General Electric awarded $101.9M for F110 engine repair, a sole-source contract with a 619-day duration
Contract Overview
Contract Amount: $101,930,169 ($101.9M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2017-01-17
End Date: 2018-09-28
Contract Duration: 619 days
Daily Burn Rate: $164.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F110 ENGINE REPAIR
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $101.9 million to GENERAL ELECTRIC COMPANY for work described as: F110 ENGINE REPAIR Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract covers repair services for F110 engines, critical components for military aircraft. 3. A firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns. 4. The duration of 619 days indicates a significant period for repair services, potentially impacting operational readiness. 5. The absence of small business participation raises concerns about equitable distribution of federal contracting opportunities. 6. The contract was awarded by the Department of Defense, highlighting its focus on defense readiness.
Value Assessment
Rating: questionable
Benchmarking the value of this sole-source contract is challenging without competitive bids. However, the total award amount of $101.9 million for engine repair over a 619-day period suggests a substantial investment. Without comparable contracts or market data, it's difficult to definitively assess if this represents good value for money. The firm-fixed-price structure is a positive indicator, shifting cost risk to the contractor, but the lack of competition prevents a robust price comparison.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required services or supplies. The lack of competition means there were no other bidders, and therefore no direct price comparison or negotiation leverage was established through a bidding process. This can lead to higher prices than might be achieved in a competitive environment.
Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price. Without competitive pressure, the government may pay a premium for the goods or services, as the contractor is not incentivized by competing offers to lower their bid.
Public Impact
The primary beneficiaries are the U.S. Air Force units operating aircraft equipped with F110 engines, ensuring their continued operational capability. The services delivered include the repair and maintenance of critical aircraft engine components, essential for national defense. The geographic impact is primarily within the operational theaters of the U.S. Air Force, supporting global military presence. Workforce implications include the employment of skilled technicians and engineers at General Electric for engine repair and overhaul.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential taxpayer savings.
- Lack of small business participation may not fully leverage diverse supplier capabilities.
- Long contract duration could indicate complex repair needs or potential for schedule slippage.
Positive Signals
- Firm-fixed-price contract shifts cost overrun risk to the contractor.
- Focus on critical engine repair directly supports military readiness.
- Award by Department of Defense underscores strategic importance of the service.
Sector Analysis
The aerospace manufacturing and repair sector is a significant part of the defense industrial base. This contract falls under aircraft engine manufacturing and repair, a specialized niche requiring advanced technical expertise. The market for military engine MRO (Maintenance, Repair, and Overhaul) is often dominated by original equipment manufacturers like General Electric due to proprietary knowledge and specialized tooling. Comparable spending benchmarks are difficult to ascertain without more specific contract details and competitive data, but engine repair is a substantial and ongoing cost for military aviation.
Small Business Impact
This contract did not include a small business set-aside, nor does it appear to have provisions for small business subcontracting based on the provided data. The absence of small business involvement means that opportunities to engage smaller, specialized firms in the defense supply chain are missed. This can limit the growth and development of the small business ecosystem within the aerospace and defense sector.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contract compliance and performance. Accountability measures are inherent in the firm-fixed-price contract type, which holds the contractor responsible for costs. Transparency is limited due to the sole-source nature of the award, making public scrutiny of pricing and justification more difficult.
Related Government Programs
- F110 Engine Procurement
- Aircraft Engine Maintenance and Repair Services
- Department of Defense Aircraft Readiness Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
- No small business participation
Tags
defense, department-of-defense, general-electric, f110-engine, engine-repair, sole-source, firm-fixed-price, aircraft-engine-manufacturing, delivery-order, ohio, major-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $101.9 million to GENERAL ELECTRIC COMPANY. F110 ENGINE REPAIR
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 $101.9 million.
What is the period of performance?
Start: 2017-01-17. End: 2018-09-28.
What is the historical spending pattern for F110 engine repair by the Department of Defense?
Analyzing historical spending on F110 engine repair requires access to comprehensive federal procurement databases. However, it is understood that the F110 engine is a widely used powerplant in various U.S. Air Force and Navy aircraft, such as the F-16 Fighting Falcon and F-15 Eagle. Consequently, ongoing maintenance and repair are essential and represent a significant, recurring expenditure for the Department of Defense. Without specific historical data for this contract vehicle or similar sole-source awards, it's difficult to establish a precise trend. However, the consistent operational use of aircraft powered by F110 engines implies a sustained need for repair services, likely resulting in multi-year, substantial budgetary allocations for this purpose.
What specific justification was provided for awarding this contract on a sole-source basis?
The provided data indicates the contract was awarded as 'NOT COMPETED,' which is synonymous with a sole-source award. The specific justification for such an award typically stems from circumstances where only one responsible source is capable of meeting the government's needs. For complex aerospace components like the F110 engine, this could be due to proprietary technology, specialized manufacturing or repair capabilities held exclusively by the original equipment manufacturer (General Electric in this case), or urgent requirements where competition is not feasible. A formal Justification for Other Than Full and Open Competition (JOFOC) would have been required and should detail these reasons, often citing factors like unique technical expertise, essential system compatibility, or critical national security needs that preclude a competitive process.
How does the firm-fixed-price (FFP) contract type mitigate risk for the government in this scenario?
The Firm-Fixed-Price (FFP) contract type is generally considered advantageous for the government when the scope of work is well-defined and risks can be reasonably estimated. In this F110 engine repair contract, FFP means that General Electric is obligated to perform the work for a predetermined price, regardless of their actual costs. This shifts the financial risk of cost overruns from the government to the contractor. If GE incurs higher-than-expected costs during the repair process, their profit margin will decrease, but the government's payment remains fixed. This structure incentivizes the contractor to manage their costs efficiently and complete the work within the agreed-upon budget, providing cost certainty for the government.
What are the potential implications of a 619-day contract duration for aircraft availability?
A contract duration of 619 days (approximately 20 months) for F110 engine repair suggests a significant commitment to maintaining a portion of the fleet's engine inventory. The implications for aircraft availability depend heavily on the number of engines being repaired concurrently and the overall engine spares strategy of the Department of Defense. If this contract covers a substantial number of engines or critical, long-lead-time repairs, it could impact the availability of aircraft for operational missions if the repair turnaround time is not aligned with operational tempo and attrition rates. Conversely, a well-managed repair pipeline ensures that engines are returned to service efficiently, supporting sustained fleet readiness. The long duration may also reflect the complexity and thoroughness of the required repair processes.
Are there any performance metrics or key performance indicators (KPIs) associated with this contract?
The provided data does not explicitly list performance metrics or Key Performance Indicators (KPIs) for this specific contract. However, for a firm-fixed-price contract involving critical repair services for military assets, performance is typically evaluated against several factors. These often include on-time delivery of repaired engines, adherence to technical specifications and quality standards, and potentially metrics related to repair turnaround time. The Department of Defense and the Defense Contract Management Agency (DCMA) would monitor these aspects to ensure the contractor fulfills their obligations. Failure to meet critical performance standards could result in contractual remedies, although the specifics would be detailed in the contract's statement of work and terms and conditions.
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: 1 NEUMANN WAY, CINCINNATI, OH, 45215
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $101,930,169
Exercised Options: $101,930,169
Current Obligation: $101,930,169
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX16D9408
IDV Type: IDC
Timeline
Start Date: 2017-01-17
Current End Date: 2018-09-28
Potential End Date: 2018-09-28 00:00:00
Last Modified: 2019-10-03
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