DLA awards $67.8M for aircraft engine parts, with General Electric Company as sole source
Contract Overview
Contract Amount: $67,358,053 ($67.4M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-05-08
End Date: 2025-05-31
Contract Duration: 388 days
Daily Burn Rate: $173.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8510615963!PBL MATERIAL GE
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $67.4 million to GENERAL ELECTRIC COMPANY for work described as: 8510615963!PBL MATERIAL GE Key points: 1. Value appears fair given the specialized nature of aircraft engine components. 2. Sole-source award limits price discovery and potential for competitive savings. 3. Contract duration of over a year suggests ongoing operational needs. 4. Performance is tied to critical defense logistics, indicating high stakes. 5. Positioned within the aerospace and defense manufacturing sector.
Value Assessment
Rating: fair
The award of $67.8 million to General Electric Company for aircraft engine parts appears to be within a reasonable range for specialized defense components. However, without a competitive bidding process, it is difficult to definitively benchmark the value against market rates or alternative suppliers. The firm fixed-price contract type provides cost certainty for the government, but the lack of competition raises questions about whether the most advantageous pricing was secured.
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 specific manufacturer's product is required, or when only one responsible source is available. The lack of competition means that the government did not benefit from multiple bids, which could have driven down prices through a more robust price discovery mechanism.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The sole-source nature prevents the government from leveraging market competition to achieve cost savings.
Public Impact
Military branches relying on specific aircraft engines will receive necessary parts. Ensures continued operational readiness for critical air assets. Supports the supply chain for aviation maintenance and repair. Impacts the aerospace manufacturing workforce employed by General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing opportunities.
- Potential for price escalation without market checks.
- Dependence on a single supplier for critical components.
Positive Signals
- General Electric is a known entity with established manufacturing capabilities.
- Firm fixed-price contract provides cost predictability.
- Award supports ongoing defense readiness.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine and engine parts. This is a highly specialized and capital-intensive industry dominated by a few major players. The market for such components is often characterized by long lead times, high barriers to entry, and significant R&D investment. Benchmarking spending in this area requires comparison to similar sole-source or limited-competition awards for proprietary aerospace parts.
Small Business Impact
This contract does not appear to involve a small business set-aside. Given the sole-source nature and the likely specialized requirements for aircraft engine parts, it is improbable that small businesses would be primary awardees or significant subcontractors unless they are direct suppliers to General Electric. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within GE's supply chain.
Oversight & Accountability
The contract is subject to standard federal procurement oversight. As a sole-source award, it may receive additional scrutiny from agencies like the Defense Contract Audit Agency (DCAA) to ensure pricing is fair and reasonable. Transparency is limited by the lack of public competition details, but contract modifications and performance reports would be subject to review.
Related Government Programs
- Aircraft Engine Maintenance and Repair
- Defense Logistics Agency Procurement
- Sole-Source Defense Contracts
- Aerospace Component Manufacturing
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
Tags
defense, dla, general-electric-company, aircraft-engine-parts, sole-source, firm-fixed-price, delivery-order, ohio, major-contract, aerospace, manufacturing
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $67.4 million to GENERAL ELECTRIC COMPANY. 8510615963!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 $67.4 million.
What is the period of performance?
Start: 2024-05-08. End: 2025-05-31.
What is General Electric Company's track record with the Defense Logistics Agency and similar entities for aircraft engine parts?
General Electric Company has a long-standing and extensive history of supplying aircraft engines and parts to the Department of Defense, including the Defense Logistics Agency (DLA). Their track record is generally characterized by extensive experience and established relationships within the defense aerospace sector. DLA, in particular, relies on GE for critical engine components for various military aircraft platforms. While specific performance metrics for this particular contract are not yet available, GE's overall history suggests a capacity to meet demanding military specifications. However, past performance reviews and any documented issues or successes with previous contracts would provide a more granular understanding of their reliability and quality assurance in delivering these specialized parts.
How does the $67.8 million award compare to historical spending on similar aircraft engine parts by the DLA or other defense agencies?
Benchmarking this $67.8 million award requires comparing it to historical spending on similar, specialized aircraft engine parts, particularly those procured on a sole-source or limited-competition basis. Given that aircraft engines and their components are high-value, technologically advanced items, individual contract awards can vary significantly based on the specific engine model, part complexity, quantity, and duration. Awards in the tens of millions are not uncommon for major component overhauls or significant part procurements for military aviation. To provide a precise comparison, one would need to identify contracts for the same or comparable engine types and part categories (e.g., turbine blades, fuel nozzles) awarded over the past several years. Analyzing the average price per unit or total contract value for similar sole-source procurements would help determine if this award represents a fair market value or if it deviates significantly.
What are the primary risks associated with a sole-source award for critical aircraft engine parts?
The primary risks associated with a sole-source award for critical aircraft engine parts revolve around cost, innovation, and supply chain resilience. Without competition, there is a reduced incentive for the sole provider to offer the lowest possible price, potentially leading to higher costs for the government and taxpayers. Furthermore, the lack of competitive pressure can stifle innovation, as the contractor may face less urgency to develop more efficient or advanced components. Supply chain risk is also amplified; the government becomes entirely dependent on one supplier, making it vulnerable to production disruptions, quality issues, or the contractor's business decisions. This dependence can also limit flexibility if alternative or improved parts become available from other sources.
What is the expected program effectiveness or impact of receiving these aircraft engine parts?
The expected program effectiveness hinges on ensuring the continued operational readiness and safety of military aircraft that utilize these specific engines. By procuring these essential parts, the Defense Logistics Agency (DLA) aims to prevent aircraft downtime due to component failure or the need for scheduled maintenance. This directly supports the warfighter's ability to conduct missions by ensuring that aircraft are available and functioning reliably. The impact is therefore critical for national defense, enabling air superiority, rapid deployment, and logistical support. Effective delivery of these parts contributes to reduced maintenance costs over the long term by preventing more catastrophic failures and ensuring optimal engine performance.
What are the historical spending patterns for aircraft engine parts by the DLA, and how does this award fit within those trends?
Historical spending patterns by the DLA on aircraft engine parts are substantial, reflecting the continuous need to maintain a large and diverse fleet of military aircraft. The DLA manages a vast inventory and procures a wide array of components, from routine consumables to highly specialized, long-lead-time items like engine parts. Spending in this category often fluctuates based on fleet modernization programs, operational tempo, and the lifecycle of specific aircraft. Awards for engine parts can range from small, individual component replacements to multi-million dollar contracts for major overhauls or bulk part procurements. This $67.8 million award appears to be a significant, but not unprecedented, expenditure for critical engine components, likely supporting a specific engine type or a defined period of demand within the DLA's overall sustainment strategy for aviation assets.
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: 1 NEUMANN WAY, CINCINNATI, OH, 45215
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: $67,358,053
Exercised Options: $67,358,053
Current Obligation: $67,358,053
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX23D9420
IDV Type: IDC
Timeline
Start Date: 2024-05-08
Current End Date: 2025-05-31
Potential End Date: 2025-05-31 00:00:00
Last Modified: 2024-12-06
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