DoD Awards $26.6M for 24 GE T700 Engines for Apache UK, Sole-Sourced
Contract Overview
Contract Amount: $26,656,214 ($26.7M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2020-05-07
End Date: 2023-05-31
Contract Duration: 1,119 days
Daily Burn Rate: $23.8K/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-0397 IS TO PROCURE TWENTY-FOUR EACH 701D ENGINES UNDER SLIN 2201AA IN SUPPORT OF APACHE UNITED KINGDOM, FOR CY 2022 DELIVERIES.
Place of Performance
Location: WILBRAHAM, HAMPDEN County, MASSACHUSETTS, 01095
Plain-Language Summary
Department of Defense obligated $26.7 million to GENERAL ELECTRIC COMPANY for work described as: T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-20-F-0397 IS TO PROCURE TWENTY-FOUR EACH 701D ENGINES UNDER SLIN 2201AA IN SUPPORT OF APACHE UNITED KINGDOM, FOR CY 2022 DELIVERIES. Key points: 1. Procurement of 24 GE T700 engines for Apache UK aircraft. 2. Sole-source award to General Electric Company, indicating limited competition. 3. Firm fixed price contract type suggests cost certainty but may limit negotiation. 4. Spending supports critical defense capabilities for allied nations.
Value Assessment
Rating: fair
The award of $26.6 million for 24 engines at approximately $1.1 million per unit appears within a reasonable range for specialized aerospace components. However, without detailed cost breakdowns or comparisons to similar sole-source procurements, a definitive value assessment is challenging.
Cost Per Unit: $1,106,509
Competition Analysis
Competition Level: sole-source
This delivery order was not competed, meaning General Electric Company was the only source considered. This lack of competition limits price discovery and potentially leads to higher costs than if multiple vendors had bid.
Taxpayer Impact: Taxpayer funds are used for this procurement, and the sole-source nature raises concerns about whether the best possible price was achieved.
Public Impact
Supports the operational readiness of UK Apache helicopters, a key NATO ally. Ensures continued availability of critical engine components for military aviation. Highlights reliance on a single manufacturer for specialized defense equipment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Lack of transparency in pricing due to no-bid contract.
- Potential for higher costs without competitive pressure.
Positive Signals
- Procurement supports a critical allied defense program.
- Firm fixed price contract provides cost predictability.
- Long-term support for essential military hardware.
Sector Analysis
This procurement falls within the Aircraft Engine and Engine Parts Manufacturing sector. Spending benchmarks for similar specialized military engine components can vary widely based on technology, quantity, and sole-source status. The $1.1M per unit cost is significant for individual components.
Small Business Impact
This contract was awarded directly to General Electric Company and does not indicate any subcontracting opportunities for small businesses. The nature of specialized engine manufacturing often involves large prime contractors.
Oversight & Accountability
The Department of the Army, under the Department of Defense, issued this delivery order. Oversight would typically involve contract management reviews to ensure delivery timelines and specifications are met, though competitive oversight is absent.
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 due to lack of competition.
- Lack of transparency in cost justification.
- Dependency on a single supplier for critical components.
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 $26.7 million to GENERAL ELECTRIC COMPANY. T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-20-F-0397 IS TO PROCURE TWENTY-FOUR EACH 701D ENGINES UNDER SLIN 2201AA IN SUPPORT OF APACHE UNITED KINGDOM, FOR CY 2022 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 $26.7 million.
What is the period of performance?
Start: 2020-05-07. End: 2023-05-31.
What is the justification for the sole-source award, and were alternative solutions explored?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one vendor can meet the requirement. For this T700 engine, it's likely due to General Electric's established role and potential intellectual property. Exploring alternatives would involve assessing if other manufacturers could adapt or if refurbished engines were viable, which may not have been feasible or cost-effective.
How does the per-unit cost compare to previous T700 engine procurements or similar sole-source contracts?
A direct comparison of the $1.1 million per-unit cost requires access to historical pricing data for T700 engines and benchmarks for sole-source procurements of similar complexity. Without this data, it's difficult to definitively state if this price is advantageous or inflated. Factors like inflation, specific configurations, and the duration since the last procurement significantly influence cost.
What is the long-term strategy for ensuring competitive sourcing for critical engine components like the T700?
The long-term strategy likely involves a mix of strategies. This could include fostering competition for future engine models, investing in research and development for alternative technologies, or negotiating long-term agreements with existing suppliers that include price reduction clauses. Periodic market research and potential 'should-cost' analyses can also inform future sourcing decisions to mitigate sole-source risks.
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: $26,656,214
Exercised Options: $26,656,214
Current Obligation: $26,656,214
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: 2020-05-07
Current End Date: 2023-05-31
Potential End Date: 2023-05-31 12:05:00
Last Modified: 2021-11-17
More Contracts from General Electric Company
- 200607!387702!1700!n00019!naval AIR Systems Command !N0001906C0088 !A!N! !N! ! !20060424!20090131!001408509!001408509!001367960!n!general Electric Company !1000 Western AVE !lynn !ma!01905!37490!009!25!lynn !essex !mass !+000018238000!n!n!000000000000!2840!gas Turbines and JET Engines, Acft & Comps !a1b!aircraft Engines and Spares !000 !NOT Discernable !336412!E! !3! ! ! ! ! !99990909!B! ! !A! !d!u!j!1!001!n!1a!z!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!b!y! ! ! !Y!1719!N00019!0001! ! — $2.4B (Department of Defense)
- Adaptive Engine Transition Program (aetp) — $2.1B (Department of Defense)
- 200608!001069!2100!w58rgz!usa Aviation and Missile Command!w58rgz06c0038 !A!N! !Y! ! !20051215!20101231!137488664!137488664!001367960!n!general Electric Company !1 Neumann WAY !cincinnati !oh!45215!15000!061!39!cincinnati !hamilton !ohio !+000177879422!n!n!000000000000!r706!logistics Support Services !a1b!aircraft Engines and Spares !000 !NOT Discernable !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !d!n!j!1!001!n!1g!z!n!z! ! !Y!C!N! ! ! !a!a!a!a!000!a!d!n! ! ! ! ! ! !0001! ! — $1.6B (Department of Defense)
- 200210!004379!1700!AA427 !naval AIR Systems Command !N0001901C0147 !A!N! !N!P00001 !20020508!20031130!001408509!001408509!001367960!n!general Electric Company Inc !1000 Western AVE !lynn !ma!01910!37490!009!25!lynn !essex !mass !+000060619860!n!n!000000000000!2840!gas Turbines and JET Engines, Acft & Comps !a1b!aircraft Engines and Spares !2bjn!f414-Ge-400 !336412!E! !1! ! !C! ! !99990909!B! ! !A! !d!n!j!1!001!n!1a!a!w!f! ! !N!C!N! ! ! !a!a!a!a!000!a!b!y! ! ! ! ! ! !0001! — $1.5B (Department of Defense)
- F414-GE-400 Engines — $1.2B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)