DoD awards $35.8M for 46 T701D engines for Apache helicopters, citing sole-source justification
Contract Overview
Contract Amount: $35,883,300 ($35.9M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2019-12-02
End Date: 2021-06-30
Contract Duration: 576 days
Daily Burn Rate: $62.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-20-F-0132 IS TO PROCURE 46 EACH 701D ENGINES IN SUPPORT OF APACHE FOR CY 2020 DELIVERIES.
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $35.9 million to GENERAL ELECTRIC COMPANY for work described as: T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-20-F-0132 IS TO PROCURE 46 EACH 701D ENGINES IN SUPPORT OF APACHE FOR CY 2020 DELIVERIES. Key points: 1. The contract focuses on procuring essential engine components for a critical military platform. 2. Sole-source award raises questions about potential price overruns and lack of competitive pressure. 3. The duration of the contract suggests a sustained need for these engine parts. 4. Fixed-price contract type aims to control costs, but initial pricing needs scrutiny. 5. The award is a delivery order against an existing contract vehicle. 6. The procurement supports the Army's aviation readiness for the 2020 fiscal year.
Value Assessment
Rating: questionable
The contract value of $35.8 million for 46 engines equates to approximately $780,000 per engine. Benchmarking this against similar engine procurements is difficult without more specific technical details and market data. However, given the sole-source nature, there is a risk that the price may not reflect competitive market rates. Further analysis would be needed to compare this to the cost of comparable engine models or previous procurements of the T701D.
Cost Per Unit: Approximately $780,000 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 vendor, General Electric Company, was solicited. The justification for this approach is not detailed in the provided data, but sole-source awards typically occur when only one responsible source can provide the required item or service. This lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed procurement.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, potentially leading to less efficient use of public funds.
Public Impact
The primary beneficiaries are the U.S. Army aviation units operating Apache helicopters, ensuring their operational readiness. The services delivered are the supply of critical engine components necessary for aircraft maintenance and deployment. The geographic impact is national, supporting military operations across various theaters. Workforce implications include supporting jobs at General Electric and its supply chain partners involved in engine manufacturing and assembly.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing.
- Lack of detailed justification for sole-sourcing.
- Potential for cost overruns without competitive pressure.
- Fixed-price contract mitigates some risk, but initial price needs validation.
Positive Signals
- Procurement of essential components for a key military asset.
- Fixed-price contract type provides cost certainty.
- Delivery order against an existing contract vehicle may indicate streamlined process.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine components. The market for military aircraft engines is highly specialized, often dominated by a few key manufacturers due to high barriers to entry, including research and development costs, intellectual property, and stringent qualification requirements. General Electric is a major player in this market. Comparable spending benchmarks would involve analyzing other large engine procurements for military aircraft, considering factors like engine type, power output, and platform.
Small Business Impact
The provided data indicates that this contract was not set aside for small businesses (ss: false) and there is no specific mention of small business subcontracting requirements (sb: false). Therefore, this particular award does not appear to directly benefit small businesses through set-asides. The impact on the broader small business ecosystem is likely indirect, through potential subcontracting opportunities with the prime contractor, General Electric, if such provisions are included in the base contract or are standard practice.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management oversight mechanisms. As a delivery order against an existing contract, some level of oversight may have already been established. Accountability measures would involve performance monitoring against the contract terms, including delivery schedules and quality standards. Transparency is limited by the sole-source nature of the award and the lack of publicly available detailed justification. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Apache Helicopter Modernization Programs
- T700 Engine Family Support Contracts
- Department of Defense Aircraft Procurement
- General Electric Aviation Contracts
Risk Flags
- Sole-source award
- Lack of competitive justification
- High per-unit cost potential
Tags
defense, department-of-defense, department-of-the-army, aircraft-engine-manufacturing, sole-source, delivery-order, firm-fixed-price, apache-helicopter, t701d-engine, massachusetts, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.9 million to GENERAL ELECTRIC COMPANY. T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-20-F-0132 IS TO PROCURE 46 EACH 701D ENGINES IN SUPPORT OF APACHE FOR CY 2020 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 $35.9 million.
What is the period of performance?
Start: 2019-12-02. End: 2021-06-30.
What is the historical spending pattern for T701D engines, and how does this award compare?
Analyzing historical spending for T701D engines requires access to broader contract databases and specific procurement histories. Without that, a direct comparison is challenging. However, the current award of $35.8 million for 46 engines represents a significant investment in a specific fiscal year (CY 2020). If previous procurements were also sole-source and at similar per-unit costs, it suggests a consistent, albeit potentially less cost-effective, approach to acquiring these engines. Conversely, if past procurements were competed or involved different engine variants, this award's value and terms might stand out. Understanding the total lifecycle cost and previous acquisition strategies for the T701D engine family is crucial for a comprehensive historical context.
What specific justification was provided for the sole-source award to General Electric?
The provided data indicates the contract was 'NOT COMPETED' and is a sole-source award. However, the specific justification for this sole-source determination is not detailed. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency that precludes full and open competition. For complex systems like aircraft engines, justifications often relate to unique technical capabilities, proprietary technology, or the need for compatibility with existing platforms where only one manufacturer can meet the requirements. A thorough review of the contract file, including the Justification and Approval (J&A) document, would be necessary to understand the precise rationale.
How does the per-unit cost of $780,000 for the T701D engine compare to market rates or similar engines?
The per-unit cost of approximately $780,000 for the T701D engine is a significant figure. Benchmarking this against market rates is complex due to the specialized nature of military aviation engines and the sole-source award. General Electric is a primary manufacturer of this engine, and direct commercial equivalents or competitor pricing may not be readily available or directly comparable. However, for context, high-performance turboshaft engines for similar military applications can range from several hundred thousand to over a million dollars, depending on thrust, efficiency, technological sophistication, and support packages. Without access to General Electric's pricing structure for this specific configuration or data on comparable engines from other manufacturers (if any exist for this platform), it's difficult to definitively assess if $780,000 represents a competitive market rate. The lack of competition inherently raises concerns about whether this price reflects optimal value for taxpayers.
What are the performance implications of using the T701D engine in the Apache helicopter?
The T701D engine is a variant of the widely used T700 engine family, which has been the powerplant for the U.S. Army's Black Hawk and Apache helicopters for decades. The T701D is known for its reliability and performance in demanding conditions. Its inclusion in the Apache ensures a certain level of operational capability and interoperability within the fleet. The 'D' variant typically incorporates specific upgrades or modifications tailored to the Apache's mission requirements, potentially offering improved power, fuel efficiency, or durability compared to earlier T700 models. The procurement of these engines directly supports the continued operational readiness and effectiveness of the Apache attack helicopter fleet, a critical asset for ground support and reconnaissance missions.
What is the track record of General Electric Company in supplying engines to the Department of Defense?
General Electric (GE) has a long and extensive track record as a major supplier of engines and propulsion systems to the Department of Defense (DoD) and other military organizations globally. The T700 engine family, including variants like the T701D, has been a cornerstone of U.S. Army aviation for many years, powering both the UH-60 Black Hawk and the AH-64 Apache helicopters. GE's experience spans decades, encompassing design, manufacturing, testing, and sustainment of these critical components. Their involvement signifies a deep understanding of military requirements, stringent quality standards, and the complexities of defense contracting. While this specific award is sole-source, GE's overall history with the DoD is characterized by numerous large-scale contracts across various aircraft platforms, indicating a substantial and established relationship.
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: $35,883,300
Exercised Options: $35,883,300
Current Obligation: $35,883,300
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: 2019-12-02
Current End Date: 2021-06-30
Potential End Date: 2021-06-30 12:06:00
Last Modified: 2021-11-17
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