Air Force awards $408M to General Electric for Next Generation Adaptive Propulsion prototyping
Contract Overview
Contract Amount: $408,498,267 ($408.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2023-01-26
End Date: 2028-01-11
Contract Duration: 1,811 days
Daily Burn Rate: $225.6K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: NEXT GENERATION ADAPTIVE PROPULSION (NGAP) PROTOTYPING
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $408.5 million to GENERAL ELECTRIC COMPANY for work described as: NEXT GENERATION ADAPTIVE PROPULSION (NGAP) PROTOTYPING Key points: 1. Contract focuses on advanced engine technology, crucial for future air superiority. 2. High value award indicates significant investment in next-generation defense capabilities. 3. Sole awardee suggests specialized expertise required, potentially limiting broader industry engagement. 4. Cost-plus incentive fee structure aims to balance innovation with cost control. 5. Long performance period allows for extensive development and testing. 6. Geographic concentration in Ohio may indicate a strong regional industrial base for aerospace.
Value Assessment
Rating: good
The $408.5 million award to General Electric for NGAP prototyping represents a substantial investment in advanced aerospace technology. While direct comparisons are difficult due to the specialized nature of next-generation propulsion, GE's established role in engine manufacturing suggests a competitive bid. The cost-plus incentive fee (CPIF) structure is common for R&D efforts where final costs are uncertain, aiming to incentivize efficiency. Benchmarking this specific R&D effort against similar advanced technology prototypes is challenging without more detailed cost breakdowns, but the overall value reflects the strategic importance and complexity of the program.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple capable vendors were solicited. The specific number of bidders is not provided, but the award to a single entity, General Electric Company, suggests that GE offered the most advantageous proposal based on technical merit, cost, or a combination thereof. Full and open competition is generally expected to yield competitive pricing and innovative solutions by allowing all responsible sources to participate.
Taxpayer Impact: Taxpayers benefit from the assurance that the government sought the best possible solution through a competitive process, which should drive value and technological advancement in a critical defense area.
Public Impact
The U.S. Air Force is the primary beneficiary, seeking to enhance its future combat aircraft capabilities. The contract will drive innovation in aerospace engine design and manufacturing. Work is anticipated to occur in Ohio, supporting the regional aerospace industrial base and skilled workforce. Successful development could lead to significant advancements in air power projection and national security.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in CPIF contracts if not closely managed.
- Reliance on a single contractor for critical next-generation technology could pose long-term supply chain risks.
- The highly specialized nature of the technology may limit future competition if intellectual property is concentrated.
Positive Signals
- Award to a leading engine manufacturer with a proven track record in complex aerospace projects.
- Full and open competition process suggests a robust initial selection and potential for broad technological input.
- CPIF structure incentivizes contractor performance and cost efficiency, aligning interests.
- Long contract duration allows for thorough development and de-risking of advanced technologies.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft engine manufacturing and advanced research and development. The market for advanced jet propulsion is dominated by a few major players, including General Electric. This award signifies a significant investment in maintaining technological superiority in air power, a critical component of national defense spending. Comparable spending benchmarks would typically involve other major R&D programs for next-generation military platforms.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Given the specialized and large-scale nature of advanced propulsion system development, prime contracting is typically awarded to large, established aerospace firms. However, General Electric may engage small businesses for specific components or services as part of its supply chain, though this is not detailed in the provided information.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Air Force's contracting and program management offices. The Cost Plus Incentive Fee (CPIF) structure necessitates close monitoring of costs and performance against established targets to ensure value for money. Transparency will depend on the reporting requirements within the contract and the agency's policies regarding the release of R&D information. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.
Related Government Programs
- Advanced Engine Technology Programs
- Air Force Research and Development
- Next Generation Air Dominance (NGAD) Components
- Aerospace Manufacturing Contracts
- Propulsion System Development
Risk Flags
- Cost Overrun Potential
- Technology Maturation Risk
- Sole Source Dependency Risk (Post-Award)
- Long Development Timeline
Tags
defense, department-of-defense, air-force, aircraft-engine-and-engine-parts-manufacturing, research-and-development, prototyping, cost-plus-incentive-fee, full-and-open-competition, delivery-order, ohio, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $408.5 million to GENERAL ELECTRIC COMPANY. NEXT GENERATION ADAPTIVE PROPULSION (NGAP) PROTOTYPING
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 Air Force).
What is the total obligated amount?
The obligated amount is $408.5 million.
What is the period of performance?
Start: 2023-01-26. End: 2028-01-11.
What is General Electric's track record with similar advanced propulsion development contracts for the Department of Defense?
General Electric Company has a long and extensive history of developing and producing advanced jet engines for military and commercial aviation. For the Department of Defense, GE has been a key contractor for numerous engine programs, including those for fighter jets (like the F110 engine for the F-16) and bombers. Their experience spans decades and includes significant R&D efforts in areas such as adaptive cycle engines, which are precursors to next-generation propulsion systems. This deep expertise and established performance record likely played a crucial role in their selection for the NGAP prototyping contract, suggesting a high degree of confidence from the Air Force in GE's ability to deliver on complex technological challenges.
How does the $408.5 million value compare to other advanced propulsion R&D contracts?
The $408.5 million award for the Next Generation Adaptive Propulsion (NGAP) prototyping is a significant figure, reflecting the cutting-edge nature and strategic importance of this technology. While direct comparisons are challenging due to the proprietary and specialized nature of advanced R&D, similar large-scale prototyping efforts for next-generation military platforms (e.g., airframes, avionics, or other core systems) often fall within this multi-hundred-million-dollar range. For instance, previous or concurrent programs focused on developing foundational technologies for future fighter jets or bombers could have similar or even higher total values spread over several years. The NGAP contract's value is consistent with the substantial investment required to mature highly complex and potentially game-changing aerospace technologies.
What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for advanced R&D?
The primary risks associated with a Cost Plus Incentive Fee (CPIF) contract, like the one awarded for NGAP prototyping, revolve around cost control and contractor performance. While CPIF aims to incentivize efficiency by linking contractor profit to achieving specific cost, schedule, or performance targets, there's an inherent risk of cost growth if targets are not met or if unforeseen technical challenges arise. The government bears the risk of paying incurred costs, plus a fee that varies based on performance. For advanced R&D, where technical uncertainties are high, defining achievable targets can be difficult, potentially leading to disputes or suboptimal outcomes. Effective government oversight is critical to manage these risks, ensuring that the incentive structure truly drives desired results without excessive cost escalation.
What is the expected impact of this contract on the future capabilities of the U.S. Air Force?
This contract is expected to have a profound impact on the future capabilities of the U.S. Air Force by advancing the development of next-generation adaptive propulsion systems. These engines are designed to offer significant improvements in performance, such as increased thrust, enhanced fuel efficiency, and potentially variable cycle capabilities that optimize performance across different flight regimes (e.g., subsonic, supersonic, hypersonic). Such advancements are critical for future air dominance, enabling aircraft to fly faster, farther, and with greater maneuverability. This could translate into enhanced combat effectiveness, improved survivability, and the ability to counter emerging threats, ensuring the U.S. maintains a technological edge in air power for decades to come.
How has spending on advanced aerospace R&D by the Department of Defense evolved over the past decade?
Spending on advanced aerospace R&D by the Department of Defense has generally remained a significant priority, though specific allocations can fluctuate based on strategic priorities and budget cycles. Over the past decade, there has been a sustained focus on developing technologies for future combat platforms, including advanced engines, stealth capabilities, and integrated avionics. Programs like the Next Generation Adaptive Propulsion (NGAP) reflect this ongoing investment. While overall defense budgets may vary, R&D funding for critical areas like aerospace propulsion is often protected due to its long-term strategic implications. Trends indicate a shift towards more integrated system development and a focus on technologies that enable multi-domain operations and counter advanced adversary capabilities.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA862622R0012
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 1 NEUMANN WAY, CINCINNATI, OH, 45215
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: $418,370,149
Exercised Options: $418,370,149
Current Obligation: $408,498,267
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA862622D0010
IDV Type: IDC
Timeline
Start Date: 2023-01-26
Current End Date: 2028-01-11
Potential End Date: 2028-01-11 00:00:00
Last Modified: 2025-10-30
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