DoD spent $29.5M on aircraft engine parts, with General Electric Company awarded a sole-source contract
Contract Overview
Contract Amount: $29,509,759 ($29.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2010-06-22
End Date: 2016-03-15
Contract Duration: 2,093 days
Daily Burn Rate: $14.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ROTOR, TURBINE, AIRCRAFT
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $29.5 million to GENERAL ELECTRIC COMPANY for work described as: ROTOR, TURBINE, AIRCRAFT Key points: 1. Contract awarded for aircraft engine and engine parts manufacturing. 2. Significant portion of spending allocated to a single contractor. 3. Contract duration of over 2000 days indicates long-term need. 4. Firm Fixed Price contract type suggests predictable costs. 5. No small business set-aside, raising questions about broader economic impact.
Value Assessment
Rating: fair
The total contract value of $29.5 million for aircraft engine parts appears substantial. Without specific details on the parts procured or their criticality, a direct value-for-money assessment is challenging. Benchmarking against similar sole-source contracts for specialized aerospace components would be necessary to determine if the pricing is competitive. The firm fixed-price structure offers cost certainty, but the lack of competition limits the potential for price reductions.
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 typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the sole authorized supplier for the required parts. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price.
Public Impact
The Department of Defense benefits from the supply of critical aircraft engine parts. Maintenance and operational readiness of military aircraft are supported. The contract supports the manufacturing sector, specifically aerospace components. Employment within General Electric Company's manufacturing facilities is sustained.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may result in higher prices for taxpayers.
- Sole-source nature limits opportunities for other businesses to supply these parts.
- Dependence on a single supplier could pose supply chain risks.
Positive Signals
- Firm Fixed Price contract provides cost predictability.
- Long contract duration suggests a stable, ongoing requirement.
- Award to a major manufacturer like GE implies access to established quality and expertise.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engine components. The market for such specialized parts is often characterized by high barriers to entry due to technical expertise, intellectual property, and stringent quality requirements. Spending in this area is critical for maintaining military readiness and supporting the broader defense industrial base. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition contracts for similar high-value, specialized aerospace parts.
Small Business Impact
The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in supplying these critical aircraft engine parts were not actively pursued through this specific award. The impact on the small business ecosystem is therefore minimal for this particular contract, as the entire value was directed to a large prime contractor.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The Defense Contract Management Agency (DCMA) likely played a role in contract administration and ensuring compliance. Transparency is limited due to the sole-source nature, but contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Aircraft Engine Maintenance
- Defense Logistics
- Aerospace Manufacturing
- Military Aircraft Parts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for higher costs
Tags
defense, department-of-defense, general-electric-company, aircraft-engine-parts, sole-source, firm-fixed-price, manufacturing, aerospace, long-term-contract, massachusetts
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.5 million to GENERAL ELECTRIC COMPANY. ROTOR, TURBINE, AIRCRAFT
Who is the contractor on this award?
The obligated recipient is GENERAL ELECTRIC COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $29.5 million.
What is the period of performance?
Start: 2010-06-22. End: 2016-03-15.
What specific aircraft engine parts were procured under this contract?
The provided data indicates the contract was for 'Aircraft Engine and Engine Parts Manufacturing' (NAICS 336412). However, the specific types or part numbers of the engines and components are not detailed in this summary. To understand the precise nature of the procurement, one would need to consult the contract's statement of work or detailed line item descriptions. This information is crucial for assessing the criticality of the parts and the justification for a sole-source award.
What is the justification for awarding this contract on a sole-source basis?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For aircraft engine parts, this often stems from proprietary designs, unique manufacturing processes, or specific certifications held by a single manufacturer, such as General Electric in this case. The government would have had to document the specific reasons, such as the unavailability of competitive sources or the need for compatibility with existing platforms, to justify bypassing the standard competitive bidding process. Without access to the specific justification documentation, it is presumed that GE was the only viable option.
How does the $29.5 million contract value compare to historical spending on similar aircraft engine parts?
Comparing the $29.5 million contract value requires context on the specific parts and their typical lifecycle costs. If these parts are high-value, long-lead-time components for a specific fleet of aircraft, this amount might be reasonable for the contract's duration (2010-2016). However, without knowing the exact components, it's difficult to benchmark. Historical spending data for similar sole-source procurements of engine components from GE or other major manufacturers would be needed for a robust comparison. Analyzing trends in unit prices over time for these parts would also provide valuable insight.
What is the track record of General Electric Company in fulfilling defense contracts for aircraft engine parts?
General Electric Company (GE) has a long and extensive track record as a major supplier of aircraft engines and parts to the U.S. military and commercial aviation sectors. They are a primary original equipment manufacturer (OEM) for many military aircraft platforms. Their history includes numerous large-scale contracts for engine production, maintenance, and spare parts. While specific performance metrics for this particular $29.5 million contract are not detailed here, GE's overall standing in the industry suggests a high level of technical capability and experience in meeting defense requirements for complex aerospace components.
What are the potential risks associated with a sole-source contract of this magnitude?
The primary risks associated with a sole-source contract of this magnitude include potential overpricing due to the lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and supply chain vulnerability if the sole supplier faces production issues or goes out of business. For taxpayers, the risk is paying a premium for goods or services that might be available at a lower cost through competitive bidding. Additionally, long-term reliance on a single source can limit the government's flexibility in adapting to new technologies or changing requirements.
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
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1000 WESTERN AVE, LYNN, MA, 06
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $29,509,759
Exercised Options: $29,509,759
Current Obligation: $29,509,759
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W58RGZ09D0041
IDV Type: IDC
Timeline
Start Date: 2010-06-22
Current End Date: 2016-03-15
Potential End Date: 2016-03-15 00:00:00
Last Modified: 2012-06-11
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