General Electric Company awarded $93.7M for PBL Service Support, a sole-source contract for aircraft engine parts
Contract Overview
Contract Amount: $93,691,517 ($93.7M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-09-23
End Date: 2021-12-31
Contract Duration: 464 days
Daily Burn Rate: $201.9K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8507670689!PBL SERVICE SUPPORT
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $93.7 million to GENERAL ELECTRIC COMPANY for work described as: 8507670689!PBL SERVICE SUPPORT Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. Focus on aircraft engine parts manufacturing suggests a critical, specialized need. 3. Contract duration of 464 days indicates a medium-term support requirement. 4. The contract is a delivery order under a larger indefinite-delivery vehicle. 5. No small business set-aside was applied, potentially limiting broader participation.
Value Assessment
Rating: questionable
The contract value of $93.7 million for aircraft engine parts support appears substantial. Without a competitive bidding process, it is difficult to benchmark the value for money. The fixed-price nature of the contract provides some cost certainty, but the lack of competition means the government may not have secured the lowest possible price. Further analysis would require comparing this award to similar sole-source contracts for comparable engine parts or services.
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 standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances, such as when only one supplier possesses the necessary capabilities or proprietary technology, they inherently limit price discovery and potentially lead to higher costs for the government.
Taxpayer Impact: Sole-source awards mean taxpayers may not be benefiting from the most competitive pricing available in the market, as the absence of competition reduces pressure on the contractor to offer the lowest possible cost.
Public Impact
The Department of Defense benefits from continued support for its aircraft engine parts. This contract ensures the availability of critical components for military aviation operations. The contract's impact is primarily within the defense sector, supporting military readiness. The workforce implications are likely concentrated within General Electric's manufacturing and support facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated pricing.
- Sole-source nature limits opportunities for other qualified suppliers.
- Dependence on a single supplier could pose long-term supply chain risks.
Positive Signals
- Ensures continued availability of critical aircraft engine parts.
- General Electric is a known entity with established expertise in this area.
- Fixed-price contract provides some cost predictability.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine components. The market for such specialized parts is often dominated by a few key original equipment manufacturers (OEMs) like General Electric. While the overall market size for aircraft engine parts is significant, the ability to compete for sole-source contracts is limited to the OEM or entities with specific licensing or technical data rights. Benchmarking spending in this area is challenging due to the proprietary nature of many components and the specialized manufacturing processes involved.
Small Business Impact
This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The sole-source nature of the award further limits opportunities for small businesses to participate directly. This means the primary economic benefit will flow to the large prime contractor, General Electric Company, with limited direct impact on the small business ecosystem unless GE voluntarily subcontracts.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. Mechanisms would include contract performance monitoring, financial audits, and compliance reviews. Transparency is often limited for sole-source awards, but reporting requirements under the contract and agency oversight processes would provide some level of accountability. The effectiveness of oversight depends on the rigor of these processes and the availability of independent cost and performance data.
Related Government Programs
- Aircraft Engine Maintenance and Repair
- Aerospace Component Manufacturing
- Defense Logistics Support Services
- Indefinite Delivery Indefinite Quantity (IDIQ) Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Supply chain dependency
Tags
defense, department-of-defense, defense-logistics-agency, general-electric-company, sole-source, aircraft-engine-parts, manufacturing, firm-fixed-price, delivery-order, indefinite-delivery-vehicle, massachusetts, pbl-service-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $93.7 million to GENERAL ELECTRIC COMPANY. 8507670689!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 $93.7 million.
What is the period of performance?
Start: 2020-09-23. End: 2021-12-31.
What is General Electric Company's track record with sole-source defense contracts?
General Electric Company, as a major defense contractor and original equipment manufacturer (OEM) for numerous aircraft engines, has a history of receiving sole-source contracts. These often arise from the need for proprietary parts, specialized maintenance, or unique support services directly related to their manufactured products. While specific details vary by contract, such awards are common when a single entity holds the necessary technical data, intellectual property, or manufacturing capabilities. The DLA and other defense agencies frequently rely on GE for sustainment of their fleets, leading to sole-source awards for critical components and services where competition is not feasible or cost-effective due to the specialized nature of the equipment.
How does the pricing of this sole-source contract compare to potentially competitive bids?
Direct comparison of pricing for this sole-source contract to potentially competitive bids is not possible with the provided data. Sole-source awards inherently lack the price discovery mechanism that competition provides. While the contract is firm fixed-price, indicating a set cost, the absence of multiple bids means the government did not benefit from vendors vying to offer the lowest price. To assess value, one would need to benchmark against historical sole-source awards for similar parts or services, or against prices for commercially available equivalents if applicable. Without this, it's presumed the price reflects the unique capabilities and market position of General Electric.
What are the primary risks associated with this sole-source contract for aircraft engine parts?
The primary risks associated with this sole-source contract include potential overpricing due to the lack of competition, and supply chain vulnerability stemming from reliance on a single provider. If General Electric faces production issues, labor disputes, or unforeseen cost increases, the Defense Logistics Agency (DLA) has limited alternative options for securing these critical aircraft engine parts in the short term. Furthermore, the absence of competitive pressure might reduce incentives for the contractor to innovate or optimize costs over the contract's lifecycle. Ensuring robust oversight and performance monitoring becomes crucial to mitigate these risks.
How effective is the Defense Logistics Agency in managing sole-source contracts for specialized parts?
The Defense Logistics Agency (DLA) has extensive experience in managing a wide array of contracts, including sole-source awards for specialized defense articles like aircraft engine parts. Their effectiveness hinges on several factors: the quality of their technical expertise in evaluating the necessity of sole-source awards, their negotiation capabilities to secure fair pricing even without competition, and their contract administration processes to ensure timely delivery and quality. DLA often relies on established relationships with Original Equipment Manufacturers (OEMs) like General Electric, leveraging historical data and market intelligence. However, the inherent limitations of sole-source procurement mean that continuous vigilance and strong oversight are paramount to ensure taxpayer value.
What are the historical spending patterns for aircraft engine parts by the Department of Defense?
The Department of Defense (DoD) historically spends billions of dollars annually on aircraft engine parts, encompassing procurement, maintenance, repair, and overhaul services. This spending is driven by the large and diverse military aviation fleet, including fighter jets, bombers, transport aircraft, and helicopters. A significant portion of this spending is directed towards Original Equipment Manufacturers (OEMs) like General Electric, Rolls-Royce, and Pratt & Whitney, often through sole-source or limited-competition contracts due to the proprietary nature of engine technology. Spending patterns can fluctuate based on fleet readiness requirements, new aircraft programs, and sustainment needs for aging platforms. The data provided ($93.7M for PBL Service Support) represents a segment of this broader, substantial expenditure.
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: $93,691,517
Exercised Options: $93,691,517
Current Obligation: $93,691,517
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX20D9445
IDV Type: IDC
Timeline
Start Date: 2020-09-23
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2021-10-27
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