DoD awards $26.5M for aircraft engine parts, with General Electric Company as sole source
Contract Overview
Contract Amount: $26,567,414 ($26.6M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2025-10-27
End Date: 2027-02-28
Contract Duration: 489 days
Daily Burn Rate: $54.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 8511723148!PBL MATERIAL GE
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $26.6 million to GENERAL ELECTRIC COMPANY for work described as: 8511723148!PBL MATERIAL GE Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long-term contract duration of 489 days suggests critical supply chain need. 3. Focus on aircraft engine parts indicates a specialized and high-value sector. 4. Fixed-price contract type shifts performance risk to the contractor. 5. Geographic concentration in Ohio for manufacturing. 6. No small business set-aside, potentially limiting broader economic participation.
Value Assessment
Rating: fair
The contract value of $26.5 million for aircraft engine parts appears substantial. However, without specific details on the exact parts or quantities, a direct value-for-money assessment is challenging. Benchmarking against similar sole-source contracts for specialized aerospace components would be necessary to determine if the pricing is competitive. The fixed-price nature of the contract provides cost certainty for the government, but the lack of competition raises concerns about potential overpayment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning only one bidder, General Electric Company, was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and fosters innovation. While sole-source awards are sometimes necessary for unique or proprietary items, they inherently reduce the government's ability to secure the best possible price and terms.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. The lack of competition means there's less incentive for the contractor to offer the lowest possible price.
Public Impact
The Department of Defense benefits from a secured supply of critical aircraft engine parts. The contract supports the operational readiness of military aircraft. The primary beneficiary is the Defense Logistics Agency, ensuring supply chain continuity. Workforce in Ohio is likely supported by this manufacturing contract. The aerospace manufacturing sector, specifically engine parts, receives a significant award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential cost savings for taxpayers.
- Lack of transparency in the sole-source justification process.
- Potential for contractor to leverage market dominance for higher prices.
- No small business participation noted, potentially excluding smaller innovative firms.
Positive Signals
- Fixed-price contract shifts cost risk to the contractor.
- Long-term award suggests a stable and predictable supply chain for critical components.
- General Electric Company is a known entity with established capabilities in this domain.
Sector Analysis
The aircraft engine and engine parts manufacturing sector is a highly specialized and capital-intensive industry, critical for both commercial and defense aviation. This contract falls within the broader aerospace and defense industrial base. Spending in this area is often characterized by long lead times, high research and development costs, and a limited number of qualified suppliers, often leading to sole-source or limited competition awards for specific components. Benchmarking would involve comparing this award to other sole-source procurements of similar engine components within the DoD.
Small Business Impact
The contract explicitly states that small business participation was not a factor ('sb': false). This indicates that the award was not set aside for small businesses, nor does it appear to include specific subcontracting goals for small businesses. Consequently, this contract may not directly contribute to the growth or support of the small business ecosystem within the aerospace manufacturing supply chain. Opportunities for small businesses to participate would likely be through indirect subcontracting relationships with the prime contractor, if any are established.
Oversight & Accountability
Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring contractor performance, compliance, and cost reasonableness. The Defense Logistics Agency (DLA) as the procuring agency also holds oversight responsibilities. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to standard government oversight mechanisms. Inspector General (IG) investigations could be initiated if specific allegations of fraud, waste, or abuse arise.
Related Government Programs
- Aircraft Maintenance and Repair
- Aerospace Manufacturing
- Defense Logistics Support
- Propulsion Systems
- Military Aircraft Parts
Risk Flags
- Sole-source award may indicate limited market competition.
- Lack of small business participation noted.
- Potential for price escalation without competitive bidding.
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, general-electric-company, ohio, large-contract, supply-chain
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.6 million to GENERAL ELECTRIC COMPANY. 8511723148!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 $26.6 million.
What is the period of performance?
Start: 2025-10-27. End: 2027-02-28.
What specific aircraft engine parts are being procured under this contract?
The provided data does not specify the exact aircraft engine parts being procured. The North American Industry Classification System (NAICS) code 336412, 'Aircraft Engine and Engine Parts Manufacturing,' indicates the general category. To understand the value and criticality, detailed specifications of the parts, their function, and the specific aircraft platforms they support would be necessary. This information is typically found in the contract's statement of work or technical exhibits, which are not included in the provided summary data.
How does the $26.5 million award compare to historical spending on similar aircraft engine parts by the DoD?
Without knowing the specific parts, a direct historical comparison is difficult. However, the Department of Defense consistently spends billions annually on aircraft sustainment, which includes engine maintenance and parts. General Electric is a major supplier for many DoD aircraft engines. Historical spending data for similar sole-source contracts for engine components from GE or other prime contractors would be needed to benchmark this $26.5 million award. Analyzing trends in pricing and volume for comparable parts over the past 5-10 years would provide context on whether this award represents an increase, decrease, or stable spending pattern.
What is the justification for awarding this contract on a sole-source basis to General Electric Company?
Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For aircraft engine parts, this often occurs due to proprietary designs, unique manufacturing processes, specialized tooling, or existing long-term support agreements where a single manufacturer holds the necessary intellectual property and expertise. The specific justification document (e.g., Justification and Approval - J&A) would detail the reasons why other potential sources were deemed not viable. This document is crucial for understanding the necessity of bypassing full and open competition.
What are the performance risks associated with this fixed-price contract for aircraft engine parts?
The primary performance risk lies with the contractor, General Electric Company, due to the Firm Fixed Price (FFP) contract type. GE is obligated to deliver the specified engine parts within the agreed-upon timeframe and quality standards, regardless of their actual costs. Risks for the government are minimal in terms of cost overruns if the scope is well-defined. However, risks include potential delays in delivery, subpar quality that could lead to aircraft downtime, or the contractor potentially cutting corners on quality to maintain profitability if profit margins are tight. The government's recourse includes contract remedies for non-performance.
What is the anticipated impact of this contract on the operational readiness of DoD aircraft?
This contract is intended to enhance the operational readiness of DoD aircraft by ensuring a steady supply of critical engine parts. Aircraft engines are complex systems requiring regular maintenance and replacement of components to ensure airworthiness and mission capability. By securing these parts through a dedicated contract, the DoD aims to prevent shortages, reduce aircraft downtime due to parts unavailability, and maintain the overall fleet's readiness for deployment and training. The duration of the contract (ending Feb 2027) suggests it covers a significant period of anticipated need.
Are there any known issues with General Electric Company's past performance on similar DoD contracts?
Assessing General Electric Company's past performance requires access to contractor performance evaluation databases (e.g., CPARS - Contractor Performance Assessment Reporting System). Without access to these specific records, it's impossible to definitively state their track record on similar DoD contracts. However, GE is a major, long-standing defense contractor with extensive experience in aircraft engines. While most large contractors have occasional performance issues, they generally maintain a significant level of capability and reliability given the critical nature of their products. A review of CPARS data would be necessary for a thorough assessment.
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: 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: $26,567,414
Exercised Options: $26,567,414
Current Obligation: $26,567,414
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $8,054,162
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: 2025-10-27
Current End Date: 2027-02-28
Potential End Date: 2027-02-28 00:00:00
Last Modified: 2025-12-19
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