General Electric Company awarded $74.4M for aircraft engine modules, with a significant portion delivered under a sole-source contract
Contract Overview
Contract Amount: $74,396,532 ($74.4M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-02-14
End Date: 2023-12-31
Contract Duration: 1,416 days
Daily Burn Rate: $52.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: NOUN: COLD SECTION MODULE NSN: 2840-01-284-4013 PN:6071T25G01
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $74.4 million to GENERAL ELECTRIC COMPANY for work described as: NOUN: COLD SECTION MODULE NSN: 2840-01-284-4013 PN:6071T25G01 Key points: 1. Contract awarded to a single, established supplier, raising questions about potential price efficiencies. 2. The contract spans over three years, indicating a long-term need for these critical aircraft components. 3. Fixed-price contract type suggests cost risks are primarily borne by the contractor. 4. The National Stock Number (NSN) points to a specific, standardized part, potentially limiting alternative sourcing options. 5. Delivery orders indicate a flexible procurement approach within the larger contract framework. 6. The contract's value is substantial, reflecting the high cost of specialized aerospace manufacturing.
Value Assessment
Rating: fair
The contract value of $74.4 million for aircraft engine modules appears significant. Benchmarking this against similar sole-source procurements for specialized aerospace components is challenging without more detailed cost breakdowns. The firm fixed-price structure shifts cost risk to the contractor, which can be beneficial if costs are well-managed. However, the lack of competition inherently limits the government's ability to ensure the absolute best value is achieved.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. The data does not provide information on why full and open competition was not pursued, such as the existence of unique capabilities or proprietary technology held by General Electric. The absence of multiple bidders means there was no direct price comparison or negotiation leverage derived from a competitive bidding process.
Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates strong internal oversight to ensure fair pricing.
Public Impact
The Department of Defense benefits from the continued supply of critical aircraft engine modules, ensuring operational readiness. Services delivered include the provision of specialized aircraft engine components, essential for maintaining airworthiness. The geographic impact is primarily within the defense supply chain, with potential implications for maintenance depots and operational bases. Workforce implications include supporting specialized manufacturing jobs within the aerospace sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may result in higher unit costs compared to a competed scenario.
- Sole-source nature requires robust government oversight to validate pricing and necessity.
- Long contract duration could mask inefficiencies if not actively managed.
Positive Signals
- Firm fixed-price contract type limits cost overruns for the government.
- Award to a known entity (General Electric) suggests a degree of reliability in supply.
- Specific NSN indicates a standardized part, potentially simplifying logistics and maintenance.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a highly specialized and capital-intensive industry. The market is characterized by a few dominant players due to high barriers to entry, including significant R&D investment, complex manufacturing processes, and stringent regulatory requirements. Spending in this sector is critical for national defense and commercial aviation, with contracts often being long-term and high-value.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, General Electric, is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this specific award, though large defense contractors often have subcontracting programs. The impact on the small business ecosystem is likely indirect, through the broader defense industrial base.
Oversight & Accountability
Oversight for this contract is managed by the Defense Contract Management Agency (DCMA). As a sole-source award, transparency and accountability rely heavily on DCMA's diligence in monitoring performance, delivery, and pricing. The firm fixed-price nature provides some accountability on cost control by the contractor. Further oversight would typically involve program managers within the Department of Defense and potentially the Inspector General's office for significant issues.
Related Government Programs
- Aircraft Engine Manufacturing
- Aerospace Parts Procurement
- Defense Logistics and Sustainment
- Sole-Source Defense Contracts
- Fixed-Price Contracts
Risk Flags
- Sole-source award may lead to higher costs.
- Lack of competition limits price discovery.
- Potential for vendor lock-in.
- Requires strong government oversight for price reasonableness.
Tags
defense, department-of-defense, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, delivery-order, general-electric, massachusetts, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $74.4 million to GENERAL ELECTRIC COMPANY. NOUN: COLD SECTION MODULE NSN: 2840-01-284-4013 PN:6071T25G01
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 Contract Management Agency).
What is the total obligated amount?
The obligated amount is $74.4 million.
What is the period of performance?
Start: 2020-02-14. End: 2023-12-31.
What is the historical spending trend for this specific NSN or similar aircraft engine modules by the Department of Defense?
Analyzing historical spending for NSN 2840-01-284-4013 or comparable aircraft engine modules by the Department of Defense is crucial for understanding value. Without specific historical data for this NSN, we can infer trends from broader defense spending on engine components. Typically, such specialized parts are procured through long-term contracts due to their critical nature and the lengthy manufacturing cycles. Spending can fluctuate based on fleet readiness requirements, modernization programs, and the lifecycle of specific aircraft platforms. Sole-source awards, like this one, often represent a continuation of existing supply chains, suggesting prior spending on similar items from the same contractor. A detailed analysis would involve examining contract databases for prior awards to General Electric for this or related parts, looking at award amounts, contract types, and durations to identify any significant deviations or patterns in pricing and volume over time.
How does the unit cost of these engine modules compare to industry benchmarks or previous contract awards for similar components?
Determining the precise unit cost and comparing it to industry benchmarks is challenging without access to the detailed pricing structure of the $74.4 million contract. The data provided aggregates the total award value and does not break down per-unit costs. For sole-source contracts, especially in specialized sectors like aerospace, direct comparison to market rates is difficult because competitive pressures are absent. However, the Defense Contract Management Agency (DCMA) would typically perform some level of price reasonableness analysis, potentially comparing costs to previous awards for the same item or similar items, or using cost-plus-incentive-fee (CPIF) or other contract types that allow for greater cost visibility and negotiation. The firm fixed-price nature implies that General Electric has estimated its costs and included a profit margin. Without internal DCMA cost data or publicly available benchmark data for this specific module, a definitive comparison of unit cost is not possible from the provided information.
What are the specific risks associated with a sole-source award for critical aircraft engine components?
Sole-source awards for critical aircraft engine components present several risks. Foremost is the risk of paying a premium price due to the lack of competition. Without competing bids, there is less incentive for the contractor to offer the lowest possible price. Secondly, there's a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting flexibility in future procurements or upgrades. This reliance can also create supply chain vulnerabilities if the sole source experiences production issues, financial instability, or geopolitical disruptions. Furthermore, the absence of competitive pressure might reduce the contractor's incentive to innovate or improve efficiency over time. Robust oversight, including thorough price analysis and performance monitoring, is essential to mitigate these risks.
What is the track record of General Electric Company in delivering aircraft engine components to the Department of Defense?
General Electric (GE) has a long and extensive track record as a major supplier of aircraft engines and components to the Department of Defense (DoD) and other government agencies. They are a primary original equipment manufacturer (OEM) for numerous military aircraft platforms, including fighter jets, bombers, and transport aircraft. GE's history with the DoD includes numerous large-scale contracts for engine production, sustainment, and upgrades. While specific performance metrics for individual contracts are not detailed here, GE is generally considered a capable and experienced provider in this highly specialized field. However, like any large contractor, there can be instances of contract disputes, performance issues, or cost overruns on specific programs, which would be documented in contract performance databases and agency oversight reports.
What is the expected duration and impact of this contract on the operational readiness of the relevant military aircraft fleet?
This contract, with an end date of December 31, 2023, and a duration of 1416 days (approximately 3.88 years), is expected to directly support the operational readiness of the military aircraft fleet that utilizes the specific engine modules procured. The National Stock Number (NSN) 2840-01-284-4013 and part number 6071T25G01 indicate a specific component critical for the functioning of certain aircraft engines. By ensuring a steady supply of these modules, the contract helps prevent aircraft downtime due to component failure or lack of spares, thereby maintaining the availability and deployability of the affected aircraft. The total award value of $74.4 million suggests a significant quantity or high-value nature of these modules, underscoring their importance to sustained air operations.
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, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $74,396,532
Exercised Options: $74,396,532
Current Obligation: $74,396,532
Actual Outlays: $27,004,868
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX12D9400
IDV Type: IDC
Timeline
Start Date: 2020-02-14
Current End Date: 2023-12-31
Potential End Date: 2023-12-31 00:00:00
Last Modified: 2025-11-07
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