAA) often reviews pricing for sole-source awards to ensure reasonableness, but this internal review is not publicly available for detailed comparison.
What are the key performance indicators (KPIs) for this contract, and how is contractor performance being monitored?
While specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data, typical KPIs for aircraft engine parts manufacturing and support contracts include on-time delivery rates, defect rates (quality of manufactured parts), adherence to specifications, and responsiveness to urgent requirements. Contractor performance is generally monitored by the Defense Contract Management Agency (DCMA) or the contracting activity (Defense Logistics Agency in this case). Monitoring involves regular reviews of delivery schedules, quality inspections, and technical compliance. Performance clauses within the contract may also stipulate remedies or incentives based on meeting or failing to meet these KPIs.
What is the risk assessment associated with a sole-source award for critical aircraft engine parts?
A sole-source award for critical aircraft engine parts carries several inherent risks. Firstly, the lack of competition can lead to inflated pricing, as the government does not benefit from multiple bids driving down costs. Secondly, there's a risk of reduced innovation and responsiveness, as the contractor may face less pressure to improve processes or offer new solutions. Thirdly, dependence on a single supplier can create supply chain vulnerabilities; any disruption at the contractor's facility could significantly impact military readiness. Finally, without competitive benchmarking, it's harder to ensure the government is receiving the best possible value and quality over the long term.
What is the strategic importance of this contract within the broader context of DoD aviation readiness?
This contract is strategically important as it ensures the continued availability of critical parts for military aircraft engines. The Department of Defense relies on a robust and reliable supply chain for these components to maintain its operational fleet. Ensuring access to these parts directly impacts aviation readiness, enabling aircraft to be mission-capable when needed. The sole-source nature, while raising cost concerns, might stem from the highly specialized nature of GE's engine technology, where they are the sole manufacturer or possess unique proprietary knowledge. Therefore, this contract likely supports the sustainment of specific, vital aircraft platforms essential for national security.
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
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: $47,394,855
Exercised Options: $47,394,855
Current Obligation: $47,394,855
Actual Outlays: $34,993,362
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX19D9400
IDV Type: IDC
Timeline
Start Date: 2020-12-14
Current End Date: 2021-12-30
Potential End Date: 2021-12-30 00:00:00
Last Modified: 2021-08-05
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