DoD awards $38M for aircraft engine parts to General Electric, raising questions about competition
Contract Overview
Contract Amount: $38,186,824 ($38.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-09-24
End Date: 2023-06-20
Contract Duration: 999 days
Daily Burn Rate: $38.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CHAMBER,COMBUSTION,
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $38.2 million to GENERAL ELECTRIC COMPANY for work described as: CHAMBER,COMBUSTION, Key points: 1. Significant contract value awarded to a single large vendor. 2. Lack of competition may lead to suboptimal pricing. 3. Potential for higher costs due to sole-source award. 4. Focus on critical defense logistics highlights supply chain importance.
Value Assessment
Rating: questionable
The award of $38.2 million for aircraft engine parts to General Electric appears high given the lack of competitive bidding. Benchmarking against similar contracts for engine components is difficult without more data, but the absence of competition is a red flag for value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor was considered. This significantly limits price discovery and negotiation leverage for the government, potentially resulting in higher prices than if multiple vendors had competed.
Taxpayer Impact: Taxpayers may be paying a premium for aircraft engine parts due to the lack of competitive bidding, impacting overall defense budget efficiency.
Public Impact
Ensures continued availability of critical aircraft engine parts for military operations. Supports a major defense contractor, potentially impacting jobs and industry stability. Highlights reliance on established manufacturers for specialized defense equipment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of transparency in pricing
- Potential for cost overruns
Positive Signals
- Ensures supply of critical defense components
- Supports established vendor relationship
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often characterized by high R&D costs, long product lifecycles, and significant reliance on a few specialized manufacturers.
Small Business Impact
The contract was awarded to General Electric Company, a large corporation, and there is no indication of small business participation. This award does not appear to support small business goals.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the government is receiving fair value. Accountability for the pricing and justification for the lack of competition should be thoroughly reviewed.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for inflated costs due to limited vendor options.
- Lack of transparency in the procurement process.
- No clear indication of small business involvement.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.2 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 $38.2 million.
What is the period of performance?
Start: 2020-09-24. End: 2023-06-20.
What is the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent and compelling needs that cannot be met by other sources. Without specific documentation from the Department of Defense, it's impossible to definitively state the reason. However, such awards often raise concerns about whether competition was truly impossible or if other avenues were adequately explored.
How does the pricing of these aircraft engine parts compare to industry benchmarks or previous competitive awards?
Benchmarking the pricing is challenging without access to detailed cost breakdowns and comparative market data for similar engine parts. The absence of competition makes it difficult to assess if the 'FIRM FIXED PRICE' reflects a fair market value. Further analysis would require comparing unit costs against publicly available data for comparable parts or historical competitive solicitations.
What is the long-term impact on the defense supply chain and potential for future competition if sole-source awards become the norm for critical components?
A consistent pattern of sole-source awards for critical components can stifle innovation and discourage new entrants into the defense market, potentially leading to a less resilient and more expensive supply chain. It can also reduce the government's leverage in future negotiations. Maintaining a competitive landscape is crucial for long-term cost-effectiveness and technological advancement in defense.
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
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: $38,186,824
Exercised Options: $38,186,824
Current Obligation: $38,186,824
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX19D9400
IDV Type: IDC
Timeline
Start Date: 2020-09-24
Current End Date: 2023-06-20
Potential End Date: 2023-06-20 00:00:00
Last Modified: 2022-02-18
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