General Electric Company awarded $81.7M for PBL Service Support, a sole-source contract for aircraft parts
Contract Overview
Contract Amount: $81,706,828 ($81.7M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2019-12-05
End Date: 2020-06-01
Contract Duration: 179 days
Daily Burn Rate: $456.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8507020730!PBL SERVICE SUPPORT
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $81.7 million to GENERAL ELECTRIC COMPANY for work described as: 8507020730!PBL SERVICE SUPPORT Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Limited competition suggests a lack of market pressure to drive down costs for essential aircraft parts. 3. The contract duration of 179 days is relatively short, potentially indicating a need for ongoing, episodic support. 4. Performance is tied to a specific North American Industry Classification System (NAICS) code for aircraft parts manufacturing. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor but requires careful baseline setting. 6. The absence of small business set-aside flags indicates this contract was not specifically targeted for small business participation.
Value Assessment
Rating: questionable
Benchmarking the value of this $81.7 million contract is challenging due to its sole-source nature and specific focus on PBL Service Support for aircraft parts. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The fixed-firm price structure implies the government agreed to a specific price, but the lack of competition means there was no external validation of this price against alternatives. Further analysis would require comparing the scope of services and the specific parts covered to similar sole-source contracts or historical pricing for these components, which is not readily available in the provided data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or authorized by statute. The lack of competition means there were no other bidders, and therefore no direct price comparison or negotiation leverage derived from a competitive process. This approach can be justified for specialized services or proprietary parts, but it limits the government's ability to explore potentially lower-cost alternatives or innovative solutions from a broader market.
Taxpayer Impact: For taxpayers, a sole-source award means the government did not benefit from the cost savings that typically arise from a competitive bidding process. This could potentially lead to higher prices than might be achieved in an open market, as the contractor faces less pressure to offer the most competitive rate.
Public Impact
The primary beneficiaries are likely entities within the Department of Defense requiring support for specific aircraft parts. The services delivered are crucial for maintaining the operational readiness of military aircraft. The geographic impact is primarily tied to the operational locations of the supported aircraft and maintenance facilities. Workforce implications include the need for skilled personnel to provide the specialized PBL service support.
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 justification for sole-source award.
- Potential for contractor lock-in due to specialized nature of PBL service support.
- Short contract duration may indicate a need for frequent renegotiations or extensions.
Positive Signals
- Firm Fixed Price contract shifts cost overrun risk to the contractor.
- Award to a known entity (General Electric Company) may imply established performance history.
- PBL (Performance-Based Logistics) support can lead to improved readiness and reduced lifecycle costs if structured effectively.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically related to aircraft parts and support services. The market for such specialized components and maintenance is often characterized by high barriers to entry, proprietary technology, and a limited number of qualified suppliers. Spending in this area is critical for national security and maintaining military readiness. Comparable spending benchmarks would typically involve analyzing other PBL contracts for similar aircraft platforms or other sole-source awards for specialized defense components.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses stemming from a specific set-aside requirement. The prime contractor, General Electric Company, may engage small businesses as subcontractors, but this is not mandated by the contract terms as presented. The absence of a small business focus means that opportunities for small business participation in this specific award are not guaranteed.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. Mechanisms for oversight would include contract performance reviews, audits, and monitoring of deliverables against the firm fixed price agreement. Transparency is assessed by the availability of contract details and justifications for sole-source awards. The IG's office would investigate any allegations of fraud, waste, or abuse related to the contract's execution.
Related Government Programs
- Defense Logistics Agency Procurement
- Aircraft Parts and Auxiliary Equipment Manufacturing
- Performance-Based Logistics Contracts
- Sole-Source Defense Contracts
- General Electric Company Contracts
Risk Flags
- Sole-source award lacks competitive justification.
- Potential for inflated pricing due to lack of competition.
- Short contract duration may indicate an interim or limited-scope requirement.
- Limited transparency on the specific services covered under 'PBL Service Support'.
Tags
defense, department-of-defense, defense-logistics-agency, sole-source, firm-fixed-price, aircraft-parts, pbl-service-support, general-electric-company, other-aircraft-parts-and-auxiliary-equipment-manufacturing, ohio, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $81.7 million to GENERAL ELECTRIC COMPANY. 8507020730!PBL SERVICE SUPPORT
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 $81.7 million.
What is the period of performance?
Start: 2019-12-05. End: 2020-06-01.
What is the historical spending pattern for PBL Service Support contracts awarded to General Electric Company by the Department of Defense?
Analyzing historical spending patterns for PBL Service Support contracts awarded to General Electric Company by the Department of Defense requires access to a comprehensive federal procurement database. Without such data, it's impossible to provide specific figures. However, a general trend in defense procurement has been an increasing reliance on Performance-Based Logistics (PBL) to improve weapon system readiness and reduce total ownership costs. General Electric, as a major defense contractor, likely has a significant portfolio of such contracts across various platforms. A detailed analysis would involve querying databases like FPDS-NG or USAspending for contracts with similar Product Service Codes (PSCs) and contract types awarded to GE over several fiscal years, looking for trends in award values, durations, and agencies.
How does the awarded price of $81.7 million compare to similar sole-source contracts for aircraft parts and support?
Directly comparing the $81.7 million award to similar sole-source contracts for aircraft parts and support is challenging without specific details on the exact nature of the 'PBL Service Support,' the specific aircraft platforms involved, and the duration of the contract. Sole-source contracts inherently lack a competitive benchmark. To make a meaningful comparison, one would need to identify other sole-source awards for comparable PBL services on similar military aircraft, considering factors like the number of flight hours supported, the types of parts included, and the scope of maintenance. Benchmarking against competitively awarded contracts for similar services would also be valuable, though the sole-source nature here limits direct price parity.
What specific risks are associated with sole-source contracts for critical aircraft components like those covered by this award?
Sole-source contracts for critical aircraft components present several risks. Foremost is the risk of paying inflated prices due to the absence of competition, which can lead to inefficient use of taxpayer funds. There's also a risk of reduced innovation, as the sole provider may have less incentive to develop cost-saving improvements or new technologies. Contractor performance risk can be heightened if the government has limited leverage to enforce stringent performance standards or switch providers if issues arise. Furthermore, reliance on a single source can create supply chain vulnerabilities, especially if the contractor faces production issues, financial instability, or geopolitical disruptions. Finally, the justification process for sole-source awards can be complex and subject to scrutiny, potentially leading to protests or delays.
What is the typical performance period for PBL Service Support contracts in the defense sector, and how does this contract's duration compare?
The performance period for Performance-Based Logistics (PBL) Service Support contracts in the defense sector can vary significantly depending on the complexity of the system, the expected operational tempo, and the desired lifecycle support. Contracts can range from a few years to over a decade, often with options for extension. This specific contract has a duration of 179 days (approximately six months). This relatively short duration suggests it might be an interim solution, a bridge contract, or cover a specific, limited-scope support requirement rather than long-term sustainment. Longer-term PBL contracts are generally preferred for achieving maximum lifecycle cost savings and readiness improvements.
What are the implications of the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code for this contract?
The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicates that the primary business activity related to this contract involves the production or support of parts and auxiliary equipment for aircraft, which are not elsewhere classified. This suggests the contract is focused on specific components or systems that fall under this broad manufacturing category. It implies that the contractor is expected to provide or support items integral to aircraft operation, maintenance, or performance, beyond engines or complete airframes. This classification helps in understanding the technical domain of the contract and comparing it to other procurements within the aerospace manufacturing sector.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 NEUMANN WAY, CINCINNATI, OH, 45215
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $81,706,828
Exercised Options: $81,706,828
Current Obligation: $81,706,828
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX15D9412
IDV Type: IDC
Timeline
Start Date: 2019-12-05
Current End Date: 2020-06-01
Potential End Date: 2020-06-01 00:00:00
Last Modified: 2020-04-13
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