Department of the Army awards $28.3M for 36 T701D UH60M engines, citing sole-source procurement
Contract Overview
Contract Amount: $28,314,737 ($28.3M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-01-31
End Date: 2024-07-31
Contract Duration: 912 days
Daily Burn Rate: $31.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-22-F-0145 IS TO PROCURE THIRTY SIX (36) 701D UH60M ENGINES IN SUPPORT OF UHPO PROGRAM, FOR CY 2023 DELIVERIES.
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $28.3 million to GENERAL ELECTRIC COMPANY for work described as: T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-22-F-0145 IS TO PROCURE THIRTY SIX (36) 701D UH60M ENGINES IN SUPPORT OF UHPO PROGRAM, FOR CY 2023 DELIVERIES. Key points: 1. Value for money assessed against market rates for similar aircraft engines. 2. Sole-source procurement limits competitive dynamics and potential for price reduction. 3. Risk indicators include reliance on a single supplier for critical components. 4. Performance context tied to UHPO program support and CY 2023 deliveries. 5. Sector positioning within the Aircraft Engine and Engine Parts Manufacturing industry. 6. Contract duration extends over 912 days, indicating a long-term need.
Value Assessment
Rating: fair
The contract value of $28.3 million for 36 T701D UH60M engines appears to be within a reasonable range for specialized aviation components, however, without a competitive bidding process, it is difficult to definitively benchmark its value against market alternatives. The firm-fixed-price structure offers cost certainty to the government. Further analysis would require comparison with previous sole-source awards for similar engine types or publicly available pricing data from the manufacturer for non-governmental sales.
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 only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down prices through market forces. The justification for sole-source procurement would need to be thoroughly reviewed to ensure it aligns with federal acquisition regulations.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not achieve the best possible price due to the absence of competitive pressure. This limits the government's ability to leverage market dynamics for cost savings.
Public Impact
The primary beneficiaries are the U.S. Army's aviation units relying on the UH60M Black Hawk helicopter fleet. The contract delivers 36 T701D engines, crucial for maintaining the operational readiness and capability of these helicopters. Geographic impact is national, supporting Army operations across various deployments. Workforce implications include supporting jobs at General Electric Company and its supply chain partners involved in engine manufacturing and maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings for taxpayers.
- Long contract duration (912 days) may tie the government to specific technology or pricing for an extended period.
- Reliance on a single supplier for critical engine components could pose supply chain risks.
- Lack of transparency in the sole-source justification process.
Positive Signals
- Procurement of essential engines ensures continued operational readiness of critical UH60M aircraft.
- Firm-fixed-price contract provides cost certainty for the government.
- Award supports a key defense contractor and its associated workforce.
- Delivery is scheduled for CY 2023, indicating timely support for Army requirements.
Sector Analysis
The Aircraft Engine and Engine Parts Manufacturing sector is a critical component of the aerospace and defense industry. This contract falls within the specialized niche of manufacturing engines for military helicopters. The market is characterized by high barriers to entry due to complex technology, stringent quality requirements, and significant R&D investment. Major players like General Electric Company dominate this segment. Benchmarking spending in this area typically involves comparing unit costs for similar military-grade engines, considering factors like thrust, fuel efficiency, and maintenance requirements.
Small Business Impact
This contract does not appear to include a small business set-aside. Given the specialized nature of aircraft engine manufacturing, it is unlikely that small businesses would be primary contractors for such a requirement. However, General Electric Company may engage small businesses as subcontractors for specific components or services, contributing to the broader small business ecosystem within the defense supply chain.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The firm-fixed-price nature provides some cost control. Transparency regarding the sole-source justification and the specific terms of the delivery order would be subject to Freedom of Information Act requests and internal audit processes. The Defense Contract Audit Agency (DCAA) may also conduct audits to ensure compliance and cost reasonableness.
Related Government Programs
- UH60M Black Hawk Helicopter Procurement
- Army Aviation Modernization Programs
- Aircraft Engine Manufacturing Contracts
- Defense Logistics Agency (DLA) Aviation Support
Risk Flags
- Sole Source Procurement
- Potential for Price Escalation
- Supply Chain Dependency
Tags
defense, department-of-the-army, aircraft-engine-manufacturing, sole-source, delivery-order, firm-fixed-price, uh60m, t701d-engine, massachusetts, general-electric-company
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.3 million to GENERAL ELECTRIC COMPANY. T700 ENGINE REQUIREMENT: THE PURPOSE OF THIS DELIVERY ORDER W58RGZ-22-F-0145 IS TO PROCURE THIRTY SIX (36) 701D UH60M ENGINES IN SUPPORT OF UHPO PROGRAM, FOR CY 2023 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 $28.3 million.
What is the period of performance?
Start: 2022-01-31. End: 2024-07-31.
What is the historical spending pattern for T701D engines or similar UH60M helicopter engines by the Department of the Army?
Historical spending data for T701D engines and similar components for the UH60M Black Hawk helicopter would reveal trends in procurement volume, pricing, and the prevalence of competitive versus sole-source awards. Analyzing past contracts, such as those awarded under different delivery orders or for different quantities, can establish a baseline for cost. For instance, if previous awards for comparable engine sets were significantly lower or obtained through competitive bidding, it would raise questions about the current $28.3 million sole-source award's value. Examining the frequency of engine overhauls and replacements over the life cycle of the UH60M fleet also provides context for sustained spending in this category. Without access to detailed historical contract databases, a precise comparison is challenging, but general trends in defense aviation spending can indicate whether this award aligns with typical investment levels for fleet sustainment.
How does the per-unit cost of the T701D engine in this award compare to publicly available pricing or industry benchmarks for similar military helicopter engines?
The per-unit cost for the T701D engine in this award is approximately $786,242 ($28,314,736.92 / 36). Benchmarking this against similar military helicopter engines requires careful consideration of engine class, thrust, technological sophistication, and intended application. Engines for comparable medium-lift helicopters, such as those used by other branches of the U.S. military or allied nations, can serve as reference points. However, direct comparisons are often difficult due to proprietary pricing, varying configurations, and different support packages included. Industry reports or analyses of publicly awarded contracts for engines like the T700 series (which the T701D is a variant of) might offer some insight. Given the sole-source nature of this award, it is presumed that the government has conducted some form of internal cost analysis or relied on historical pricing data to deem the price reasonable, but external validation against market rates is limited.
What is General Electric Company's track record in supplying T700 series engines to the U.S. military, and have there been past performance issues?
General Electric Company (GE) has a long and established track record as the primary supplier of T700 series engines, including variants like the T701D, for the U.S. Army's UH-60 Black Hawk and AH-64 Apache helicopters. The T700 engine family is a cornerstone of Army aviation, known for its reliability and performance. GE has consistently delivered these engines under numerous contracts over several decades. While specific performance issues are not widely publicized for this particular engine type in recent history, like any complex aerospace component, engines require ongoing maintenance, upgrades, and occasional repairs. GE's performance is typically evaluated through contractually mandated metrics and past performance reviews during recompetes. For this sole-source award, it implies that GE's past performance was deemed satisfactory, or that the specific requirements necessitated their unique capability without a viable alternative.
What are the specific risks associated with procuring critical helicopter engines on a sole-source basis, particularly concerning long-term sustainment and technological obsolescence?
Procuring critical helicopter engines on a sole-source basis presents several risks. Firstly, it eliminates competitive pressure, potentially leading to higher prices and reduced incentives for the sole provider to innovate or offer cost efficiencies. Secondly, it creates a dependency on a single supplier, making the government vulnerable to supply chain disruptions, price increases, or changes in the supplier's business strategy. For long-term sustainment, this dependency can be problematic if the sole provider decides to discontinue the engine model or significantly raise support costs. Regarding technological obsolescence, a sole-source arrangement might slow down the adoption of newer, more advanced engine technologies, as the incumbent supplier may have less incentive to push for upgrades if their current product is still in demand and meets minimum contract specifications. This can impact the overall modernization and operational effectiveness of the helicopter fleet over time.
What is the strategic importance of the T701D engine to the UH60M program, and how does this procurement align with the Army's broader aviation modernization goals?
The T701D engine is a critical component for the operational readiness and capability of the UH-60M Black Hawk helicopter, a workhorse platform for the U.S. Army. The UH60M represents a significant portion of the Army's medium-lift utility helicopter fleet, essential for troop transport, medical evacuation, and various support missions. Procuring these engines ensures the continued flight operations and availability of these vital aircraft. While this specific procurement focuses on sustaining the current fleet, it indirectly supports broader Army aviation modernization goals by maintaining the operational integrity of existing platforms. However, it does not inherently represent a modernization step itself. The Army's long-term modernization strategy likely involves evaluating next-generation engine technologies or potentially replacing the UH-60M platform in the future. This contract ensures that the current fleet remains viable until such future decisions are implemented.
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: $28,314,737
Exercised Options: $28,314,737
Current Obligation: $28,314,737
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W58RGZ15D0048
IDV Type: IDC
Timeline
Start Date: 2022-01-31
Current End Date: 2024-07-31
Potential End Date: 2024-07-31 12:07:00
Last Modified: 2023-10-25
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