General Electric Company awarded $690.7M contract by DoD for unspecified defense services over 10 years
Contract Overview
Contract Amount: $690,744,780 ($690.7M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2000-09-14
End Date: 2010-10-29
Contract Duration: 3,697 days
Daily Burn Rate: $186.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $690.7 million to GENERAL ELECTRIC COMPANY for work described as: Key points: 1. Contract value represents significant long-term commitment from the Department of Defense. 2. The duration of the contract suggests a need for sustained and critical services. 3. Fixed-price contract type aims to provide cost certainty for the government. 4. Awarded to a single, large, established contractor, indicating potential for specialized capabilities. 5. The lack of specific service details necessitates further inquiry into the nature of the work performed. 6. Geographic location of 'OHIO' may indicate a specific operational base or contractor facility.
Value Assessment
Rating: fair
The total award value of $690.7 million over approximately 10 years averages to roughly $69 million annually. Without knowing the specific services rendered, it is difficult to benchmark this against similar contracts. The firm fixed-price nature suggests an attempt to control costs, but the overall value is substantial and warrants scrutiny regarding the necessity and efficiency of the services provided over such an extended period. The absence of detailed service descriptions makes a precise value-for-money assessment challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the data does not specify the number of bids received. Full and open competition generally promotes a competitive environment, which can lead to better pricing and innovation. The fact that it was competed broadly suggests that the government sought the best value from the market.
Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and the assurance that the government explored various market options before awarding this significant contract.
Public Impact
The Department of Defense is the primary beneficiary, receiving essential services for its operations. The contract likely supports national defense objectives through the provision of critical goods or services. The geographic impact is centered around 'OHIO', suggesting potential for local economic benefits and employment. Workforce implications may include job creation and the utilization of specialized skills within the defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific service details makes it difficult to assess the true necessity and value of the contract.
- The long duration of the contract could lead to potential cost overruns if not managed effectively.
- Reliance on a single contractor for over a decade may reduce future competitive opportunities.
- The 'OHIO' location might imply a concentration of work that could be dispersed for broader economic impact.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process.
- Firm fixed-price contract type provides cost predictability for the government.
- General Electric Company is a large, established contractor with a significant track record.
- The substantial award value indicates the critical nature of the services provided to the DoD.
Sector Analysis
This contract falls within the broad defense sector, which is a major area of federal spending. The defense industry is characterized by complex supply chains, high-technology requirements, and significant government oversight. Contracts of this magnitude often involve long-term sustainment, research and development, or major system procurements. Benchmarking this spending would require detailed knowledge of the specific services, but the overall value is consistent with major defense service agreements.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions for this contract. Given the large award value and the nature of defense contracts, it is possible that subcontracting opportunities may exist for small businesses. However, without further information on subcontracting plans or goals, the direct impact on the small business ecosystem remains unclear. Analysis would be needed to determine if small businesses were actively sought for subcontracting roles.
Oversight & Accountability
The Department of Defense typically employs robust oversight mechanisms for contracts of this size and duration, including contract management teams, performance reviews, and financial audits. The Defense Contract Management Agency (DCMA) is listed as the servicing agency, suggesting they are involved in oversight. Transparency would depend on the public availability of contract performance reports and any Inspector General investigations, which are not detailed here.
Related Government Programs
- Defense Procurement
- Long-Term Service Contracts
- General Services Administration (GSA) Contracts
- Department of Defense Major Contracts
- Fixed-Price Contracts
Risk Flags
- Lack of specific service details
- Long contract duration
- Potential for cost overruns or underperformance due to fixed price over time
Tags
defense, department-of-defense, general-electric-company, firm-fixed-price, full-and-open-competition, long-term-contract, ohio, major-contract, service-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $690.7 million to GENERAL ELECTRIC COMPANY. See the official description on USAspending.
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 Contract Management Agency).
What is the total obligated amount?
The obligated amount is $690.7 million.
What is the period of performance?
Start: 2000-09-14. End: 2010-10-29.
What specific services were provided under this $690.7 million contract awarded to General Electric Company by the Department of Defense?
The provided data does not specify the exact nature of the services rendered under this contract. The contract number 'DCA' and the award date of September 14, 2000, ending on October 29, 2010, indicate a decade-long engagement. Given General Electric's diverse portfolio, these services could range from aircraft engine maintenance and support, power systems, or other specialized defense-related equipment and services. Without further details, it is impossible to ascertain the precise operational or strategic value of these services to the Department of Defense.
How does the annual average cost of this contract compare to similar long-term defense service contracts?
The contract's total value of $690.7 million over approximately 10 years averages to roughly $69 million per year. Benchmarking this against similar long-term defense service contracts is challenging without knowing the specific services. However, for major defense platforms or sustainment programs, annual costs can range from tens of millions to billions of dollars. If the services were for routine maintenance or support of a specific system, $69 million annually might be within a typical range. If it involved highly specialized or complex operations, it could be considered moderate. A direct comparison requires identifying contracts with identical or closely related service scopes.
What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?
Firm fixed-price contracts aim to provide cost certainty, but risks exist, especially for long-duration contracts like this one. For the government, the primary risk is that the contractor may not deliver the expected quality or scope if the price is set too low, potentially leading to disputes or contract termination. Conversely, if the initial pricing was overly optimistic for the contractor, they might cut corners on quality or service to maintain profitability. For a contract spanning a decade, unforeseen technological changes, inflation, or shifts in operational requirements could make the fixed price suboptimal for either party. Effective contract management and clear performance metrics are crucial to mitigate these risks.
What was General Electric Company's track record with the Department of Defense prior to and during this contract period?
General Electric has a long-standing and extensive relationship with the Department of Defense, supplying a wide array of products and services, including jet engines, power generation equipment, and various defense systems. Prior to this contract, GE was a major defense contractor. During the period of this contract (2000-2010), GE continued to be a significant player in defense contracting. Their track record generally involves large-scale, complex projects, often characterized by advanced technology and substantial value. Specific performance metrics for this particular contract would require access to contract performance reports or historical government assessments.
How has federal spending on defense services evolved since this contract was awarded in 2000?
Federal spending on defense services has seen significant fluctuations since 2000, largely influenced by geopolitical events such as the wars in Afghanistan and Iraq, and subsequent shifts in defense strategy. Immediately following 9/11, defense spending increased substantially to fund ongoing military operations and homeland security. In the years following, budgets have faced pressures from sequestration and evolving threat landscapes, leading to periods of both growth and contraction. The overall trend has been towards modernization of military capabilities, cybersecurity, and adapting to new global challenges, with defense services remaining a substantial portion of the overall defense budget.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 NEUMANN WAY, CINCINNATI, OH, 90
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2000-09-14
Current End Date: 2010-10-29
Potential End Date: 2010-10-29 00:00:00
Last Modified: 2010-06-06
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