DoD Awards GE $863M for Improved Turbine Engine Development, Facing Long-Term Integration Challenges
Contract Overview
Contract Amount: $862,954,255 ($863.0M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2019-02-01
End Date: 2029-12-31
Contract Duration: 3,986 days
Daily Burn Rate: $216.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: REQUIREMENT IS TO DESIGN, DEVELOP, QUALIFY AND INTEGRATE AN IMPROVED TURBINE ENGINE (ITE) FOR THE EMD PHASE.
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35898
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $863.0 million to GENERAL ELECTRIC COMPANY for work described as: REQUIREMENT IS TO DESIGN, DEVELOP, QUALIFY AND INTEGRATE AN IMPROVED TURBINE ENGINE (ITE) FOR THE EMD PHASE. Key points: 1. Significant investment in advanced aerospace technology. 2. Sole awardee is a major defense contractor, limiting immediate competition. 3. Long project duration and complex integration pose execution risks. 4. Focus on aircraft engine manufacturing, a critical defense sector.
Value Assessment
Rating: questionable
The contract value is substantial, but the cost-plus incentive fee structure allows for significant cost growth. Benchmarking is difficult due to the unique nature of ITE development.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While the initial award was full and open, the subsequent definitive contract suggests a single awardee. The price discovery relies heavily on the incentive fee structure and negotiation.
Taxpayer Impact: Taxpayer funds are committed to a high-risk, high-reward technology development with potential long-term benefits but uncertain immediate cost-effectiveness.
Public Impact
Enhances U.S. military aviation capabilities with next-generation engine technology. Potential for significant advancements in fuel efficiency and performance. Long-term commitment of resources may impact funding for other defense priorities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long-term integration complexity
- Cost overruns potential
- Technology maturity risk
Positive Signals
- Potential for significant performance gains
- Strategic technology advancement
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of defense spending. Benchmarks are difficult due to the specialized nature of advanced engine development.
Small Business Impact
The contract data indicates no specific set-aside for small businesses. Large prime contractors like GE typically manage subcontracts, potentially offering opportunities for smaller firms in specialized areas.
Oversight & Accountability
The contract's long duration and cost-plus nature necessitate robust oversight from the Department of the Army to ensure cost control and adherence to development milestones.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Long-term contract duration
- Cost-plus incentive fee structure
- Complex technology integration
- Potential for schedule delays
- Limited visibility into subcontractor performance
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, al, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $863.0 million to GENERAL ELECTRIC COMPANY. REQUIREMENT IS TO DESIGN, DEVELOP, QUALIFY AND INTEGRATE AN IMPROVED TURBINE ENGINE (ITE) FOR THE EMD PHASE.
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 $863.0 million.
What is the period of performance?
Start: 2019-02-01. End: 2029-12-31.
What is the projected return on investment for this advanced turbine engine technology, considering development costs and potential operational savings?
Quantifying the ROI is challenging at this early EMD phase. Potential savings from improved fuel efficiency and reduced maintenance could be substantial over the engine's lifecycle. However, the upfront development costs are significant, and the actual performance gains and operational benefits will only be fully realized after integration and extensive testing.
What are the primary technical risks associated with integrating the Improved Turbine Engine (ITE) into existing aircraft platforms?
Key risks include ensuring compatibility with airframes, control systems, and weapon systems. Challenges may arise in managing thermal loads, vibration, and power output differences. Qualification and certification processes for such a significant upgrade are also complex and time-consuming, requiring extensive testing to ensure safety and reliability.
How will the success of the ITE program be measured, and what are the key performance indicators for the EMD phase?
Success will be measured against specific technical performance parameters outlined in the contract, such as thrust, specific fuel consumption, thermal management, and durability. Key performance indicators for the EMD phase will likely include successful completion of design reviews, component testing, prototype engine builds, and qualification testing demonstrating the engine meets or exceeds specified requirements.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W58RGZ18R0058
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 1000 WESTERN AVE, LYNN, MA, 01905
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: $1,067,966,187
Exercised Options: $863,318,255
Current Obligation: $862,954,255
Actual Outlays: $18,515,149
Subaward Activity
Number of Subawards: 98
Total Subaward Amount: $21,069,413
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-02-01
Current End Date: 2029-12-31
Potential End Date: 2029-12-31 12:12:00
Last Modified: 2025-12-23
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