DoD's $53M Engineering Services Contract Awarded to General Electric Company Under Firm Fixed Price Terms
Contract Overview
Contract Amount: $53,036,991 ($53.0M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2021-01-01
End Date: 2022-01-31
Contract Duration: 395 days
Daily Burn Rate: $134.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TECHNICAL ENGINEERING LOGISTICAL SERVICES & SUPPLIES
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $53.0 million to GENERAL ELECTRIC COMPANY for work described as: TECHNICAL ENGINEERING LOGISTICAL SERVICES & SUPPLIES Key points: 1. Contract awarded for technical, logistical, and engineering services, indicating a broad scope of support. 2. The firm fixed-price contract type suggests a defined cost for services, potentially limiting cost overruns. 3. Awarded to a single, large incumbent contractor, raising questions about competition and potential for price optimization. 4. The contract duration of 395 days aligns with typical project-based needs for specialized engineering support. 5. Services are concentrated in Ohio, suggesting a localized impact on the regional economy and workforce. 6. The absence of small business set-aside flags indicates a focus on large prime contractors for this requirement.
Value Assessment
Rating: fair
Benchmarking the value of this $53 million contract is challenging without specific service details or comparable contract data. However, the firm fixed-price structure is generally favorable for cost control. The absence of competition, as noted below, could imply that the pricing may not have been subjected to the most rigorous market testing, potentially leading to a less than optimal value if alternatives existed. Further analysis would require understanding the specific engineering services rendered and comparing them to industry benchmarks for similar scope and complexity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that the Department of Defense did not benefit from a bidding process that could have driven down prices through market forces. This raises concerns about whether the government obtained the best possible price and value.
Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing. Without a bidding process, there's less pressure on the contractor to offer the lowest possible cost, potentially leading to higher overall expenditure.
Public Impact
The Department of Defense benefits from specialized engineering and logistical support critical for its operations. Services provided likely enhance the readiness and operational capabilities of military assets and infrastructure. The contract's geographic focus on Ohio suggests a direct impact on the state's economy and potentially its skilled workforce. General Electric Company, as the prime contractor, will be responsible for delivering these essential services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher costs for taxpayers.
- Sole-source award limits opportunities for other capable firms to secure government contracts.
- Potential for vendor lock-in if specialized knowledge resides solely with General Electric.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government.
- Award to an established contractor like General Electric suggests a focus on reliability and proven capability.
- Contract addresses critical technical, engineering, and logistical needs for the Department of Defense.
Sector Analysis
The engineering services sector is a critical component of the defense industrial base, providing essential expertise for complex military systems and infrastructure. This $53 million contract falls within the broader engineering services market, which encompasses design, consulting, and technical support. While specific market size data for this niche is not provided, the defense sector alone represents a significant portion of engineering service expenditures. The award to General Electric, a major player in defense and aerospace, aligns with industry trends where large, established firms often secure substantial government contracts for specialized technical requirements.
Small Business Impact
This contract does not appear to include any specific small business set-aside provisions, as indicated by the 'sb' flag being false. The award to a large prime contractor like General Electric suggests that subcontracting opportunities for small businesses may exist, but these are not guaranteed or mandated by the contract's structure. The absence of a set-aside means that the primary focus was on fulfilling the requirement with a large business, potentially limiting direct opportunities for small businesses to compete for the prime contract itself.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a firm fixed-price contract, the primary accountability measure is the delivery of specified services within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, with less public information available compared to competed contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's execution.
Related Government Programs
- Defense Engineering Services
- Logistical Support Contracts
- Technical Services for Military
- General Electric Defense Contracts
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for cost overruns if scope is not well-defined despite FFP.
- Limited transparency due to non-competitive nature.
Tags
defense, department-of-defense, department-of-the-army, engineering-services, logistical-services, technical-services, firm-fixed-price, sole-source, ohio, general-electric-company, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $53.0 million to GENERAL ELECTRIC COMPANY. TECHNICAL ENGINEERING LOGISTICAL SERVICES & SUPPLIES
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 $53.0 million.
What is the period of performance?
Start: 2021-01-01. End: 2022-01-31.
What specific engineering services were provided under this contract?
The provided data indicates the contract covers 'TECHNICAL ENGINEERING LOGISTICAL SERVICES & SUPPLIES' awarded to General Electric Company. However, the specific nature of the engineering services is not detailed. These could range from design and development, systems engineering, technical consulting, maintenance engineering, or specialized support for military platforms and infrastructure. Without further documentation or a detailed statement of work, the precise engineering disciplines and deliverables remain unspecified. This lack of detail makes it difficult to assess the technical scope and value proposition accurately.
How does the $53 million value compare to similar engineering services contracts within the Department of Defense?
Comparing the $53 million value requires context on the scope and duration of similar contracts. For large-scale engineering and logistical support within the Department of Defense, $53 million can represent a significant award, particularly if it covers a substantial period or highly specialized services. However, the DoD procures a vast array of services, with many contracts running into hundreds of millions or even billions of dollars for major weapon systems or infrastructure projects. Without knowing the specific deliverables, duration (395 days), and complexity, it's difficult to definitively benchmark this contract. It appears to be a substantial, but not exceptionally large, award for specialized support.
What are the primary risks associated with a sole-source award of this magnitude?
The primary risk associated with a sole-source award of this magnitude is the potential for inflated pricing due to the lack of competitive pressure. Without multiple bidders vying for the contract, the government may not achieve the best possible price. Another risk is reduced innovation, as the incumbent contractor may have less incentive to propose novel or cost-saving solutions. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to transition to a different provider in the future. There's also a risk of complacency from the contractor, assuming continued awards without rigorous performance.
What is General Electric Company's track record with the Department of Defense for similar services?
General Electric Company (GE) has a long-standing and extensive track record as a major contractor for the Department of Defense, particularly in areas related to aerospace, power generation, and advanced technologies. GE has historically supplied engines for military aircraft, power systems for naval vessels, and various other complex equipment and services. While this specific contract focuses on 'Technical Engineering Logistical Services & Supplies,' GE's broad capabilities and experience within the defense sector suggest a strong foundation for delivering such requirements. Their established presence indicates familiarity with DoD processes and a capacity to handle large-scale contracts.
What historical spending patterns exist for engineering services within the Department of the Army?
Historical spending patterns for engineering services within the Department of the Army are substantial and diverse, reflecting the vast infrastructure, equipment, and operational needs of the service. The Army procures engineering services across numerous categories, including design, construction oversight, environmental engineering, systems engineering for weapon platforms, and logistical support analysis. Spending can fluctuate based on modernization priorities, infrastructure repair needs, and specific operational deployments. While this $53 million contract is a single data point, the Army consistently awards billions annually for a wide range of engineering and technical support services, often through both competed and sole-source mechanisms.
How does the firm fixed-price (FFP) contract type mitigate risks for this type of service?
The Firm Fixed-Price (FFP) contract type is generally considered advantageous for the government when the scope of work is well-defined and risks can be reasonably anticipated. For technical, engineering, and logistical services, an FFP contract establishes a ceiling price, transferring most of the cost-risk to the contractor. This means General Electric Company is obligated to perform the work for the agreed-upon price, regardless of unforeseen cost increases they might encounter. This structure provides budget certainty for the Department of the Army and incentivizes the contractor to manage costs efficiently to maximize profit. However, if the scope is not perfectly defined, it can lead to disputes or the contractor cutting corners.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 NEUMANN WAY, CINCINNATI, OH, 45215
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $53,036,991
Exercised Options: $53,036,991
Current Obligation: $53,036,991
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W58RGZ18D0023
IDV Type: IDC
Timeline
Start Date: 2021-01-01
Current End Date: 2022-01-31
Potential End Date: 2022-01-31 00:00:00
Last Modified: 2025-04-24
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