DoD's $281.7M contract for aircraft engine parts awarded to General Electric Company
Contract Overview
Contract Amount: $28,178,072 ($28.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-12-16
End Date: 2025-12-31
Contract Duration: 380 days
Daily Burn Rate: $74.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8511074837!PBL MATERIAL GE
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $28.2 million to GENERAL ELECTRIC COMPANY for work described as: 8511074837!PBL MATERIAL GE Key points: 1. Value-for-money assessment indicates potential for cost savings through competitive bidding. 2. Competition dynamics show a sole-source award, raising concerns about price discovery. 3. Risk indicators include reliance on a single supplier for critical components. 4. Performance context suggests a need for robust oversight to ensure timely delivery and quality. 5. Sector positioning highlights the critical role of engine parts in maintaining military readiness.
Value Assessment
Rating: questionable
The contract's value of $281.7 million for aircraft engine parts warrants scrutiny. Without competitive bidding, it is difficult to benchmark this price against market rates or similar contracts. The firm fixed-price structure offers some cost certainty, but the lack of competition suggests potential overpayment. Further analysis of historical pricing for similar components and the justification for a sole-source award is needed to fully assess value.
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 approach bypasses the competitive process, which typically involves multiple bidders vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less favorable pricing and reduced innovation compared to full and open competition.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. The lack of bidding limits the government's ability to secure the best possible price and terms.
Public Impact
The primary beneficiaries are the Department of Defense and its aviation units, ensuring operational readiness. Services delivered include the provision of essential aircraft engine parts, crucial for maintenance and repair. Geographic impact is national, supporting military bases and operations across the United States. Workforce implications include continued employment for skilled manufacturing and logistics personnel at General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings.
- Lack of transparency in the justification for sole-source procurement.
- Potential for vendor lock-in and reduced leverage in future negotiations.
- Dependence on a single supplier for critical aircraft components.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government.
- General Electric is a known entity with established manufacturing capabilities.
- Contract duration allows for sustained supply chain support.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant R&D investment. Aircraft engine manufacturing is a specialized niche within this sector, dominated by a few key players like General Electric. This contract for engine parts fits within the broader defense logistics and maintenance ecosystem, ensuring the operational readiness of military aircraft. Comparable spending benchmarks are difficult to establish without competitive data, but the scale of this award indicates its criticality.
Small Business Impact
This contract does not appear to include a small business set-aside. Given the sole-source nature and the specialized products involved, it is unlikely that significant subcontracting opportunities for small businesses will be mandated or readily available through this specific award. The focus is on a large, established prime contractor.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Logistics Agency (DLA) and relevant Department of Defense contracting officers. Accountability measures will focus on delivery schedules, quality control of parts, and adherence to the firm fixed-price terms. Transparency is limited due to the sole-source nature, but contract modifications and performance reports should be accessible through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Aircraft Engine Maintenance and Repair
- Defense Logistics Support
- Military Aircraft Parts Procurement
- Sole-Source Defense Contracts
Risk Flags
- Sole-source award lacks competitive justification.
- Potential for inflated pricing due to lack of competition.
- Dependency on a single supplier for critical components.
Tags
defense, department-of-defense, defense-logistics-agency, sole-source, aircraft-engine-parts, firm-fixed-price, general-electric, original-equipment-manufacturer, supply-chain, military-readiness, massachusetts, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.2 million to GENERAL ELECTRIC COMPANY. 8511074837!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 $28.2 million.
What is the period of performance?
Start: 2024-12-16. End: 2025-12-31.
What is General Electric's track record with the Department of Defense for similar aircraft engine parts?
General Electric Company has a long-standing and extensive track record of supplying aircraft engines and parts to the Department of Defense. They are a primary Original Equipment Manufacturer (OEM) for many military aircraft platforms. Historical data indicates consistent delivery of components, though specific performance metrics for past contracts, such as on-time delivery rates, defect rates, and price competitiveness, would require detailed analysis of individual contract awards and performance reports. Their established position suggests a high level of technical capability but also raises questions about the necessity of sole-source awards if competition could be fostered.
How does the pricing of this contract compare to similar sole-source awards for aircraft engine parts?
Benchmarking the pricing of this $281.7 million sole-source contract against similar awards is challenging without access to detailed cost breakdowns and justifications for the sole-source determination. Generally, sole-source contracts tend to be more expensive than competitively awarded ones due to the lack of price pressure. To assess value, one would need to compare the per-unit cost of specific parts against historical data for the same or equivalent parts, or against prices offered by other potential suppliers if they exist, even if not formally solicited. The firm fixed-price nature provides some cost certainty, but the absolute price level remains a key area for scrutiny.
What are the primary risks associated with this sole-source award for critical aircraft engine parts?
The primary risks associated with this sole-source award include potential overpayment due to the absence of competition, leading to inefficient use of taxpayer funds. There is also a risk of vendor lock-in, where the government becomes overly dependent on General Electric, potentially limiting future negotiation leverage and flexibility. Furthermore, a sole-source award can stifle innovation, as there is less incentive for the contractor to develop more cost-effective or technologically advanced solutions when competition is not a factor. Finally, reliance on a single supplier for critical components can create supply chain vulnerabilities if the contractor experiences production issues or disruptions.
What is the expected effectiveness of this contract in ensuring the operational readiness of military aircraft?
The effectiveness of this contract in ensuring military aircraft operational readiness hinges on the timely and quality delivery of the specified engine parts by General Electric. As a sole-source award, the government is relying entirely on GE's capacity and commitment to fulfill the contract requirements. Assuming GE meets its obligations, the contract should contribute positively to maintaining the fleet's airworthiness. However, the lack of competitive pressure means that the government must rely heavily on robust contract management, performance monitoring, and quality assurance processes to ensure that the parts meet stringent military specifications and are delivered as needed to prevent readiness shortfalls.
What are the historical spending patterns for aircraft engine parts by the Defense Logistics Agency?
Historical spending patterns for aircraft engine parts by the Defense Logistics Agency (DLA) typically show significant and consistent investment, reflecting the critical nature of aviation assets to national defense. DLA manages a vast supply chain for a wide array of military equipment, including complex aerospace components. Spending in this category often involves both competitively awarded contracts for common parts and sole-source or limited-competition awards for proprietary or highly specialized components, particularly from Original Equipment Manufacturers (OEMs) like General Electric. Analyzing past DLA spending data would reveal trends in contract values, types of awards (competitive vs. sole-source), and the distribution of spending across different engine types and aircraft platforms.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
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: $28,178,072
Exercised Options: $28,178,072
Current Obligation: $28,178,072
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX19D9400
IDV Type: IDC
Timeline
Start Date: 2024-12-16
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2025-07-21
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