DoD awards $68.3M for aircraft engine parts, with General Electric Company as the sole provider
Contract Overview
Contract Amount: $68,290,776 ($68.3M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2017-11-14
End Date: 2021-09-27
Contract Duration: 1,413 days
Daily Burn Rate: $48.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MULTIPLE PN'S
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $68.3 million to GENERAL ELECTRIC COMPANY for work described as: MULTIPLE PN'S Key points: 1. Contract awarded to a single, established manufacturer suggests limited market alternatives for this specific component. 2. The firm fixed-price contract type shifts cost risk to the contractor, potentially leading to higher initial bids. 3. A long contract duration of 1413 days indicates a sustained need for these critical aircraft parts. 4. The absence of competition raises questions about potential price optimization and value for taxpayer dollars. 5. This award falls within the 'Aircraft Engine and Engine Parts Manufacturing' sector, a specialized industrial area.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific part numbers and detailed specifications. However, the total award amount of $68.3 million over approximately 3.8 years suggests a significant investment in aircraft engine maintenance and supply. Given the sole-source nature, it's difficult to assess if this represents competitive pricing. Further analysis would require comparing unit costs for similar engine components across different military platforms or civilian equivalents, which are not readily available in the provided data.
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 product or service is unique and only available from a single source, or in cases of urgent need where competition is impractical. The lack of competition means there was no opportunity for other manufacturers to bid, potentially limiting price discovery and the government's ability to secure the lowest possible price.
Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates robust internal government cost analysis and negotiation to ensure fair value.
Public Impact
The Department of Defense benefits from the continued availability of critical aircraft engine parts, ensuring operational readiness of its fleet. This contract supports the maintenance and sustainment of military aircraft, crucial for national security operations. The primary beneficiary is the U.S. military, specifically units relying on aircraft powered by engines supplied by General Electric. Workforce implications may include continued employment for engineers, technicians, and manufacturing personnel at General Electric facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated prices compared to a competitive bidding process.
- Sole-source awards can reduce the incentive for the contractor to innovate or improve efficiency.
- Dependence on a single supplier creates supply chain risk if the contractor faces production issues.
Positive Signals
- Award to a single, established manufacturer like General Electric suggests a high level of trust and proven capability.
- Firm fixed-price contract provides cost certainty for the government, assuming the contractor manages their own cost risks effectively.
- The contract ensures a consistent supply of essential parts, contributing to the operational readiness of military assets.
Sector Analysis
The 'Aircraft Engine and Engine Parts Manufacturing' sector is a highly specialized and capital-intensive industry. It is characterized by significant research and development, stringent quality control, and long product lifecycles. Major players like General Electric dominate this market due to the complexity and proprietary nature of engine technology. Government spending in this area is critical for defense readiness and often involves long-term sustainment contracts for complex aerospace systems.
Small Business Impact
The provided data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless General Electric voluntarily engages small businesses for specific components or services not covered by this award.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the Department of Defense's Inspector General. DCMA ensures contract compliance and performance, while the IG investigates potential fraud, waste, and abuse. Transparency is generally maintained through contract databases like FPDS, though detailed performance metrics and cost breakdowns may be less public for sole-source awards.
Related Government Programs
- Aircraft Maintenance and Repair
- Aerospace Manufacturing
- Defense Logistics Support
- Military Aircraft Sustainment
Risk Flags
- Sole-source award
- Potential for price escalation
- Supply chain dependency
Tags
defense, department-of-defense, defense-logistics-agency, general-electric-company, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, ohio, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $68.3 million to GENERAL ELECTRIC COMPANY. MULTIPLE PN'S
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 $68.3 million.
What is the period of performance?
Start: 2017-11-14. End: 2021-09-27.
What is the historical spending trend for aircraft engine parts from General Electric by the Department of Defense?
Analyzing historical spending requires access to comprehensive contract databases over multiple fiscal years. While this specific award totals $68.3 million, understanding the trend involves examining prior contracts with General Electric for similar engine parts. Factors such as the specific aircraft platforms, engine models, and the nature of the parts (e.g., routine maintenance vs. major overhauls) would influence year-over-year spending. A trend analysis would reveal if spending has been consistent, increasing, or decreasing, potentially indicating changes in fleet size, operational tempo, or aging of aircraft requiring more part replacements.
How does the unit cost of these engine parts compare to industry benchmarks or similar government contracts?
Direct comparison of unit costs is difficult without specific part numbers and detailed specifications. However, the sole-source nature of this award suggests that competitive benchmarking might not have been fully utilized. To assess value, one would need to identify comparable parts for similar engine types or aircraft, whether procured competitively by the DoD or purchased by commercial airlines. If General Electric is the sole manufacturer, their pricing power is significant. A thorough analysis would involve requesting detailed cost breakdowns from the contractor and comparing them against internal government estimates or data from other sole-source procurements where price reasonableness was established through negotiation.
What are the key performance indicators (KPIs) used to evaluate General Electric's performance under this contract?
Key performance indicators for aircraft engine parts contracts typically revolve around delivery timeliness, quality of parts, and adherence to specifications. For a firm fixed-price contract, meeting delivery schedules (on-time delivery rate) and ensuring parts meet all technical requirements (acceptance rate, defect rate) are paramount. Performance might also be assessed based on the contractor's responsiveness to inquiries, accuracy of documentation, and overall support provided. The Defense Contract Management Agency (DCMA) often monitors these KPIs, and contractor performance evaluations (e.g., CPARS) are used to document past performance, influencing future award decisions.
What is the risk associated with relying solely on General Electric for these critical aircraft engine parts?
The primary risk associated with sole-source reliance on General Electric is supply chain vulnerability and potential price escalation. If General Electric experiences production disruptions, labor issues, or faces geopolitical challenges, the DoD's supply of critical parts could be severely impacted, affecting aircraft readiness. Furthermore, the lack of competition removes the incentive for General Electric to offer the most competitive pricing, potentially leading to higher costs for the government over the contract's duration. This dependence also limits the government's flexibility to switch suppliers if performance issues arise or if a more cost-effective alternative becomes available.
What is the estimated total cost of ownership for the aircraft engines supported by this contract over their lifecycle?
Estimating the total cost of ownership (TCO) for aircraft engines supported by this contract requires more data than provided. This $68.3 million award covers specific parts over a defined period, not the entire lifecycle of the engines or the aircraft they power. TCO includes initial acquisition costs, fuel, maintenance, repairs, spare parts (like those in this contract), upgrades, and eventual disposal. To calculate TCO, one would need data on engine operating hours, fuel consumption, scheduled maintenance intervals, unscheduled repairs, and the projected lifespan of the engines and aircraft fleet. This contract represents only a component of the overall sustainment costs.
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: $68,290,776
Exercised Options: $68,290,776
Current Obligation: $68,290,776
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: 2017-11-14
Current End Date: 2021-09-27
Potential End Date: 2021-09-27 00:00:00
Last Modified: 2021-09-27
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