DoD awards $37.5M for 50 T700 engines to GE, bypassing competition for Navy production
Contract Overview
Contract Amount: $37,449,753 ($37.4M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2019-11-25
End Date: 2021-07-31
Contract Duration: 614 days
Daily Burn Rate: $61.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER IS TO PROCURE 50 EACH 401C ENGINES IN SUPPORT OF NAVY PRODUCTION FOR CYS 2020 AND 2021 DELIVERIES.
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $37.4 million to GENERAL ELECTRIC COMPANY for work described as: T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER IS TO PROCURE 50 EACH 401C ENGINES IN SUPPORT OF NAVY PRODUCTION FOR CYS 2020 AND 2021 DELIVERIES. Key points: 1. Value for money is difficult to assess due to lack of competition. 2. Sole-source award limits price discovery and potentially increases costs. 3. Contract performance risk is moderate, given the established nature of the T700 engine. 4. This contract supports ongoing Navy production, indicating a critical need. 5. The award falls within the Aircraft Engine and Engine Parts Manufacturing sector. 6. The duration of the contract aligns with production schedules for 2020-2021 deliveries.
Value Assessment
Rating: questionable
The total award of $37.5 million for 50 engines equates to approximately $749,000 per engine. Without competitive bids, it's challenging to benchmark this price against market rates or similar contracts. The lack of competition raises concerns about whether the government secured the best possible price. Historical data on T700 engine procurements would be necessary for a more robust value assessment.
Cost Per Unit: Approximately $749,000 per engine (based on total award and quantity).
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, General Electric Company, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they typically result in higher prices and reduced innovation compared to fully competed contracts. The absence of multiple bids prevents a clear understanding of the market price.
Taxpayer Impact: Taxpayers may be paying a premium for these engines due to the lack of competitive pressure. Without a competitive process, there is less incentive for the contractor to offer the lowest possible price.
Public Impact
The primary beneficiaries are the U.S. Navy, receiving critical T700 engines for production. The services delivered are the manufacturing and supply of 50 T700 engines. The geographic impact is primarily within the United States, supporting defense manufacturing. Workforce implications include continued employment at General Electric's manufacturing facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated pricing.
- Sole-source award limits transparency in cost determination.
- Potential for reduced innovation due to absence of market pressure.
Positive Signals
- Procurement of essential T700 engines for Navy production.
- Award to a known and established manufacturer (General Electric).
- Contract duration aligns with specified delivery years (2020-2021).
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing industry, a specialized sector within aerospace and defense. The T700 engine is a widely used turboshaft engine in military helicopters. The market for such specialized components is often concentrated among a few key manufacturers. Benchmarking spending would require comparing this award to other procurements of similar military-grade engines, considering factors like quantity, specifications, and supplier.
Small Business Impact
This contract does not appear to involve small business set-asides, as indicated by 'sb: false'. General Electric Company is a large corporation. There is no explicit mention of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless GE has existing subcontracting relationships not detailed here.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and financial management systems. As a delivery order under a larger contract vehicle (likely an IDIQ or similar), oversight mechanisms would be tied to the parent contract. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- T700 Engine Production
- Navy Helicopter Support
- Aircraft Engine Manufacturing
- Defense Procurement
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for price inflation
Tags
defense, department-of-defense, navy, aircraft-engine-manufacturing, sole-source, firm-fixed-price, delivery-order, general-electric, t700-engine, massachusetts, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.4 million to GENERAL ELECTRIC COMPANY. T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER IS TO PROCURE 50 EACH 401C ENGINES IN SUPPORT OF NAVY PRODUCTION FOR CYS 2020 AND 2021 DELIVERIES.
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 $37.4 million.
What is the period of performance?
Start: 2019-11-25. End: 2021-07-31.
What is the historical spending pattern for T700 engines by the Department of Defense?
Historical spending on T700 engines by the Department of Defense is substantial, reflecting their critical role in various naval and army aviation platforms. While specific aggregate figures for all T700 procurements are not readily available in this dataset, the T700 is a mature engine with a long service life, implying consistent procurement over many years. This particular award of $37.5 million for 50 engines in 2019 for 2020-2021 deliveries represents a snapshot of ongoing sustainment and production needs. Analyzing past awards for similar quantities and configurations, especially those that were competitively sourced, would provide a baseline for assessing the value of this sole-source contract. Fluctuations in spending are often tied to fleet readiness requirements, new platform introductions, and depot-level maintenance cycles.
How does the per-unit cost of this T700 engine award compare to previous sole-source awards for the same engine?
Comparing the per-unit cost of approximately $749,000 for this T700 engine award to previous sole-source awards requires access to historical contract data that is not provided. However, sole-source procurements generally tend to be higher than competitively awarded contracts for similar items. If previous sole-source awards for T700 engines were significantly lower, it would indicate a potential price increase or a less favorable negotiation in this instance. Conversely, if prior sole-source awards were in a similar range, it might suggest consistent pricing dynamics for non-competitive acquisitions of this specific engine. Without comparative data, it is difficult to definitively state whether this award represents a favorable or unfavorable price point relative to past sole-source deals.
What are the specific risks associated with a sole-source award for critical aircraft engines?
The primary risks associated with a sole-source award for critical aircraft engines like the T700 include inflated pricing due to the absence of competitive pressure, potentially leading to inefficient use of taxpayer funds. There is also a risk of reduced innovation, as the sole provider may have less incentive to invest in cost-saving technologies or process improvements. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; any disruption at the contractor's facility could have significant impacts on fleet readiness. Lastly, the lack of transparency in the pricing negotiation process makes it harder for the government to ensure it is receiving fair market value, increasing the risk of overpayment.
What is the track record of General Electric Company in supplying T700 engines to the U.S. military?
General Electric Company (GE) has a long and established track record as the primary supplier of T700 engines to the U.S. military, including the Navy and Army. The T700 engine family has been a workhorse for decades, powering numerous helicopter platforms such as the Black Hawk, Apache, and Seahawk variants. GE has consistently delivered these engines, supporting both new production and sustainment requirements. Their extensive experience with the T700 platform suggests a high level of technical expertise and manufacturing capability. While specific performance metrics for all past contracts are not detailed here, GE's continued role as the sole source for many T700 procurements indicates a generally satisfactory performance history in meeting military specifications and delivery schedules.
How does the quantity of 50 engines in this award compare to typical delivery order sizes for T700 engines?
The quantity of 50 T700 engines in this delivery order is a significant but not necessarily atypical amount for military engine procurements. Delivery orders under larger indefinite-delivery, indefinite-quantity (IDIQ) contracts often vary widely in quantity based on specific program needs, production schedules, and budget allocations. For a critical engine like the T700, which powers multiple helicopter platforms, procuring 50 units could support a specific production lot for new aircraft, a major overhaul program, or a combination of sustainment needs across different fleet types. Without comparative data on the size of other T700 delivery orders, it's difficult to definitively label this quantity as large or small, but it represents a substantial investment and a considerable number of critical components.
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: 1000 WESTERN AVE, LYNN, MA, 01905
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $37,449,753
Exercised Options: $37,449,753
Current Obligation: $37,449,753
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W58RGZ15D0048
IDV Type: IDC
Timeline
Start Date: 2019-11-25
Current End Date: 2021-07-31
Potential End Date: 2021-07-31 12:07:00
Last Modified: 2021-07-01
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