DoD awards $44.9M to General Electric for 57 T700 engine installs on UH-60M helicopters
Contract Overview
Contract Amount: $44,906,679 ($44.9M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-11-30
End Date: 2025-12-31
Contract Duration: 1,127 days
Daily Burn Rate: $39.8K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CONTRACT FOR T700 ENGINES. NEW ORDER FOR QUANTITY 57 701D UH-60M INSTALLS FOR UHPO.
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $44.9 million to GENERAL ELECTRIC COMPANY for work described as: CONTRACT FOR T700 ENGINES. NEW ORDER FOR QUANTITY 57 701D UH-60M INSTALLS FOR UHPO. Key points: 1. Contract awarded to a single, established supplier, raising questions about competitive pricing. 2. Focus on essential aircraft components highlights the critical nature of this procurement. 3. Long-term delivery schedule suggests sustained operational needs for the UH-60M fleet. 4. Firm Fixed Price contract type offers cost certainty but may limit flexibility. 5. Sole-source award necessitates careful review of price reasonableness and justification. 6. Procurement falls under the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $44.9 million for 57 engine installations appears high without competitive benchmarking. Given the sole-source nature, a detailed price analysis is crucial to ensure fair value. Comparing this per-unit cost to historical sole-source awards for similar engine installations or to publicly available pricing for T700 engines (if available) would be necessary to assess reasonableness. The lack of competition inherently limits the government's ability to secure the best possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, General Electric Company, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, potentially leading to higher costs for the government.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competition. Without competing offers, the government cannot be assured it received the most cost-effective solution available in the market.
Public Impact
The primary beneficiaries are the U.S. Army, ensuring the continued operational readiness of its UH-60M Black Hawk helicopter fleet. Services delivered include the installation of 57 T700-701D engines, crucial for helicopter performance and safety. The geographic impact is primarily within the operational theaters where the UH-60M fleet is deployed, supporting military missions. Workforce implications include specialized technicians at General Electric and potentially at Army maintenance facilities responsible for the installations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs for taxpayers.
- Lack of transparency in the justification for sole-source procurement.
- Reliance on a single supplier for critical engine components could pose supply chain risks.
- Firm Fixed Price contract may not account for potential cost efficiencies achievable through competition.
Positive Signals
- Award to a known, established contractor (General Electric) with a track record in engine manufacturing.
- Firm Fixed Price contract provides cost certainty for the awarded amount.
- Focus on essential aircraft components ensures continued operational capability for critical military assets.
- Long-term contract duration (through 2025) provides stability for planning and execution.
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and a concentrated market with a few dominant players like General Electric. The total U.S. federal spending on aircraft engines and parts is substantial, supporting military readiness and commercial aviation. This specific procurement addresses a niche but vital need for maintaining the operational readiness of a key military helicopter platform.
Small Business Impact
This contract does not appear to include a small business set-aside. Given the sole-source nature and the specialized product (aircraft engines), it is unlikely that small businesses would be primary contractors. However, General Electric may engage small businesses as subcontractors for certain components or services, though this is not explicitly detailed in the provided data. The impact on the small business ecosystem is likely minimal for this specific award.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The Defense Contract Management Agency (DCMA) may also provide oversight for contract performance and quality assurance. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- UH-60 Black Hawk Helicopter Procurement
- T700 Engine Support Contracts
- Department of the Army Aviation Sustainment Programs
- Aircraft Engine Manufacturing Contracts
- Defense Logistics Agency Aviation Support
Risk Flags
- Sole-source award
- Lack of competitive pricing justification
- Potential for cost overruns if contractor efficiency is low
- Reliance on a single supplier for critical components
Tags
defense, department-of-defense, department-of-the-army, aircraft-engine-manufacturing, sole-source, firm-fixed-price, delivery-order, uh-60m, t700-engine, massachusetts, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $44.9 million to GENERAL ELECTRIC COMPANY. CONTRACT FOR T700 ENGINES. NEW ORDER FOR QUANTITY 57 701D UH-60M INSTALLS FOR UHPO.
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 $44.9 million.
What is the period of performance?
Start: 2022-11-30. End: 2025-12-31.
What is General Electric's track record with T700 engine installations for the U.S. Army?
General Electric Company is the original equipment manufacturer for the T700 engine family, which has been a workhorse for various military rotorcraft, including the UH-60 Black Hawk, for decades. Their track record with T700 installations is extensive, encompassing numerous upgrades, overhauls, and new installations across different variants of the Black Hawk and other aircraft like the AH-64 Apache. The Army has historically relied on GE for T700 engine support, including new production, spare parts, and maintenance services. This long-standing relationship suggests a deep understanding of the engine's performance characteristics and installation requirements, contributing to the justification for sole-source awards in specific instances where specialized knowledge or unique capabilities are paramount.
How does the $44.9 million contract value compare to previous T700 engine installation contracts?
Direct comparison of this $44.9 million contract value for 57 installations is challenging without access to historical contract databases and specific details of prior awards. However, the average cost per installation is approximately $787,840 ($44.9M / 57). Previous sole-source awards for similar engine installations, especially those involving upgrades or specific configurations like the 701D for the UH-60M, could serve as benchmarks. If comparable sole-source awards for the same engine model and aircraft type exist, their values and the justifications provided would be key to assessing if this current award represents a fair price. Without such comparative data, it's difficult to definitively state whether this value is higher or lower than historical norms.
What are the primary risks associated with this sole-source contract for T700 engine installations?
The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. General Electric, as the sole provider, may not have the same incentive to offer the lowest possible price compared to a competitive scenario. Another risk is the potential for supply chain disruptions if GE faces internal production issues or if there are unforeseen global supply chain challenges affecting engine components. Furthermore, a sole-source award can reduce the government's leverage in negotiating terms and conditions, potentially leading to less favorable contract clauses. Finally, there's a risk of vendor lock-in, making it difficult and costly to switch to alternative suppliers or technologies in the future.
How does the firm-fixed-price contract type impact the government's financial exposure?
The Firm Fixed Price (FFP) contract type offers significant financial certainty for the government. Under an FFP agreement, the contractor, General Electric, agrees to perform the work for a predetermined price, regardless of the actual costs incurred. This means the government's financial exposure is capped at the $44.9 million award amount. Any cost overruns experienced by GE are absorbed by the contractor, not the government. This structure incentivizes the contractor to manage its costs efficiently to maximize profit. However, it also means that if GE achieves significant cost savings below the FFP, the government does not benefit from those savings, unlike in cost-reimbursement contracts.
What is the historical spending trend for T700 engine-related procurements by the Department of the Army?
Historical spending trends for T700 engine-related procurements by the Department of the Army indicate a consistent and substantial investment over many years. The T700 engine family is integral to the Army's rotorcraft fleet, particularly the UH-60 Black Hawk and AH-64 Apache. Spending typically encompasses new engine procurements, spare parts, depot-level maintenance, overhauls, and upgrades. Given the long service life of these platforms and the continuous need for operational readiness, annual spending on T700 engines and associated services often runs into hundreds of millions of dollars across various contract vehicles. This specific $44.9 million award represents a portion of that ongoing, significant investment in maintaining and upgrading the engine fleet.
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: $44,906,679
Exercised Options: $44,906,679
Current Obligation: $44,906,679
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: 2022-11-30
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 12:12:00
Last Modified: 2025-07-10
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