DoD's $20.8M contract for aircraft engine parts to General Electric Company raises value and competition concerns
Contract Overview
Contract Amount: $20,871,876 ($20.9M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2025-12-17
End Date: 2026-03-31
Contract Duration: 104 days
Daily Burn Rate: $200.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8511817345!PBL MATERIAL GE
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $20.9 million to GENERAL ELECTRIC COMPANY for work described as: 8511817345!PBL MATERIAL GE Key points: 1. The contract's value appears high relative to its duration, suggesting potential for cost inefficiencies. 2. A sole-source award limits price discovery and may result in above-market rates. 3. The lack of competition is a significant risk indicator for taxpayer value. 4. Performance context is limited due to the nature of the award, making outcome assessment difficult. 5. This contract falls within the aerospace and defense manufacturing sector, a critical area for national security. 6. The use of a firm-fixed-price contract type is generally positive for cost control, but its effectiveness is undermined by the lack of competition.
Value Assessment
Rating: questionable
The contract value of $20.8 million over approximately 104 days (roughly 3.5 months) suggests a high daily burn rate. Without specific details on the parts or quantities, it's difficult to benchmark precisely. However, the absence of competitive bidding means there's no external validation of whether this price represents fair market value. Compared to similar sole-source awards for specialized aerospace components, this could be within a typical range, but the lack of competition prevents a definitive assessment of value for money.
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 is typically used when a unique capability or proprietary item is required, or in urgent situations. The lack of competition means that taxpayers did not benefit from the price reductions and innovation that typically arise from a competitive bidding process. It also limits the government's ability to explore alternative suppliers or solutions.
Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium for these aircraft engine parts, as there was no competitive pressure to drive down costs. This limits the efficient use of public funds.
Public Impact
The primary beneficiaries are the Department of Defense, specifically the Defense Logistics Agency, ensuring operational readiness of aircraft. The services delivered involve the provision of critical aircraft engine and engine parts. The geographic impact is likely national, supporting military aviation operations across various bases. Workforce implications are indirect, supporting manufacturing jobs within General Electric and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated pricing.
- Sole-source awards can reduce government leverage in negotiations.
- Dependence on a single supplier can create supply chain vulnerabilities.
- Limited transparency into the justification for sole-source procurement.
Positive Signals
- Firm-fixed-price contract type helps manage cost certainty.
- Awarding to a known entity like General Electric may leverage existing relationships and expertise.
- The contract duration is relatively short, limiting long-term financial exposure.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing industry (NAICS 336412), a specialized segment of the aerospace and defense sector. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality requirements. Spending in this area is critical for maintaining military readiness. Comparable spending benchmarks are difficult to establish without detailed part specifications, but large sole-source awards for specialized components are not uncommon in defense procurement, though they warrant scrutiny.
Small Business Impact
This contract does not appear to involve a small business set-aside, as indicated by 'ss': false and 'sb': false. General Electric Company is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The lack of small business participation in this sole-source contract means potential opportunities for small businesses in this supply chain are not being realized through this particular procurement.
Oversight & Accountability
Oversight for this contract would primarily fall under the Defense Logistics Agency and the Department of Defense's internal procurement review processes. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is limited by the sole-source nature of the award; the justification for this procurement method would be key to assessing accountability.
Related Government Programs
- Aircraft Engine Maintenance, Repair, and Overhaul
- Defense Logistics Agency Procurement
- Aerospace Component Manufacturing
- Military Aircraft Support Services
Risk Flags
- Sole-source award
- Lack of competition
- High daily expenditure rate
- Potential for price inflation
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, large-contract, national-security, aerospace
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.9 million to GENERAL ELECTRIC COMPANY. 8511817345!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 $20.9 million.
What is the period of performance?
Start: 2025-12-17. End: 2026-03-31.
What is the specific justification provided by the Defense Logistics Agency for awarding this contract to General Electric Company on a sole-source basis?
The provided data indicates the contract was awarded as 'NOT COMPETED' and has a contract type of 'sole-source'. Typically, sole-source justifications are required under federal acquisition regulations (FAR) when only one responsible source can provide the required supplies or services. Common reasons include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when a specific brand-name item is essential. For this contract, the specific justification would likely detail why General Electric Company is the only viable provider of these particular aircraft engine parts, potentially citing proprietary designs, specialized manufacturing processes, or critical integration requirements with existing military aircraft platforms. Without access to the official justification document (e.g., a Justification and Approval or J&A), the precise rationale remains speculative but is crucial for understanding the necessity of foregoing competition.
How does the per-unit cost or total cost of these aircraft engine parts compare to similar components procured competitively by the DoD or other agencies?
Direct comparison of per-unit costs is challenging without detailed specifications of the aircraft engine parts being procured under this $20.8 million contract. The data provided does not include itemized lists, quantities, or specific part numbers. However, the fact that this contract was awarded on a sole-source basis to General Electric Company inherently limits the ability to benchmark against competitive pricing. Competitive procurements typically result in lower prices due to market forces and bidder innovation. If similar parts were available from multiple manufacturers, a competitive process would likely yield a lower price than what might be negotiated with a single, sole-source provider. To perform a true comparison, one would need to identify comparable parts, their specifications, and pricing data from competitively awarded contracts within the DoD or other federal agencies, which is not available in the provided dataset.
What are the potential risks associated with relying on General Electric Company as the sole source for these critical aircraft engine parts?
Relying on General Electric Company as the sole source for these critical aircraft engine parts presents several potential risks. Firstly, there is a risk of price escalation over time, as the government lacks the leverage of competitive bidding to negotiate favorable terms. Secondly, supply chain disruptions could be more impactful; if GE faces production issues, delays, or quality control problems, the DoD's aircraft readiness could be significantly jeopardized without alternative suppliers. Thirdly, there's a risk of technological stagnation, as the absence of competition might reduce the incentive for GE to innovate or offer more cost-effective solutions. Finally, long-term dependence on a single supplier can reduce the government's flexibility and bargaining power in future procurement cycles, potentially leading to higher overall lifecycle costs for maintaining these aircraft engines.
What is the historical spending pattern for aircraft engine parts from General Electric Company by the Defense Logistics Agency?
The provided data includes 'br': 200691, which likely represents the year the contract was first awarded or the base year of a larger contract vehicle. This suggests a long-standing relationship between the Defense Logistics Agency (DLA) and General Electric Company for aircraft engine parts, potentially dating back to 2006. Without access to historical contract databases or specific DLA spending reports, it's impossible to quantify the total historical spending. However, the presence of this data point implies that DLA has procured similar items from GE for a considerable period. Analyzing past spending trends would require querying contract databases for all awards to GE under relevant NAICS codes (like 336412) and PSC codes related to aircraft engines and parts, looking at award amounts, contract types, and durations over multiple fiscal years to identify patterns, increases, or decreases in spending.
How does the contract duration of approximately 104 days (from Dec 2025 to Mar 2026) influence the assessment of value for money?
The relatively short contract duration of approximately 104 days (roughly 3.5 months) for a $20.8 million award means the government is committing a significant amount of funds over a brief period. This short timeframe can make it harder to achieve economies of scale or negotiate long-term price stability. For assessment of value for money, it suggests a potentially high immediate need or a specific, short-term requirement for these engine parts. While a firm-fixed-price contract provides cost certainty for this period, the high daily expenditure rate ($20.8M / ~104 days ≈ $200,000 per day) necessitates careful scrutiny of the unit prices and quantities involved. A longer duration might allow for more favorable pricing structures or phased delivery, but the current structure focuses on immediate fulfillment, potentially at a premium due to the lack of competitive pressure over this concentrated period.
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: $20,871,876
Exercised Options: $20,871,876
Current Obligation: $20,871,876
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: 2025-12-17
Current End Date: 2026-03-31
Potential End Date: 2026-03-31 00:00:00
Last Modified: 2025-12-23
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