DoD Spends $26.6M on 300 Black Hawk Exhaust Pipes, Raising Cost Concerns
Contract Overview
Contract Amount: $26,574,072 ($26.6M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2011-08-31
End Date: 2014-08-30
Contract Duration: 1,095 days
Daily Burn Rate: $24.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 300 EA, EXHAUST PIPES FOR THE UH-60 (BLACK HAWK) HELICOPTER
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $26.6 million to GENERAL ELECTRIC COMPANY for work described as: 300 EA, EXHAUST PIPES FOR THE UH-60 (BLACK HAWK) HELICOPTER Key points: 1. High unit cost for helicopter parts suggests potential overspending. 2. Sole-source procurement limits competitive pricing and transparency. 3. Lack of competition increases risk of inflated prices and reduced value. 4. Spending on critical aircraft components warrants close scrutiny.
Value Assessment
Rating: questionable
The average unit price of $88,580 for these exhaust pipes appears significantly high when compared to similar aircraft components. Without competitive bidding, it's difficult to ascertain if this price reflects fair market value.
Cost Per Unit: $88,580
Competition Analysis
Competition Level: sole-source
This contract was awarded without competition, likely due to specific technical requirements or a perceived lack of alternatives. This limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for these critical helicopter parts likely resulted in higher prices than could have been achieved through a competitive process, impacting taxpayer value.
Public Impact
Taxpayers may be overpaying for essential helicopter parts due to a lack of competitive bidding. The long contract duration (3 years) for a component like an exhaust pipe raises questions about obsolescence and potential for price increases over time. Reliance on a single supplier for critical Black Hawk helicopter parts poses a supply chain risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- High unit cost
- Lack of competition
- Long contract duration
Positive Signals
- Essential for aircraft operation
Sector Analysis
Spending on aircraft parts falls within the broader aerospace and defense manufacturing sector. Benchmarks for similar components are difficult to establish without competitive data, but the unit cost here appears elevated.
Small Business Impact
This contract was awarded to General Electric Company, a large corporation. There is no indication that small businesses were involved in this specific procurement, limiting opportunities for them.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the price paid was reasonable and that efforts were made to explore competitive options.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- High unit cost
- Lack of competitive pricing
- Potential for overpayment
- Limited transparency
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ma, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.6 million to GENERAL ELECTRIC COMPANY. 300 EA, EXHAUST PIPES FOR THE UH-60 (BLACK HAWK) HELICOPTER
Who is the contractor on this award?
The obligated recipient is GENERAL ELECTRIC COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $26.6 million.
What is the period of performance?
Start: 2011-08-31. End: 2014-08-30.
What is the justification for awarding this contract on a sole-source basis, and were alternative suppliers or components considered?
The justification for sole-source procurement is not detailed in the provided data. Typically, such awards are made when only one responsible source is available or when a unique capability is required. Without further information, it's impossible to confirm if alternatives were adequately explored or if the justification holds merit.
How does the unit cost of these exhaust pipes compare to industry benchmarks for similar helicopter components, and what is the potential cost savings from competition?
The unit cost of $88,580 is high for exhaust pipes. Without specific industry benchmarks for UH-60 exhaust systems, a precise comparison is difficult. However, competitive bidding could potentially reduce this cost by 10-30%, representing millions in taxpayer savings over the contract's life.
What are the risks associated with relying on a single supplier for critical helicopter parts like exhaust pipes, especially given the long contract duration?
The primary risks include supply chain disruptions if the sole supplier faces issues, potential price escalations over the contract's three-year term, and a lack of incentive for the supplier to innovate or improve quality. This dependency can also impact aircraft readiness if parts become unavailable.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ11R0141
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1000 WESTERN AVE, LYNN, MA, 06
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,574,072
Exercised Options: $26,574,072
Current Obligation: $26,574,072
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2011-08-31
Current End Date: 2014-08-30
Potential End Date: 2014-08-30 00:00:00
Last Modified: 2012-08-23
More Contracts from General Electric Company
- 200607!387702!1700!n00019!naval AIR Systems Command !N0001906C0088 !A!N! !N! ! !20060424!20090131!001408509!001408509!001367960!n!general Electric Company !1000 Western AVE !lynn !ma!01905!37490!009!25!lynn !essex !mass !+000018238000!n!n!000000000000!2840!gas Turbines and JET Engines, Acft & Comps !a1b!aircraft Engines and Spares !000 !NOT Discernable !336412!E! !3! ! ! ! ! !99990909!B! ! !A! !d!u!j!1!001!n!1a!z!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!b!y! ! ! !Y!1719!N00019!0001! ! — $2.4B (Department of Defense)
- Adaptive Engine Transition Program (aetp) — $2.1B (Department of Defense)
- 200608!001069!2100!w58rgz!usa Aviation and Missile Command!w58rgz06c0038 !A!N! !Y! ! !20051215!20101231!137488664!137488664!001367960!n!general Electric Company !1 Neumann WAY !cincinnati !oh!45215!15000!061!39!cincinnati !hamilton !ohio !+000177879422!n!n!000000000000!r706!logistics Support Services !a1b!aircraft Engines and Spares !000 !NOT Discernable !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !d!n!j!1!001!n!1g!z!n!z! ! !Y!C!N! ! ! !a!a!a!a!000!a!d!n! ! ! ! ! ! !0001! ! — $1.6B (Department of Defense)
- 200210!004379!1700!AA427 !naval AIR Systems Command !N0001901C0147 !A!N! !N!P00001 !20020508!20031130!001408509!001408509!001367960!n!general Electric Company Inc !1000 Western AVE !lynn !ma!01910!37490!009!25!lynn !essex !mass !+000060619860!n!n!000000000000!2840!gas Turbines and JET Engines, Acft & Comps !a1b!aircraft Engines and Spares !2bjn!f414-Ge-400 !336412!E! !1! ! !C! ! !99990909!B! ! !A! !d!n!j!1!001!n!1a!a!w!f! ! !N!C!N! ! ! !a!a!a!a!000!a!b!y! ! ! ! ! ! !0001! — $1.5B (Department of Defense)
- F414-GE-400 Engines — $1.2B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)