General Electric awarded $26M for T700 engine overhaul, a critical component for Army aircraft
Contract Overview
Contract Amount: $26,093,285 ($26.1M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-03-16
End Date: 2021-10-31
Contract Duration: 594 days
Daily Burn Rate: $43.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: OVERHAUL OF T700 ENGINE, AIRCRAFT TURBINE.
Place of Performance
Location: ARKANSAS CITY, COWLEY County, KANSAS, 67005
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $26.1 million to GENERAL ELECTRIC COMPANY for work described as: OVERHAUL OF T700 ENGINE, AIRCRAFT TURBINE. Key points: 1. Value for money assessed through firm-fixed-price contract, aiming for cost certainty. 2. Full and open competition suggests a potentially competitive bidding environment. 3. Risk indicators include contract duration and reliance on a single manufacturer for specialized parts. 4. Performance context is tied to maintaining readiness of Army aviation assets. 5. Sector positioning within aircraft engine manufacturing and maintenance is a key area.
Value Assessment
Rating: good
The contract value of $26.1 million for the overhaul of T700 engines appears reasonable given the specialized nature of aircraft engine maintenance. The firm-fixed-price structure provides cost predictability for the Department of the Army. Benchmarking against similar engine overhaul contracts would provide further insight, but the scope of work likely involves significant labor and parts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and had the opportunity to bid. This approach generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The number of bidders would provide a clearer picture of the actual competition level.
Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging innovation among contractors.
Public Impact
The primary beneficiaries are the U.S. Army aviation units relying on T700-powered helicopters. Services delivered include the overhaul and repair of critical aircraft turbine engines. Geographic impact is primarily within the continental United States where Army aviation assets are based and maintained. Workforce implications include skilled technicians and engineers involved in engine maintenance and repair.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for sole-source reliance on General Electric for specific parts or expertise.
- Long-term sustainment costs for T700 engines could be significant.
- Dependence on a single contractor for critical engine overhauls poses a supply chain risk.
Positive Signals
- Firm-fixed-price contract provides cost certainty.
- Full and open competition suggests potential for competitive pricing.
- Overhaul services ensure continued operational readiness of vital military assets.
Sector Analysis
The aircraft engine manufacturing and maintenance sector is highly specialized, characterized by high barriers to entry due to complex technology, stringent quality control, and significant R&D investment. This contract falls within the defense industrial base, supporting the operational readiness of military aircraft. Spending in this area is crucial for maintaining aging fleets and ensuring national security. Comparable spending benchmarks would involve other major engine overhaul contracts for military or commercial aviation.
Small Business Impact
This contract does not appear to have a small business set-aside. The nature of aircraft engine overhaul typically requires specialized facilities and expertise, often favoring larger, established manufacturers. There is no explicit information on subcontracting plans for small businesses within this award, though it's possible they could be involved in supplying components or services indirectly.
Oversight & Accountability
The contract is subject to standard Department of Defense oversight mechanisms. Accountability is maintained through the firm-fixed-price terms and delivery schedules. Transparency is facilitated by contract award databases, though detailed performance metrics are typically internal. The Inspector General's office may conduct audits or investigations if performance issues or fraud are suspected.
Related Government Programs
- T700 Engine Maintenance and Repair
- Army Aviation Sustainment Programs
- Aircraft Turbine Engine Overhaul Contracts
- Defense Logistics Agency (DLA) Aviation Support
Risk Flags
- Potential for sole-source dependency on GE for parts/expertise.
- Long-term sustainment cost uncertainty.
- Risk of supply chain disruption affecting critical maintenance.
Tags
defense, department-of-the-army, aircraft-engine-manufacturing, full-and-open-competition, firm-fixed-price, engine-overhaul, t700-engine, general-electric, kansas, major-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.1 million to GENERAL ELECTRIC COMPANY. OVERHAUL OF T700 ENGINE, AIRCRAFT TURBINE.
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 $26.1 million.
What is the period of performance?
Start: 2020-03-16. End: 2021-10-31.
What is the historical spending trend for T700 engine overhauls by the Department of Defense?
Historical spending on T700 engine overhauls by the Department of Defense has been consistent, reflecting the ongoing need to maintain the operational readiness of helicopters utilizing this engine, such as the UH-60 Black Hawk and AH-64 Apache. While specific annual figures fluctuate based on fleet size, operational tempo, and the lifecycle of the engines, the aggregate spending over the past decade likely runs into hundreds of millions of dollars. This particular contract for $26.1 million represents a portion of that ongoing sustainment effort. Analyzing trends requires access to detailed historical contract data, looking at the number of engines overhauled, the average cost per overhaul, and the frequency of these services over time. Factors like technological upgrades to the engines or changes in maintenance philosophies (e.g., condition-based maintenance vs. scheduled overhauls) can also influence spending patterns.
How does the price of this T700 engine overhaul compare to similar contracts awarded to General Electric or other manufacturers?
Benchmarking the price of this $26.1 million T700 engine overhaul contract against similar awards requires access to a comprehensive database of defense contracts. However, given that the T700 is a widely used engine in military aviation, particularly for Black Hawk and Apache helicopters, the price is likely competitive within its niche. General Electric is the primary manufacturer, suggesting that direct comparisons might be limited to previous contracts with GE or potentially other MRO (Maintenance, Repair, and Overhaul) providers if they are authorized. The firm-fixed-price nature of this award aims to control costs, but a true value assessment would involve comparing the cost per overhaul hour or per engine against industry standards and previous government awards, considering factors like the scope of work, parts replaced, and turnaround time.
What are the key performance indicators (KPIs) used to evaluate the success of this engine overhaul contract?
Key performance indicators (KPIs) for this T700 engine overhaul contract likely focus on ensuring the engines meet stringent military specifications and are returned to service within a defined timeframe. Critical KPIs would include adherence to the delivery schedule, meeting all technical performance requirements and specifications outlined in the contract, and ensuring a high standard of workmanship with minimal defects upon return to service. Quality assurance metrics, such as the number of non-conformances or rework required, would also be closely monitored. Furthermore, the reliability of the overhauled engines in subsequent flight operations would serve as a crucial long-term performance indicator, reflecting the effectiveness of the overhaul process and the contractor's ability to restore the engines to optimal operational condition.
What is the track record of General Electric Company in fulfilling similar defense contracts, particularly for aircraft engine maintenance?
General Electric Company (GE) has a long and extensive track record in fulfilling defense contracts, particularly for aircraft engine maintenance and manufacturing. As a primary producer of many military aircraft engines, including the T700 series, GE possesses deep institutional knowledge and specialized capabilities. Historically, GE has been a reliable supplier and maintainer for the U.S. military, often holding large, multi-year sustainment contracts. While specific performance metrics for every contract are not publicly available, GE's continued role as a prime contractor for critical engine programs suggests a generally positive performance history. However, like any large contractor, there may have been instances of contract disputes, performance issues, or cost overruns on specific programs, which would be documented in contract performance databases or GAO reports.
What are the potential risks associated with relying on a single contractor, like General Electric, for the overhaul of T700 engines?
Relying heavily on a single contractor, such as General Electric, for the overhaul of T700 engines presents several potential risks. Firstly, it can lead to reduced competition in future procurements, potentially driving up prices as the government has fewer alternatives. Secondly, there's a risk of supply chain disruptions if the contractor faces production issues, labor strikes, or financial difficulties, which could impact the availability of critical engine services and delay aircraft readiness. Thirdly, a lack of alternative providers might reduce the incentive for the sole contractor to innovate or improve efficiency. Finally, dependence on one entity can create strategic vulnerabilities, particularly if geopolitical factors affect the contractor's operations or if the contractor prioritizes commercial over military needs during times of high demand.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
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: $26,093,285
Exercised Options: $26,093,285
Current Obligation: $26,093,285
Actual Outlays: $23,856,718
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W58RGZ18D0002
IDV Type: IDC
Timeline
Start Date: 2020-03-16
Current End Date: 2021-10-31
Potential End Date: 2021-10-31 12:10:00
Last Modified: 2021-09-22
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