DoD Spends $50M on Aircraft Engine Parts from General Electric, Lacking Competition
Contract Overview
Contract Amount: $50,043,938 ($50.0M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2018-04-09
End Date: 2021-03-31
Contract Duration: 1,087 days
Daily Burn Rate: $46.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MULTIPLE NSN'S
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $50.0 million to GENERAL ELECTRIC COMPANY for work described as: MULTIPLE NSN'S Key points: 1. Significant spending of $50M on aircraft engine parts. 2. Sole supplier identified: General Electric Company. 3. High risk due to lack of competition and sole-source nature. 4. Sector: Defense Manufacturing.
Value Assessment
Rating: questionable
The contract value of $50M is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value for aircraft engine parts. Benchmarking against similar sole-source contracts or industry standards is crucial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition raises concerns about potential overspending, directly impacting taxpayer funds allocated to defense procurement.
Public Impact
Taxpayers may be overpaying for critical aircraft engine components due to the absence of competitive bidding. Dependence on a single supplier (General Electric) creates a vulnerability in the defense supply chain. Lack of transparency in pricing for essential military hardware.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
- Supply chain risk
Positive Signals
- Essential defense procurement
- Established supplier relationship
Sector Analysis
This spending falls within the Defense Manufacturing sector, specifically Aircraft Engine and Engine Parts Manufacturing. Benchmarks for this sector are highly variable, but competitive procurement is standard for ensuring value.
Small Business Impact
The data indicates no specific set-aside for small businesses. The award to General Electric, a large corporation, suggests that small businesses were likely not involved in this particular procurement, missing an opportunity for economic inclusion.
Oversight & Accountability
The non-competed nature of this award warrants further oversight to ensure the pricing is justified and that future procurements explore competitive options where feasible to maximize value for the government.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Lack of competition
- Potential for price gouging
- Supply chain dependency
- Limited small business participation
- Lack of transparency in pricing justification
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, oh, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $50.0 million to GENERAL ELECTRIC COMPANY. MULTIPLE NSN'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 $50.0 million.
What is the period of performance?
Start: 2018-04-09. End: 2021-03-31.
What is the justification for awarding this contract as sole-source, and has a market research report been conducted to confirm the absence of viable alternatives?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. A thorough market research report is essential to validate these claims and demonstrate that no other responsible sources can provide the needed goods or services, thereby ensuring the government acts in its best interest.
How does the per-unit cost of these aircraft engine parts compare to industry benchmarks or previous competitive contracts for similar items?
Without access to specific part numbers and detailed cost breakdowns, a precise per-unit cost comparison is challenging. However, given the sole-source nature, it is highly probable that the costs are higher than they would be under a competitive environment. Agencies should conduct post-award analysis against available benchmarks to identify potential overpricing.
What measures are in place to mitigate the risks associated with relying on a single supplier for critical aircraft engine components?
Mitigation strategies for sole-source reliance include developing long-term strategic partnerships, exploring technology transfer or second-sourcing options, maintaining robust inventory levels, and closely monitoring the supplier's performance and financial stability. Regular reviews of the necessity for sole-sourcing should also be conducted.
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: $50,043,938
Exercised Options: $50,043,938
Current Obligation: $50,043,938
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: 2018-04-09
Current End Date: 2021-03-31
Potential End Date: 2021-03-31 00:00:00
Last Modified: 2020-09-25
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