DoD's $34.2M contract for aircraft engine parts awarded to General Electric Company, with a long performance period
Contract Overview
Contract Amount: $34,200,203 ($34.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2023-12-08
End Date: 2030-02-28
Contract Duration: 2,274 days
Daily Burn Rate: $15.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: SPARES NSN2840-01-692-2620
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $34.2 million to GENERAL ELECTRIC COMPANY for work described as: SPARES NSN2840-01-692-2620 Key points: 1. The contract's value of $34.2 million over its performance period suggests a significant investment in critical aircraft engine components. 2. Awarded as a sole-source contract, the lack of competition may impact price optimization and potentially lead to higher costs. 3. The contract's duration, spanning over 2200 days, indicates a long-term need for these specific engine parts. 4. The firm-fixed-price contract type shifts cost risk to the contractor, which can be beneficial for the government if managed effectively. 5. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small businesses. 6. The contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, highlighting its importance to aviation readiness.
Value Assessment
Rating: fair
Benchmarking the value of this $34.2 million contract is challenging without specific details on the exact parts and quantities. However, given the sole-source nature, it is difficult to assess if the pricing is competitive. The firm-fixed-price structure provides cost certainty for the government, but the absence of competitive bidding means there's less assurance of achieving the best possible value. Further analysis would require comparing unit costs to similar procurements or market rates for comparable engine components.
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 Company, was solicited. This typically occurs when a specific capability or product is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the most cost-effective solution.
Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of benefiting from competitive pricing, potentially leading to a higher overall expenditure for these aircraft engine parts.
Public Impact
The primary beneficiaries are the Department of Defense and its aviation units, ensuring the continued operational readiness of aircraft. The services delivered include the provision of essential aircraft engine and engine parts, crucial for maintenance and repair operations. The geographic impact is likely widespread, supporting military aviation operations across various bases and deployment locations. Workforce implications may include supporting specialized manufacturing and maintenance jobs within General Electric and its supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings.
- Long contract duration increases exposure to potential price escalations or obsolescence risks.
- Lack of small business participation may limit opportunities for smaller firms in the supply chain.
Positive Signals
- Firm-fixed-price contract provides cost certainty for the government.
- Award to a known manufacturer like General Electric suggests a focus on reliability and established supply chains.
- Long performance period ensures sustained availability of critical parts.
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 complex technology, stringent quality requirements, and significant R&D investment. General Electric is a major player in this market, often holding proprietary technology or extensive manufacturing expertise for specific engine models. Comparable spending in this sector can vary widely based on the type of aircraft and engine complexity, but large value contracts are common for military aviation sustainment.
Small Business Impact
This contract does not appear to have a small business set-aside. As a sole-source award to a large corporation, it is unlikely to involve significant subcontracting opportunities specifically designated for small businesses unless initiated by the prime contractor. This could mean missed opportunities for small businesses to participate in the defense supply chain for these critical components.
Oversight & Accountability
Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA) and the Department of Defense's internal audit and inspection mechanisms. The firm-fixed-price nature of the contract means oversight will focus on contract compliance, delivery schedules, and quality assurance rather than detailed cost auditing. Transparency is generally maintained through contract databases, but specific performance metrics and detailed cost breakdowns may not be publicly available.
Related Government Programs
- Aircraft Engine Maintenance and Repair
- Defense Logistics Support
- Military Aircraft Parts Procurement
- Aerospace Manufacturing Contracts
Risk Flags
- Sole-source award may result in higher costs.
- Long contract duration increases risk exposure.
- Lack of competition limits price discovery.
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, long-term-contract, general-electric, massachusetts
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.2 million to GENERAL ELECTRIC COMPANY. SPARES NSN2840-01-692-2620
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 $34.2 million.
What is the period of performance?
Start: 2023-12-08. End: 2030-02-28.
What is the historical spending pattern for this specific NSN (SPARES NSN2840-01-692-2620) with General Electric?
Analyzing historical spending for NSN2840-01-692-2620 with General Electric requires access to detailed procurement data beyond this single award. While this contract represents a $34.2 million commitment, it's crucial to understand if this is a new requirement or a continuation of previous support. Previous awards for the same NSN could reveal trends in pricing, volume, and contract types. A significant increase or decrease in spending compared to prior periods might indicate changes in operational tempo, fleet size, or the introduction of new technologies. Without historical data, it's difficult to assess if the current award represents a fair market value or a deviation from established spending patterns for this specific part.
How does the unit cost of these aircraft engine parts compare to similar components purchased competitively?
Directly comparing the unit cost of these aircraft engine parts is challenging without knowing the specific part number, quantity, and any associated technical specifications. As this is a sole-source award, a competitive benchmark is absent. To assess value, one would need to identify comparable engine parts procured through competitive bidding by the DoD or other agencies. This would involve finding parts with similar complexity, material composition, and performance characteristics. If publicly available data shows significantly lower unit costs for comparable parts acquired competitively, it would suggest that this sole-source award may not be achieving optimal value for the government. The firm-fixed-price nature helps with budget predictability but doesn't inherently guarantee competitive pricing without a bidding process.
What are the specific risks associated with a sole-source award for critical aircraft engine parts?
A sole-source award for critical aircraft engine parts carries several risks. Primarily, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most cost-effective solution. There's also a risk of reduced innovation and responsiveness, as the sole provider may have less incentive to improve products or services. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain; any disruption at the contractor's facility or within their own supply network could directly impact military readiness. The government also loses leverage in negotiations, potentially making it harder to address issues related to quality, delivery, or obsolescence over the long contract term.
What is the expected impact of this contract on the operational readiness of DoD aircraft?
This contract is expected to have a positive impact on the operational readiness of DoD aircraft by ensuring a consistent and reliable supply of critical engine parts. Aircraft engines are complex systems requiring regular maintenance and component replacement to function safely and effectively. By securing a long-term supply agreement with General Electric, the DoD aims to prevent shortages of essential parts, thereby minimizing aircraft downtime. This sustained availability of parts is fundamental to maintaining the fleet's readiness for training, deployment, and operational missions. The firm-fixed-price structure further supports readiness by providing budget certainty for these critical sustainment activities.
Are there any known performance issues or track record concerns with General Electric regarding similar defense contracts?
Assessing General Electric's track record on similar defense contracts requires a comprehensive review of past performance evaluations, contract awards, and any reported disputes or issues. General Electric is a major defense contractor with extensive experience in aircraft engine manufacturing and support. While large contractors can encounter performance challenges, their long-standing presence suggests a generally established capability. Specific concerns would typically be documented in contract performance reports (e.g., CPARS) or through Inspector General investigations. Without access to such detailed performance data specific to this contract or closely related ones, it's difficult to pinpoint concrete track record concerns. However, the sole-source nature of this award might imply that GE is the only viable or qualified source, potentially mitigating concerns about their ability to fulfill the requirement.
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: $34,200,203
Exercised Options: $34,200,203
Current Obligation: $34,200,203
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: 2023-12-08
Current End Date: 2030-02-28
Potential End Date: 2030-02-28 00:00:00
Last Modified: 2023-12-08
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