DoD awards $45.3M for 58 T700 Engines to GE for UK, raising competition concerns
Contract Overview
Contract Amount: $45,350,026 ($45.4M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2019-12-23
End Date: 2021-12-31
Contract Duration: 739 days
Daily Burn Rate: $61.4K/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-0177 IS TO PROCURE 58 EACH 701D FMS ENGINES IN SUPPORT OF UNITED KINGDOM.
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $45.4 million to GENERAL ELECTRIC COMPANY for work described as: T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-20-F-0177 IS TO PROCURE 58 EACH 701D FMS ENGINES IN SUPPORT OF UNITED KINGDOM. Key points: 1. High value contract for critical aircraft components. 2. Sole reliance on General Electric Company for this specific engine requirement. 3. Potential risk of overpayment due to lack of competitive bidding. 4. Spending falls within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $45.3M for 58 engines suggests a per-unit cost of approximately $782,000. Without competitive bids, it's difficult to ascertain if this price is optimal compared to market rates for similar high-performance aircraft engines.
Cost Per Unit: $782,000
Competition Analysis
Competition Level: sole-source
This delivery order was not competed, indicating a sole-source award to General Electric Company. This lack of competition limits price discovery and may result in a higher cost to the government.
Taxpayer Impact: Taxpayer funds are being expended without the benefit of competitive pricing, potentially leading to a less efficient use of resources.
Public Impact
Ensures operational readiness for UK military aircraft utilizing T700 engines. Supports a key defense industrial base supplier, General Electric. Potential for increased costs due to non-competitive award. Impacts the availability of advanced engine parts for allied forces.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for price inflation
Positive Signals
- Procurement of critical defense equipment
- Supports allied military capabilities
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector (NAICS 336412). Spending in this sector is crucial for national defense and aerospace industries, often involving high-value, specialized components.
Small Business Impact
The contract was awarded to General Electric Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific delivery order.
Oversight & Accountability
The award was made via a delivery order under an existing contract. Oversight would focus on ensuring the terms of the base contract are met and that the pricing, even if sole-source, is reasonable.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing.
- Lack of transparency in price justification.
- Dependency on a single supplier.
- No small business participation noted.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.4 million to GENERAL ELECTRIC COMPANY. T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-20-F-0177 IS TO PROCURE 58 EACH 701D FMS ENGINES IN SUPPORT OF UNITED KINGDOM.
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 $45.4 million.
What is the period of performance?
Start: 2019-12-23. End: 2021-12-31.
What is the justification for awarding this contract sole-source, and what steps were taken to ensure a fair and reasonable price?
The provided data indicates the contract was 'NOT COMPETED'. A full justification for this sole-source award would typically be documented by the agency, outlining reasons such as unique capabilities, urgent need, or lack of viable alternatives. Without this documentation, assessing the fairness and reasonableness of the price is challenging, though the agency is still obligated to ensure it.
What are the long-term implications of relying on a single supplier for critical engine components like the T700?
Long-term reliance on a single supplier can create vulnerabilities, including potential supply chain disruptions, price escalation due to lack of competition, and reduced innovation. It also limits the government's leverage in future negotiations and could impact the development of alternative technologies or suppliers.
How does the per-unit cost of these T700 engines compare to publicly available benchmarks or historical data for similar procurements?
The calculated per-unit cost is approximately $782,000. Benchmarking this requires access to proprietary data or specific historical contract awards for the T700 or comparable engines. Without such data, a definitive comparison is difficult, but this figure appears substantial, underscoring the importance of competitive pricing in future awards.
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: $45,350,026
Exercised Options: $45,350,026
Current Obligation: $45,350,026
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: 2019-12-23
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 12:12:00
Last Modified: 2021-11-17
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