DoD awards $72.3M to General Electric for aircraft engine parts, raising value and competition concerns
Contract Overview
Contract Amount: $72,291,040 ($72.3M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-06-24
End Date: 2028-03-30
Contract Duration: 2,106 days
Daily Burn Rate: $34.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CSM - SPARES
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $72.3 million to GENERAL ELECTRIC COMPANY for work described as: CSM - SPARES Key points: 1. Significant contract value of $72.3M for aircraft engine parts. 2. Sole-source award to General Electric limits competitive pricing. 3. Potential risk due to reliance on a single supplier for critical components. 4. Spending falls within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $72.3M for aircraft engine parts appears high, especially given the lack of competition. Benchmarking against similar sole-source contracts for specialized aerospace components is difficult, but the absence of competitive bidding suggests potential overpricing.
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, was solicited. This significantly limits price discovery and negotiation leverage for the government, potentially leading to higher costs than if multiple vendors had competed.
Taxpayer Impact: Taxpayers may bear a higher cost due to the lack of competitive pressure on pricing for these critical aircraft engine parts.
Public Impact
Impacts military readiness by potentially increasing the cost of maintaining aircraft fleets. Affects the aerospace manufacturing sector, particularly engine parts suppliers. Raises questions about the government's procurement strategy for specialized components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Potential for overpricing
Positive Signals
- Award to established prime contractor
- Long-term contract duration
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, a critical area for defense logistics. Spending benchmarks in this niche sector are often influenced by proprietary technology and high barriers to entry, making competitive analysis challenging.
Small Business Impact
The contract was awarded to General Electric, a large corporation, and there is no indication of small business participation. The sole-source nature of this award further limits opportunities for small businesses to compete for this specific contract.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny. Further oversight is needed to ensure the Defense Logistics Agency adequately justified the lack of competition and negotiated the best possible price for taxpayers.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Reliance on a single supplier for critical components.
- Lack of transparency in price negotiation.
- Limited opportunity for small business participation.
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 $72.3 million to GENERAL ELECTRIC COMPANY. CSM - SPARES
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 $72.3 million.
What is the period of performance?
Start: 2022-06-24. End: 2028-03-30.
What is the justification for awarding this contract on a sole-source basis, and were alternative procurement methods considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or the absence of adequate competition. Without specific details, it's difficult to assess if alternative methods like market research for potential competitors or phased sole-source justifications were explored. The government must demonstrate that competition was not feasible or would not be in the government's best interest.
How does the unit cost of these aircraft engine parts compare to industry benchmarks or previous contracts for similar items?
Benchmarking the unit cost is challenging without access to specific part numbers and detailed specifications. However, given the sole-source nature and the absence of competitive bids, there is a heightened risk that the unit cost may be higher than if the contract had been competed. A thorough cost analysis by the agency is crucial to validate pricing.
What is the long-term strategy for ensuring competitive sourcing of these critical aircraft engine parts to mitigate future sole-source risks?
The long-term strategy should involve proactive market research to identify potential new entrants or alternative suppliers for these parts. The agency could explore strategies like breaking down future requirements into smaller, more competitive lots, or incentivizing existing suppliers to qualify additional sources. Developing a robust sustainment strategy that prioritizes competition is key.
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: $72,291,040
Exercised Options: $72,291,040
Current Obligation: $72,291,040
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NOT OBTAINED - WAIVED
Parent Contract
Parent Award PIID: SPRRA121D0029
IDV Type: IDC
Timeline
Start Date: 2022-06-24
Current End Date: 2028-03-30
Potential End Date: 2028-03-30 12:03:00
Last Modified: 2025-12-12
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