DoD's $41.1M contract for aircraft engine parts manufacturing awarded to General Electric Company
Contract Overview
Contract Amount: $41,910,837 ($41.9M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2021-12-16
End Date: 2022-08-31
Contract Duration: 258 days
Daily Burn Rate: $162.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8508754553!PBL SERVICE SUPPORT GE
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $41.9 million to GENERAL ELECTRIC COMPANY for work described as: 8508754553!PBL SERVICE SUPPORT GE Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. High value contract for critical defense logistics support. 3. Performance period is relatively short, indicating a potential need for ongoing procurement. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. No small business set-aside was utilized for this procurement. 6. The contractor, General Electric Company, is a major player in the aerospace industry.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without detailed cost breakdowns or comparisons to similar sole-source procurements. Given the sole-source nature, it's difficult to assess if the price reflects competitive market rates. The firm fixed price structure provides cost certainty for the government, but the absence of competition raises questions about optimal value realization. Further analysis of historical pricing for similar parts and services from General Electric would be necessary for a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces.
Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. Sole-source awards can sometimes lead to higher costs compared to competed contracts.
Public Impact
The Department of Defense benefits from the continued availability of critical aircraft engine parts and support services. This contract ensures the operational readiness of military aircraft. The geographic impact is primarily within the United States, supporting defense logistics. The contract supports jobs within the aerospace manufacturing and support sectors, particularly at General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential cost savings for the government.
- Lack of transparency in pricing due to non-competitive nature.
- Potential for over-reliance on a single contractor for critical components.
Positive Signals
- Firm Fixed Price contract shifts cost risk to the contractor.
- General Electric is a well-established provider of aircraft engines and parts.
- Contract supports critical defense logistics and operational readiness.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a specialized area of the broader aerospace industry. This sector is characterized by high barriers to entry, significant R&D investment, and a limited number of major global players like General Electric. Defense spending often drives a substantial portion of demand in this niche market, with contracts typically being long-term and high-value due to the complexity and criticality of the products.
Small Business Impact
This contract did not include a small business set-aside, indicating that the procurement was not specifically targeted to encourage participation by small businesses. Consequently, there are no direct subcontracting requirements for small businesses mandated by this award. The absence of a set-aside means that large businesses like General Electric are the primary recipients, with potential downstream impacts on the small business ecosystem being indirect.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA) and the Department of Defense. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to delivery. Transparency is limited due to the sole-source nature, but contract award details are publicly available. The Inspector General of the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- Aircraft Engine Maintenance and Repair
- Defense Logistics Support Services
- Aerospace Parts Manufacturing
- Military Aircraft Fleet Support
Risk Flags
- Sole-source award
- Lack of competition
- Potential for price escalation
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, general-electric, massachusetts, delivery-order, not-competed
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.9 million to GENERAL ELECTRIC COMPANY. 8508754553!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 $41.9 million.
What is the period of performance?
Start: 2021-12-16. End: 2022-08-31.
What is General Electric Company's track record with the Department of Defense for similar contracts?
General Electric Company has a long-standing and extensive track record of providing aircraft engines, parts, and support services to the Department of Defense. They are a primary contractor for numerous military aircraft platforms, including fighter jets, bombers, and transport planes. Their history with the DoD includes numerous large-scale contracts, delivery orders, and sustainment programs. While specific performance metrics for past contracts are not detailed here, GE's continued role as a major defense supplier suggests a generally satisfactory performance history in delivering critical aviation components and services to the military.
How does the $41.1 million value compare to other sole-source procurements for aircraft engine parts?
The $41.1 million value for this contract is substantial, reflecting the high cost of specialized aerospace components and the critical nature of defense logistics. Sole-source procurements in this sector can vary widely in value, from smaller, specialized part orders to multi-billion dollar long-term sustainment agreements. Without access to a comprehensive database of all sole-source aircraft engine parts contracts, a direct comparison is difficult. However, this amount is consistent with significant, but not unprecedented, sole-source awards for critical defense hardware and support services where competition is limited.
What are the primary risks associated with a sole-source award of this magnitude?
The primary risks associated with a sole-source award of this magnitude include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a heightened dependence on a single supplier for critical components. If General Electric faces production issues, supply chain disruptions, or decides to significantly increase prices in future negotiations, the DoD has limited alternatives. This can impact budget predictability and operational readiness if the parts are essential and cannot be sourced elsewhere.
How does the Firm Fixed Price (FFP) contract type benefit the government in this context?
The Firm Fixed Price (FFP) contract type benefits the government by shifting the majority of cost risk to the contractor, General Electric Company. Under an FFP agreement, the price is set and not subject to adjustment based on the contractor's cost experience. This provides the government with cost certainty and predictability, making budgeting more straightforward. It incentivizes the contractor to manage its costs efficiently to maintain profitability. For critical parts where performance is paramount and cost overruns are a concern, FFP is often preferred by the government.
What is the historical spending pattern for aircraft engine parts by the Defense Logistics Agency?
The Defense Logistics Agency (DLA) historically spends billions of dollars annually on aviation parts and related services to support the U.S. military's diverse fleet. Spending patterns are influenced by factors such as the operational tempo of aircraft, modernization programs, depot maintenance schedules, and the retirement or introduction of new aircraft types. DLA often procures parts through a mix of competitive solicitations and sole-source awards for specialized or proprietary components. The specific amount spent on aircraft engine parts can fluctuate year-to-year based on demand and strategic priorities, but it remains a significant portion of DLA's overall aviation budget.
What are the implications of the contract duration (258 days) for future procurement needs?
The relatively short contract duration of 258 days (approximately 8.5 months) suggests that this award is likely a short-term solution or a bridge contract. This implies that the Defense Logistics Agency anticipates a need for ongoing or longer-term support for these aircraft engine parts. It may indicate that a more comprehensive, potentially longer-duration contract is being developed or that the demand for these parts is subject to frequent changes. This short timeframe necessitates proactive planning for subsequent procurements to ensure continuous supply and avoid potential gaps.
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: $41,910,837
Exercised Options: $41,910,837
Current Obligation: $41,910,837
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX20D9445
IDV Type: IDC
Timeline
Start Date: 2021-12-16
Current End Date: 2022-08-31
Potential End Date: 2022-08-31 00:00:00
Last Modified: 2022-09-24
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