DoD's $28.3M F108 Engine Repair Contract Awarded to General Electric Company
Contract Overview
Contract Amount: $28,326,086 ($28.3M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-09-14
End Date: 2022-12-29
Contract Duration: 836 days
Daily Burn Rate: $33.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: REPAIR AUGMENTATION F108 ENGINE
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $28.3 million to GENERAL ELECTRIC COMPANY for work described as: REPAIR AUGMENTATION F108 ENGINE Key points: 1. Contract value represents a significant investment in maintaining critical aircraft engine readiness. 2. Sole awardee suggests a specialized capability or a highly competitive initial bidding process. 3. Fixed-price contract type aims to control costs and provide predictability for the government. 4. Contract duration of over two years indicates a sustained need for these repair services. 5. The award falls within the Aircraft Engine and Engine Parts Manufacturing sector, a key area for defense readiness.
Value Assessment
Rating: good
The contract value of $28.3 million for engine repair services appears reasonable given the specialized nature of aircraft engine maintenance. Benchmarking against similar contracts for F108 engine repairs would provide a more precise value-for-money assessment. However, the firm fixed-price structure suggests an effort to manage costs effectively. The award amount is not excessively high when considering the complexity and criticality of maintaining advanced military aircraft engines.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The fact that there was only one award does not necessarily imply limited competition; it could mean that General Electric was the most qualified or offered the best value among several bidders. A single award from a competitive process suggests that the government sought the best solution available in the market.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and service quality, even if a single vendor ultimately wins the contract.
Public Impact
The primary beneficiaries are the Department of Defense and its operational units relying on aircraft powered by F108 engines. Services delivered include the repair and augmentation of F108 engines, ensuring their operational readiness. The geographic impact is likely focused on military bases and maintenance facilities where these aircraft operate. Workforce implications include skilled technicians and engineers involved in the complex repair processes.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if General Electric is the sole provider of specialized F108 repair parts or expertise.
- Risk of cost overruns if unforeseen technical issues arise that are not fully captured by the fixed-price contract.
- Dependence on a single contractor for critical engine maintenance could impact readiness if performance falters.
Positive Signals
- Award to a known manufacturer (General Electric) suggests established expertise and quality control.
- Firm fixed-price contract provides cost certainty for the government.
- Full and open competition indicates a market-driven approach to selecting the best provider.
Sector Analysis
The contract falls within the Aircraft Engine and Engine Parts Manufacturing sector (NAICS 336412). This sector is vital for national defense, providing essential components and maintenance for military aviation. Spending in this area is often characterized by high technical requirements, specialized manufacturing processes, and significant R&D investment. Comparable spending benchmarks would involve analyzing other contracts for similar engine types or repair services across different military branches.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large, specialized repair service, it is unlikely that small businesses would be primary awardees unless through subcontracting. The prime contractor, General Electric, would determine any subcontracting opportunities, which could potentially involve smaller firms for specific components or services, but this is not guaranteed.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA), which awarded the contract. Accountability measures are embedded in the firm fixed-price contract type, requiring delivery of specified services at an agreed-upon price. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed repair reports may be internal to the DoD. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Aircraft Engine Maintenance
- Defense Logistics Agency Contracts
- Military Aircraft Parts
- F108 Engine Support
- Aerospace Manufacturing
Risk Flags
- Potential for sole-source dependency if competition is limited in practice.
- Risk of performance issues impacting military readiness.
- Need for robust quality assurance to ensure engine reliability.
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-engine-repair, general-electric, firm-fixed-price, full-and-open-competition, ohio, naics-336412, delivery-order, f108-engine
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.3 million to GENERAL ELECTRIC COMPANY. REPAIR AUGMENTATION F108 ENGINE
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 $28.3 million.
What is the period of performance?
Start: 2020-09-14. End: 2022-12-29.
What is General Electric's track record with F108 engine repairs and similar defense contracts?
General Electric is the original manufacturer of the F108 engine, which powers the KC-135 Stratotanker and other aircraft. Their track record with F108 engine repairs is extensive, as they possess the original design specifications, tooling, and expertise. Historically, GE has been a primary contractor for military engine maintenance across various platforms. Analyzing past performance data, including on-time delivery rates, quality metrics, and any past disputes or contract modifications related to F108 engines, would provide a comprehensive view of their reliability and capability in fulfilling this specific contract. Their long-standing relationship with the DoD for engine support suggests a generally positive history, though specific contract performance can vary.
How does the $28.3 million contract value compare to historical spending on F108 engine repairs?
To accurately benchmark the $28.3 million contract value, historical spending data for F108 engine repairs, specifically from the Defense Logistics Agency (DLA) or other relevant DoD entities, would be required. This would involve examining the total amount spent on F108 engine repair and maintenance over previous fiscal years, as well as the value of individual contracts awarded for similar services. Factors such as inflation, changes in engine technology, operational tempo, and the number of engines requiring repair can influence year-over-year spending. Without access to this specific historical data, it's challenging to definitively state whether this award represents an increase, decrease, or stable level of spending. However, the duration of the contract (836 days) suggests a sustained need that aligns with typical operational requirements for maintaining a fleet of aircraft.
What are the primary risks associated with this contract for the Department of Defense?
The primary risks associated with this contract include potential cost overruns if unforeseen technical issues arise that are not adequately addressed by the firm fixed-price structure, although this structure is designed to mitigate such risks. Another significant risk is performance degradation or delays by the contractor, General Electric, which could impact aircraft readiness and operational capabilities. Given that GE is the original equipment manufacturer, there's also a potential risk of vendor lock-in, making it difficult or costly to switch providers for future repairs or parts. Ensuring consistent quality and adherence to stringent military specifications throughout the contract lifecycle is crucial to mitigate these risks. The duration of the contract also implies a reliance on GE's sustained capacity and workforce availability.
How effective is the firm fixed-price contract type in ensuring value for money for this engine repair service?
The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money for services like engine repair, especially when the scope of work is well-defined. FFP shifts the risk of cost overruns to the contractor (General Electric), incentivizing them to manage costs efficiently and complete the work within the agreed-upon price. This provides the Department of Defense with cost certainty. For value for money, the effectiveness hinges on the initial negotiation and the clarity of the repair specifications. If the government accurately defines the required repairs and services, and GE agrees to a price that reflects competitive market conditions and their expected costs, then FFP can lead to significant savings. However, if unforeseen complexities arise that require extensive rework beyond the initial scope, the government might not achieve the intended value if the contractor is unable to absorb additional costs.
What is the significance of the 'Aircraft Engine and Engine Parts Manufacturing' NAICS code (336412) in the context of this contract?
The NAICS code 336412, 'Aircraft Engine and Engine Parts Manufacturing,' signifies that this contract is related to the production, repair, and overhaul of aircraft engines and their components. This is a highly specialized and critical sector for national defense, as modern military aircraft rely on sophisticated engine technology. Companies operating under this code typically possess advanced manufacturing capabilities, rigorous quality control processes, and significant engineering expertise. For the Department of Defense, awarding contracts within this sector ensures access to essential maintenance and support for its aviation fleet. The high barriers to entry, including capital investment and technical know-how, often mean that a limited number of firms, like General Electric, dominate this market, influencing competition dynamics and pricing.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,326,086
Exercised Options: $28,326,086
Current Obligation: $28,326,086
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE4AX20D9005
IDV Type: IDC
Timeline
Start Date: 2020-09-14
Current End Date: 2022-12-29
Potential End Date: 2022-12-29 00:00:00
Last Modified: 2022-10-11
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