DoD awards $23.3M for T700 engine parts to General Electric, a sole-source acquisition
Contract Overview
Contract Amount: $23,276,922 ($23.3M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-09-28
End Date: 2024-12-31
Contract Duration: 825 days
Daily Burn Rate: $28.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CONTRACT FOR T700 ENGINES. NEW ORDER FOR QUANTITY 8 401C ENGINES AND QUANTITY 2 401C SPARES FOR AUSTRALIA.
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $23.3 million to GENERAL ELECTRIC COMPANY for work described as: CONTRACT FOR T700 ENGINES. NEW ORDER FOR QUANTITY 8 401C ENGINES AND QUANTITY 2 401C SPARES FOR AUSTRALIA. Key points: 1. This contract represents a sole-source award for critical aircraft engine components. 2. The acquisition is for a specific quantity of engines and spare parts for Australia. 3. The fixed-price contract type aims to provide cost certainty for the government. 4. The duration of the contract extends into late 2024. 5. The award falls under the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: fair
The contract value of $23.3 million for 8 engines and 2 spares is difficult to benchmark without detailed specifications and market comparisons. As a sole-source award, the government may not have achieved the best possible pricing. However, the firm-fixed-price structure provides some cost predictability. Further analysis would require understanding the specific engine model and its market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning competition was not sought. This typically occurs when a specific contractor possesses unique capabilities or when urgency dictates. The lack of competition limits price discovery and may result in higher costs compared to a fully competed procurement.
Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive pricing, potentially leading to higher overall expenditure for essential defense equipment.
Public Impact
The primary beneficiary is the Australian government, receiving critical T700 engine components. The services delivered include the provision of new aircraft engines and spare parts. The geographic impact is international, supporting a foreign military sale. Workforce implications are primarily within General Electric's manufacturing facilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated prices for taxpayers.
- Sole-source nature limits opportunities for new market entrants.
- Dependence on a single supplier for critical components can pose supply chain risks.
Positive Signals
- Ensures delivery of critical components to a key ally.
- Firm-fixed-price contract provides budget certainty.
- Supports continued operation and maintenance of existing T700 engine fleets.
Sector Analysis
The Aircraft Engine and Engine Parts Manufacturing sector is a highly specialized and capital-intensive industry. Major players like General Electric dominate the market for complex military aircraft engines. This contract fits within the broader defense industrial base, supplying essential components for rotary-wing aircraft. Benchmarking would typically involve comparing prices for similar engine models or spare parts, which is challenging in a sole-source context.
Small Business Impact
This contract does not appear to involve small business set-asides. As a sole-source award to a large prime contractor, there are no direct subcontracting implications for small businesses specified in this award notice. The primary focus is on the prime contractor's capabilities.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management systems. Accountability is maintained through the firm-fixed-price agreement and delivery schedules. Transparency is limited due to the sole-source nature, but contract award data is publicly available.
Related Government Programs
- T700 Engine Support Contracts
- Foreign Military Sales Aircraft Components
- Rotary-Wing Aircraft Maintenance
- Defense Industrial Base Suppliers
Risk Flags
- Sole-source acquisition
- Potential for higher cost
- Limited competition
Tags
defense, department-of-defense, department-of-the-army, aircraft-engine-manufacturing, sole-source, foreign-military-sale, firm-fixed-price, general-electric, australia, t700-engine, parts-and-components
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.3 million to GENERAL ELECTRIC COMPANY. CONTRACT FOR T700 ENGINES. NEW ORDER FOR QUANTITY 8 401C ENGINES AND QUANTITY 2 401C SPARES FOR AUSTRALIA.
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 $23.3 million.
What is the period of performance?
Start: 2022-09-28. End: 2024-12-31.
What is the historical spending pattern for T700 engines and parts with General Electric?
Historical spending data for T700 engines and parts with General Electric would reveal trends in procurement volume, pricing, and contract types over time. Analyzing past awards can indicate whether this $23.3 million order is consistent with previous acquisition levels or represents an increase or decrease. It can also highlight if sole-source awards have been common for this specific engine type or if competitive procurements have been utilized in the past. Understanding the historical context is crucial for assessing the current award's value and necessity, and for identifying any potential shifts in procurement strategy or market dynamics affecting the T700 engine program.
How does the unit cost of these T700 engines compare to similar military helicopter engine procurements?
Benchmarking the unit cost of these T700 engines against similar military helicopter engine procurements is challenging without detailed specifications and market data. However, if comparable engines (e.g., other turboshaft engines of similar power output and complexity) have been procured competitively, a comparison could be made. For instance, if similar engines were acquired at a significantly lower per-unit cost in recent competitive bids, it would raise concerns about the value for money in this sole-source award. Conversely, if market rates for comparable engines are in a similar range, the pricing might be considered fair, albeit not optimized through competition. The specific model (401C) and its intended application are key factors in such a comparison.
What are the specific risks associated with a sole-source award for critical aircraft engine components?
The primary risks associated with a sole-source award for critical aircraft engine components include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a heightened dependence on a single supplier. This dependence can create vulnerabilities in the supply chain, making the government susceptible to production delays, price increases, or even supply disruptions if the sole provider faces operational issues. Furthermore, it limits opportunities for other qualified manufacturers to enter the market or demonstrate their capabilities, potentially stifling broader industry competition and technological advancement in the long run. For taxpayers, the risk is a less efficient use of public funds.
What is General Electric's track record in delivering T700 engine components to the DoD and international partners?
General Electric has a long-standing and extensive track record as the primary manufacturer and supplier of T700 engines and related components to the U.S. Department of Defense and numerous international partners. The T700 engine is a widely used turboshaft engine powering various military helicopters, including the Black Hawk and Apache. GE's history with this engine family typically involves robust manufacturing capabilities, established support infrastructure, and a deep understanding of the operational requirements. While specific performance metrics for every contract vary, GE's overall reliability in producing and supporting the T700 is generally considered strong, underpinning its continued role as a sole-source provider for certain configurations and international sales.
How does this contract align with broader U.S. foreign military sales objectives and defense cooperation with Australia?
This contract directly aligns with U.S. foreign military sales (FMS) objectives by providing essential defense equipment to a key ally, Australia. Supporting Australia's military capabilities enhances interoperability and strengthens regional security, which are core tenets of U.S. foreign policy and defense cooperation. The T700 engine is a critical component for many modern military aircraft, and ensuring its availability to allies like Australia contributes to their operational readiness and effectiveness. Such sales also support the U.S. defense industrial base by providing sustained demand for advanced manufacturing, thereby maintaining critical skills and production capacity.
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: $23,276,922
Exercised Options: $23,276,922
Current Obligation: $23,276,922
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: 2022-09-28
Current End Date: 2024-12-31
Potential End Date: 2024-12-31 12:12:00
Last Modified: 2025-01-29
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)