DoD awards $42.8M for aircraft engine parts, with limited competition and no small business set-aside
Contract Overview
Contract Amount: $42,846,000 ($42.8M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2019-09-04
End Date: 2022-05-31
Contract Duration: 1,000 days
Daily Burn Rate: $42.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CHAMBER,COMBUSTION,
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $42.8 million to GENERAL ELECTRIC COMPANY for work described as: CHAMBER,COMBUSTION, Key points: 1. The contract value of $42.8M represents a significant investment in maintaining critical aircraft engine components. 2. The sole-source nature of this award raises questions about potential price inflation and limited market engagement. 3. Lack of small business participation suggests a focus on large, established prime contractors for this specialized requirement. 4. The firm-fixed-price contract type aims to transfer cost risk to the contractor, but oversight is crucial given the limited competition. 5. Performance duration of approximately 3 years indicates a need for sustained supply chain support for these parts.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific part numbers and detailed specifications. However, the $42.8M award for aircraft engine parts suggests a substantial procurement. The firm-fixed-price structure is standard for such goods, but the lack of competition means there's less assurance of optimal pricing compared to a more open market. Further analysis would require comparing unit costs to industry benchmarks for similar components and assessing if the awarded price reflects a fair market value given the limited bidding.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating that only one vendor was deemed capable of fulfilling the requirement. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and can potentially lead to higher costs for the government. The absence of competition means taxpayers do not benefit from the cost savings that can arise from a robust bidding environment.
Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no opportunity for multiple companies to compete and drive down costs through their bids.
Public Impact
The Department of Defense is the primary beneficiary, ensuring the operational readiness of its aircraft fleet. Services delivered include the manufacturing and supply of critical aircraft engine and engine parts. The geographic impact is primarily within Ohio, where the contractor is located, but the ultimate impact is on national defense readiness. Workforce implications include employment at the contractor's facility and potentially within its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially increasing costs for taxpayers.
- Lack of transparency in the justification for sole-sourcing could mask inefficiencies.
- No small business participation means missed opportunities to support smaller enterprises in the defense industrial base.
Positive Signals
- Firm-fixed-price contract shifts cost overrun risk to the contractor.
- Awarding to a known entity may ensure quality and timely delivery of critical parts.
- The Defense Logistics Agency's involvement suggests established processes for managing such procurements.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the aerospace and defense industry. This sector is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and significant capital investment. The market is often dominated by a few large, established players. Spending in this area is directly tied to military readiness and the operational lifespan of aircraft fleets. Comparable spending benchmarks would involve analyzing other DoD contracts for similar engine components or maintenance services.
Small Business Impact
This contract was not set aside for small businesses, nor does it appear to have significant subcontracting requirements for them based on the provided data. This indicates that the procurement likely targeted large, specialized manufacturers with the capacity and certifications to produce these specific engine parts. The absence of small business involvement means that opportunities to foster growth and innovation within the small business defense industrial base are not being realized through this particular award.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for monitoring performance, cost, and compliance. The Defense Logistics Agency (DLA) as the contracting agency also has oversight responsibilities. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to review. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Aircraft Engine Maintenance
- Defense Logistics Agency Procurement
- Aircraft Parts Manufacturing
- Sole-Source Defense Contracts
Risk Flags
- Sole-source award may indicate limited market availability or contractor dominance.
- Lack of small business participation limits economic opportunity.
- High value suggests critical components, increasing risk if supply is disrupted.
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-engine-parts, manufacturing, not-competed, sole-source, firm-fixed-price, ohio, large-contract, engine-parts
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $42.8 million to GENERAL ELECTRIC COMPANY. CHAMBER,COMBUSTION,
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 $42.8 million.
What is the period of performance?
Start: 2019-09-04. End: 2022-05-31.
What specific aircraft engines or engine parts are covered by this $42.8M contract?
The provided data indicates the contract is for 'Aircraft Engine and Engine Parts Manufacturing' under NAICS code 336412. However, it does not specify the exact types of engines or the particular parts being procured. This level of detail is typically found in the contract's statement of work or technical specifications, which are not included in the summary data. Understanding the specific components is crucial for assessing their criticality, the complexity of their manufacturing, and for performing accurate value comparisons against industry standards or other similar procurements.
What was the justification for awarding this contract on a sole-source basis?
Sole-source awards are typically justified when only one responsible source is available or capable of meeting the requirement. For aircraft engine parts, this could be due to proprietary technology, unique manufacturing processes, existing integration with specific engine models, or urgent and compelling needs where competition would cause unacceptable delays. The Defense Logistics Agency would have documented this justification, likely referencing factors such as the contractor's exclusive rights to designs, specialized tooling, or proven performance history with the specific engine systems. Without access to the official justification document, the precise reasons remain speculative.
How does the $42.8M contract value compare to historical spending on similar aircraft engine parts by the DoD?
To compare this $42.8M contract value to historical spending, one would need to analyze past procurements by the DoD, specifically the Defense Logistics Agency, for similar aircraft engine parts or components for the same or comparable engine models. This would involve searching contract databases for awards with similar Product Service Codes (PSCs) or NAICS codes, filtering by the relevant military branches or agencies, and examining contract values over several fiscal years. Factors like inflation, technological advancements, and changes in fleet size or operational tempo would need to be considered for a meaningful comparison. The provided data does not include this historical context.
What are the potential 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 include a lack of price competition, which can lead to inflated costs for the government and taxpayers. There's also a reduced incentive for the sole provider to innovate or improve efficiency, as they face no direct market pressure. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if the contractor experiences production issues, quality control failures, or business disruptions, it could significantly impact aircraft readiness. The government also has less leverage in negotiating terms and conditions compared to a competitive scenario.
What performance metrics or quality assurance measures are likely in place for this contract?
Given the critical nature of aircraft engine parts, performance metrics and quality assurance measures are expected to be stringent. These would likely include adherence to detailed technical specifications, rigorous testing protocols (e.g., material analysis, performance testing), on-time delivery schedules, and compliance with aerospace quality standards (such as AS9100). The contract would typically include clauses for inspection and acceptance, potentially involving government representatives at the contractor's facility. Failure to meet these standards could result in contract penalties, rejection of parts, or termination.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: ENGINES AND TURBINES AND COMPONENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: SPRPA119RZ065
Offers Received: 1
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: $42,846,000
Exercised Options: $42,846,000
Current Obligation: $42,846,000
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA812219G0001
IDV Type: BOA
Timeline
Start Date: 2019-09-04
Current End Date: 2022-05-31
Potential End Date: 2022-05-31 00:00:00
Last Modified: 2022-03-27
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