Army awards $22.8M for 29 T700-701D engine installs to General Electric
Contract Overview
Contract Amount: $22,847,258 ($22.8M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2023-04-25
End Date: 2026-12-31
Contract Duration: 1,346 days
Daily Burn Rate: $17.0K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CONTRACT FOR T700 ENGINES, ORDER FOR 29 EACH 701D INSTALLS
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $22.8 million to GENERAL ELECTRIC COMPANY for work described as: CONTRACT FOR T700 ENGINES, ORDER FOR 29 EACH 701D INSTALLS Key points: 1. Significant investment in critical aircraft engine components. 2. Sole-source award to General Electric, a dominant player in this market. 3. Potential for higher costs due to lack of competition. 4. Long-term contract duration suggests sustained need for these engines.
Value Assessment
Rating: fair
The contract value of $22.8M for 29 engine installs appears reasonable given the specialized nature of military aircraft engines. However, without competitive bidding, it's difficult to ascertain if this represents 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, was considered. This significantly limits price discovery and may lead to less favorable terms for the government compared to a competitive process.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for these engine installations, as there was no market pressure to drive down costs.
Public Impact
Ensures continued operational readiness for Army aircraft reliant on T700 engines. Supports the maintenance and upgrade of essential military aviation assets. Impacts the supply chain for specialized aerospace manufacturing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and potential cost savings.
- Long contract duration could lock in potentially suboptimal pricing.
- Reliance on a single supplier can create supply chain vulnerabilities.
Positive Signals
- Addresses a critical need for aircraft engine components.
- Contract awarded to a known and experienced supplier.
- Firm fixed price contract provides cost certainty once awarded.
Sector Analysis
The Department of Defense is a major consumer of aircraft engine parts. Spending in this sector is often characterized by high R&D costs, specialized manufacturing, and long product lifecycles, frequently leading to concentrated markets and sole-source procurements.
Small Business Impact
This contract was awarded to General Electric Company, a large business. There is no indication that small businesses were involved in this specific procurement, either as prime contractors or significant subcontractors.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the price is fair and reasonable. Robust justification for the lack of competition should be readily available and reviewed by oversight bodies.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition
- Potential for price gouging
- Supply chain dependency
- Limited innovation opportunities
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 $22.8 million to GENERAL ELECTRIC COMPANY. CONTRACT FOR T700 ENGINES, ORDER FOR 29 EACH 701D INSTALLS
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 $22.8 million.
What is the period of performance?
Start: 2023-04-25. End: 2026-12-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?
The justification for a sole-source award typically involves factors like unique capabilities, urgent needs, or the unavailability of alternatives. The government should have conducted a price analysis, comparing the proposed price to historical data, other government contracts, or commercial price lists, to validate the reasonableness of the $22.8M award.
What are the long-term risks associated with relying on a sole-source provider for critical aircraft engine components?
Long-term risks include potential price escalation without competitive pressure, limited innovation from the supplier, and vulnerability to supply chain disruptions if the sole provider faces issues. It also reduces the government's leverage in future negotiations and could hinder the development of alternative solutions or suppliers.
How does this procurement contribute to the overall operational effectiveness and readiness of the Army's aviation assets?
This contract directly supports the operational readiness of Army aircraft by ensuring the availability of necessary engine components for installation and maintenance. This is crucial for maintaining flight hours, mission capability, and the overall effectiveness of aviation units in executing their duties.
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: $22,847,258
Exercised Options: $22,847,258
Current Obligation: $22,847,258
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: 2023-04-25
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 12:12:00
Last Modified: 2025-08-18
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