DoD's $61.4M contract for aircraft parts manufacturing services awarded to General Electric Company
Contract Overview
Contract Amount: $61,445,167 ($61.4M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-09-24
End Date: 2021-09-30
Contract Duration: 371 days
Daily Burn Rate: $165.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8507677567!PBL SERVICE SUPPORT GE
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $61.4 million to GENERAL ELECTRIC COMPANY for work described as: 8507677567!PBL SERVICE SUPPORT GE Key points: 1. Value for money is difficult to assess due to lack of competition and limited performance data. 2. Competition dynamics are heavily skewed towards sole-source, potentially limiting price discovery. 3. Risk indicators include sole-source award and a short performance period, suggesting potential urgency or limited planning. 4. Performance context is limited to a single delivery order, making trend analysis challenging. 5. Sector positioning is within aircraft parts manufacturing, a critical component of defense logistics.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and the absence of comparable bids. The firm fixed-price contract type offers some cost certainty, but without competitive data, it's difficult to ascertain if the pricing reflects fair market value. The limited duration of the contract also restricts the ability to evaluate long-term cost-effectiveness or identify potential cost savings through sustained performance.
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 responsible source can fulfill the requirement. The lack of multiple bidders means that price discovery through competitive bidding was not utilized, potentially leading to higher costs for the government compared to a competed contract.
Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible prices, potentially resulting in less favorable terms for taxpayers.
Public Impact
The Department of Defense benefits from the continued availability of essential aircraft parts and support services. Services delivered include manufacturing and support for aircraft components, crucial for maintaining military readiness. The geographic impact is primarily within Ohio, where the contractor is located. Workforce implications include the potential for sustained employment at General Electric's facilities in Ohio.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher prices.
- Limited performance data makes it hard to assess contractor efficiency.
- Short contract duration might indicate a reactive procurement rather than strategic planning.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Award to an established contractor like General Electric suggests a degree of reliability.
- Contract supports critical defense logistics needs.
Sector Analysis
The aerospace and defense manufacturing sector is characterized by high technological complexity and significant government procurement. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sub-sector, which is vital for maintaining the operational readiness of military aviation assets. Spending in this area is often driven by specific platform needs and sustainment requirements, with large, established companies like General Electric being key players.
Small Business Impact
This contract does not appear to have a small business set-aside. Given the sole-source nature and the contractor's size, there are no direct subcontracting implications for small businesses stemming from this specific award. However, the overall defense industrial base relies on a robust ecosystem of small businesses for component manufacturing and specialized services, which may be indirectly impacted by the contracting strategies of prime vendors.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the firm fixed-price structure, which places the cost risk on the contractor. Transparency is limited due to the sole-source award, but contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Aircraft Parts Manufacturing
- Defense Logistics Support
- Propulsion Systems Support
- Aerospace Component Manufacturing
Risk Flags
- Sole-source award
- Lack of competition
- Limited performance data available
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-parts, manufacturing, sole-source, firm-fixed-price, general-electric-company, ohio, other-aircraft-parts-and-auxiliary-equipment-manufacturing, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $61.4 million to GENERAL ELECTRIC COMPANY. 8507677567!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 $61.4 million.
What is the period of performance?
Start: 2020-09-24. End: 2021-09-30.
What is the historical spending pattern for similar aircraft parts and auxiliary equipment manufacturing services by the Department of Defense?
Historical spending on aircraft parts and auxiliary equipment manufacturing by the Department of Defense (DoD) is substantial, reflecting the continuous need to maintain and upgrade its vast fleet of aircraft. While specific figures for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) can fluctuate based on modernization programs and sustainment needs, the overall category consistently represents billions of dollars annually. For instance, in recent fiscal years, the DoD has allocated significant funds towards engine components, airframes, avionics, and related support services. This spending is often characterized by a mix of competitive solicitations for new platforms and sole-source or limited competition contracts for sustainment and specialized parts, particularly for legacy systems where original manufacturers hold proprietary knowledge or tooling. The trend generally shows a sustained demand, with peaks and troughs influenced by geopolitical events, budget allocations, and technological advancements.
How does the awarded price compare to market rates for similar aircraft parts and auxiliary equipment?
Directly comparing the awarded price of $61.4 million to market rates for similar aircraft parts and auxiliary equipment is challenging without more granular data on the specific items and services procured under this contract. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category is broad. Furthermore, the sole-source nature of this award means there was no competitive bidding process to establish a benchmark price. Generally, prices in the defense aerospace sector can be higher than commercial equivalents due to stringent quality control, specialized materials, unique design requirements, and the need for long-term sustainment support. Without access to the detailed line-item pricing, cost breakdowns, or data from comparable competitive contracts, a definitive assessment of whether this price is aligned with market rates is not feasible. The firm fixed-price structure does offer some cost control, but the absence of competition is a primary limitation in value assessment.
What is General Electric Company's track record with the Department of Defense for similar contracts?
General Electric Company (GE) has a long and extensive track record as a major contractor for the Department of Defense (DoD), particularly in areas related to aviation and propulsion. GE is a primary supplier of jet engines and related components for numerous military aircraft platforms, including fighter jets, bombers, transport planes, and helicopters. Their involvement often extends beyond manufacturing to include maintenance, repair, and overhaul (MRO) services, as well as integrated logistics support. The DoD frequently awards contracts to GE for engine sustainment, spare parts, and upgrades. While this specific contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' it aligns with GE's core competencies in the aerospace sector. Their history with the DoD is generally characterized by large-scale, long-term engagements, reflecting their critical role in supporting military aviation readiness. Performance on these contracts can vary, but GE is a well-established entity within the defense industrial base.
What are the potential risks associated with a sole-source award for critical aircraft parts?
Sole-source awards for critical aircraft parts carry several potential risks for the Department of Defense (DoD). Firstly, the absence of competition can lead to inflated prices, as the contractor faces less pressure to offer the most cost-effective solution. This can result in a higher financial burden on taxpayers. Secondly, it can reduce the incentive for the contractor to innovate or improve efficiency, as there is no competitive threat. Thirdly, reliance on a single source can create supply chain vulnerabilities; if the sole-source provider experiences production issues, quality control failures, or financial instability, the DoD's ability to procure essential parts could be severely disrupted, impacting aircraft availability and mission readiness. Lastly, it limits the government's ability to explore alternative solutions or technologies that might be offered by other potential suppliers.
How does this contract contribute to the overall readiness and sustainment of military aircraft fleets?
This contract, valued at approximately $61.4 million and awarded to General Electric Company, directly contributes to the readiness and sustainment of military aircraft fleets by ensuring the availability of necessary parts and manufacturing support. Aircraft, especially complex military platforms, require a continuous supply of high-quality components for both routine maintenance and unexpected repairs. By securing these parts through this contract, the Department of Defense (DoD) can mitigate potential grounding of aircraft due to component shortages. This supports the operational readiness of aircrews and units, enabling them to perform their missions effectively. Furthermore, consistent support for aircraft sustainment helps extend the service life of valuable military assets, potentially deferring the need for costly new acquisitions and optimizing the overall defense budget.
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: $61,445,167
Exercised Options: $61,445,167
Current Obligation: $61,445,167
Actual Outlays: $47,781,385
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $1,622,249
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: 2020-09-24
Current End Date: 2021-09-30
Potential End Date: 2021-09-30 00:00:00
Last Modified: 2025-04-24
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