Army awards $220.7M for T700 engine production to General Electric, a sole-source contract
Contract Overview
Contract Amount: $22,074,774 ($22.1M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-12-10
End Date: 2027-04-30
Contract Duration: 871 days
Daily Burn Rate: $25.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T700 SERIES ENGINE PRODUCTION
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $22.1 million to GENERAL ELECTRIC COMPANY for work described as: T700 SERIES ENGINE PRODUCTION Key points: 1. Contract awarded for critical aircraft engine components, indicating a reliance on established suppliers. 2. Sole-source award suggests potential lack of competitive pressure on pricing and innovation. 3. Long-term contract duration (over 2.5 years) provides stability for production but may limit agility. 4. Focus on production rather than research and development suggests mature technology. 5. The contract's value is significant, underscoring the importance of these engines to military readiness.
Value Assessment
Rating: fair
Benchmarking the value of this sole-source contract is challenging without competitive bids. However, the significant dollar amount for engine production indicates a substantial investment. Without comparative pricing data from other potential suppliers or previous competitive procurements for this specific engine model, it's difficult to definitively assess value for money. The firm fixed-price structure offers some cost certainty, but the lack of competition raises questions about whether the government is achieving 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 a unique product or service is required, or when only one responsible source is available. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple offerors.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. The government's ability to negotiate the best possible price is diminished in a sole-source scenario.
Public Impact
The U.S. Army benefits directly through the continued supply of essential T700 series engines for its aircraft fleet. This contract ensures the operational readiness and maintenance capabilities of various Army aviation platforms. The primary geographic impact is within Massachusetts, where General Electric Company is located, potentially supporting local jobs and the regional economy. Workforce implications include sustained employment for engineers, technicians, and manufacturing personnel involved in engine production at General Electric.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price negotiation leverage.
- Potential for higher costs without competitive pressure.
- Long-term commitment may not adapt to future technological shifts.
- Lack of transparency in pricing justification due to single-bidder scenario.
Positive Signals
- Ensures continuity of supply for critical defense assets.
- Leverages established expertise of a known contractor.
- Firm fixed-price contract provides budget predictability.
- Supports ongoing readiness of Army aviation units.
Sector Analysis
The T700 engine is a widely used turboshaft engine in military and civilian applications, particularly for helicopters. The market for military aircraft engines is dominated by a few large, established manufacturers. General Electric is a major player in this sector. This contract represents a portion of the broader defense spending on aviation components and sustainment, a multi-billion dollar industry. Comparable spending benchmarks would involve other large engine production contracts or sustainment agreements for similar military aircraft.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. General Electric Company is a large prime contractor. While the prime contract is not set aside for small businesses, there may be opportunities for small businesses to participate as subcontractors to General Electric. The extent of small business subcontracting will depend on GE's procurement practices and any specific subcontracting goals or requirements imposed by the Department of Defense.
Oversight & Accountability
Oversight for this contract will be managed by the Department of the Army, likely through contracting officers and program managers responsible for aviation sustainment. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency may be limited due to the sole-source nature of the award, making detailed public scrutiny of pricing justification more difficult. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- T700 Engine Sustainment Programs
- Army Aviation Modernization Efforts
- Defense Production Act Investments
- Aircraft Engine Manufacturing Contracts
Risk Flags
- Sole-source award may limit price competition.
- Long-term contract duration could pose risks if technology rapidly evolves.
- Dependence on a single supplier for critical components.
Tags
defense, department-of-defense, department-of-the-army, aircraft-engine-manufacturing, production, sole-source, firm-fixed-price, massachusetts, engines, aviation, military-readiness
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.1 million to GENERAL ELECTRIC COMPANY. T700 SERIES ENGINE PRODUCTION
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 $22.1 million.
What is the period of performance?
Start: 2024-12-10. End: 2027-04-30.
What is the historical spending trend for T700 engine production or related services with General Electric?
Analyzing historical spending requires access to detailed contract databases beyond this single award. However, the T700 engine has been in production for decades, powering numerous helicopter platforms like the Black Hawk and Apache. It is reasonable to assume that cumulative spending on T700 production and sustainment with General Electric has been substantial over its lifecycle. Previous awards for similar production runs or sustainment contracts would provide context. Without specific historical data, it's difficult to determine if the current $220.7 million award represents an increase, decrease, or stable level of investment compared to prior periods. Factors such as inflation, production volume changes, and technological upgrades would influence historical spending patterns.
How does the per-unit cost of the T700 engine under this contract compare to previous awards or industry benchmarks?
Determining the precise per-unit cost is not possible with the provided data, as the total award amount covers a production run of an unspecified quantity of engines and potentially related parts or services. Furthermore, as this is a sole-source award, direct comparison to competitive bids is not feasible. To benchmark, one would need to know the total number of engines procured under this $220.7 million contract and compare that unit price to historical sole-source awards for the same engine model, or to prices of comparable engines from other manufacturers if available. Given the sole-source nature, the government's negotiation leverage is limited, potentially leading to a higher per-unit cost than if the contract were competed.
What specific aircraft platforms will be supported by the T700 engines procured under this contract?
The T700 engine series is a versatile power plant used across a range of military aircraft, primarily helicopters. Key platforms that utilize T700 engines include the UH-60 Black Hawk utility helicopter, the AH-64 Apache attack helicopter, the CH-47 Chinook heavy-lift helicopter, and various maritime patrol and special operations aircraft. The specific allocation of engines from this $220.7 million contract to particular platforms would be determined by the U.S. Army's operational requirements, fleet readiness needs, and planned maintenance schedules. The contract's duration (ending April 2027) suggests it is intended to support ongoing operations and sustainment for these critical aviation assets.
What are the potential risks associated with a sole-source award for critical engine production?
The primary risk associated with a sole-source award for critical engine production is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible pricing. Additionally, sole-source contracts can reduce incentives for the contractor to innovate or improve efficiency, as there is no direct competition to outperform. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting future flexibility in sourcing or technology adoption. Furthermore, the absence of a competitive process can sometimes obscure the true market value of the goods or services being procured.
What is General Electric Company's track record with the U.S. military regarding engine production and sustainment?
General Electric Company (GE) has a long and extensive track record as a major supplier of aircraft engines to the U.S. military across all branches. They are a primary provider of engines for numerous fighter jets (e.g., F110, F414), bombers, transport aircraft, and helicopters (e.g., T700 series). GE has consistently secured large-value contracts for both new engine production and long-term sustainment services, often through competitive processes but also through sole-source awards when justified. Their history includes significant contributions to aviation readiness and technological advancement within the defense sector. While generally regarded as a capable and reliable supplier, like any large defense contractor, GE has faced scrutiny over pricing and contract performance in various instances throughout its history.
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $22,074,774
Exercised Options: $22,074,774
Current Obligation: $22,074,774
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W58RGZ24D0053
IDV Type: IDC
Timeline
Start Date: 2024-12-10
Current End Date: 2027-04-30
Potential End Date: 2027-04-30 00:00:00
Last Modified: 2025-08-14
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