DoD's $176.7M R&D contract with General Electric for ADVENT Phase I&II shows long-term investment in advanced propulsion
Contract Overview
Contract Amount: $176,666,420 ($176.7M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2007-08-24
End Date: 2016-09-30
Contract Duration: 3,325 days
Daily Burn Rate: $53.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST SHARING
Sector: R&D
Official Description: ADVENT PHASE I&II
Place of Performance
Location: CINCINNATI, HAMILTON County, OHIO, 45215
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $176.7 million to GENERAL ELECTRIC COMPANY for work described as: ADVENT PHASE I&II Key points: 1. Contract awarded for advanced propulsion research, indicating a focus on future defense capabilities. 2. Long contract duration (3325 days) suggests a complex, multi-phase research and development effort. 3. General Electric's extensive experience in aerospace and defense likely contributed to their selection. 4. The contract's cost-sharing structure implies a shared risk and reward model between the government and contractor. 5. Research and Development in Physical, Engineering, and Life Sciences is a critical area for technological advancement. 6. The definitive contract type suggests a clear scope of work and payment terms were established.
Value Assessment
Rating: fair
Benchmarking the value of this R&D contract is challenging due to its specialized nature and long duration. The total award of $176.7 million over nearly nine years averages to approximately $20 million per year. Without specific deliverables or milestones, it's difficult to assess value for money. However, R&D contracts often involve significant upfront investment with uncertain outcomes, making direct comparisons to service or product contracts inappropriate. The cost-sharing arrangement suggests a willingness to invest in potentially groundbreaking technology.
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 had the opportunity to submit proposals. The presence of 3 bidders suggests a competitive landscape for this type of advanced R&D. This level of competition is generally positive for price discovery, although the unique nature of R&D can limit the direct comparability of bids.
Taxpayer Impact: Full and open competition helps ensure that taxpayer funds are used efficiently by encouraging competitive pricing and innovation among potential contractors.
Public Impact
The primary beneficiaries are the Department of Defense, which gains access to advanced propulsion technologies. The contract supports the development of next-generation military aircraft or systems. Geographic impact is primarily within Ohio, where General Electric is headquartered and likely conducted much of the research. Workforce implications include highly skilled engineering and research positions within General Electric and its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to scope creep or evolving requirements, potentially increasing costs.
- The success of R&D is inherently uncertain, meaning the full investment may not yield desired technological advancements.
- Cost-sharing requires careful monitoring to ensure the government's share is justified by progress and outcomes.
Positive Signals
- Award to a major defense contractor like General Electric suggests a high likelihood of technical expertise and capability.
- Full and open competition indicates a robust bidding process, potentially leading to better solutions.
- The cost-sharing model aligns the contractor's incentives with the government's objectives.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This area is crucial for maintaining technological superiority in defense. The market for advanced aerospace propulsion systems is dominated by a few large, established companies like General Electric, Boeing, and Lockheed Martin. Spending in this niche is often project-specific and driven by strategic defense priorities rather than broad market trends.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the specialized nature of advanced propulsion R&D and the prime contractor being General Electric, it is likely that any small business involvement would be through subcontracting opportunities. The extent of small business participation would depend on GE's subcontracting plan and the availability of specialized small businesses in the supply chain.
Oversight & Accountability
Oversight for this contract would likely be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contract compliance and performance. Accountability measures would be tied to the achievement of research milestones and adherence to the cost-sharing agreement. Transparency in R&D contracts can be limited due to the proprietary nature of the research, but reporting requirements would be stipulated in the contract.
Related Government Programs
- Advanced Aircraft Propulsion Systems
- Defense Research and Development Programs
- Aerospace Engineering Contracts
- Department of Defense Technology Modernization
Risk Flags
- Long contract duration
- High R&D investment
- Cost-sharing arrangement
- Technological uncertainty
Tags
defense, department-of-defense, general-electric, research-and-development, advanced-propulsion, definitive-contract, full-and-open-competition, cost-sharing, ohio, aerospace, engine-technology
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $176.7 million to GENERAL ELECTRIC COMPANY. ADVENT PHASE I&II
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 $176.7 million.
What is the period of performance?
Start: 2007-08-24. End: 2016-09-30.
What was the specific technological objective of the ADVENT Phase I&II program?
The ADVENT (Advanced Variable Cycle Engine) program aimed to develop and demonstrate a next-generation adaptive cycle engine technology for future combat aircraft. The primary goal was to significantly improve fuel efficiency, range, and performance across a wide range of flight conditions compared to existing engine technologies. Phase I focused on component development and risk reduction, while Phase II involved integrated system testing and demonstration of key technologies. This research was critical for enhancing the capabilities and operational flexibility of future air platforms.
How does the cost-sharing arrangement work in this contract?
The contract utilized a cost-sharing arrangement, likely a form of 'Cost Sharing Contract' (CSC) or 'Cost Plus Incentive Fee' (CPIF) with cost sharing. In such arrangements, both the government and the contractor share in the project costs, often based on a pre-determined ratio. This structure incentivizes the contractor to control costs, as they bear a portion of any overruns. The specific sharing ratio would be detailed in the contract terms. This approach is common in R&D where outcomes are uncertain, aligning the contractor's financial interests with the government's objective of achieving program goals efficiently.
What is General Electric's track record in advanced aerospace R&D?
General Electric (GE) has a long and distinguished track record in aerospace R&D, particularly in engine technology. As a major global provider of jet engines for commercial and military aircraft, GE has consistently invested in developing innovative propulsion systems. They have been instrumental in numerous advancements, including high-bypass turbofans, adaptive cycle engines, and hybrid-electric propulsion concepts. Their extensive experience and established research infrastructure position them as a leading entity capable of undertaking complex, long-term R&D projects like the ADVENT program.
How does this contract compare to other R&D spending in advanced propulsion?
Comparing this $176.7 million contract requires context. Advanced propulsion R&D is a high-cost, high-risk endeavor. Major defense programs often involve multi-billion dollar investments over many years. This $176.7 million award, spread over approximately nine years, represents a significant but focused investment in a specific next-generation engine technology. It is comparable to other major R&D initiatives by the DoD aimed at developing breakthrough capabilities, such as next-generation fighter engine programs or advanced materials research. The cost-sharing aspect also differentiates it from purely government-funded research.
What are the potential risks associated with this long-term R&D contract?
The primary risks associated with this long-term R&D contract include technological uncertainty, where the desired advancements may not be achieved within the projected timeline or budget. There's also the risk of evolving requirements; as technology progresses, the initial objectives might become outdated or require significant modification, leading to scope creep and cost increases. Furthermore, the cost-sharing mechanism introduces financial risk for the contractor, which could impact their commitment if significant cost overruns occur. Programmatic risks also include potential shifts in defense priorities or budget allocations that could affect continued funding.
What is the significance of the 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code?
The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' signifies that the contract's primary purpose is scientific inquiry and experimentation aimed at discovering or improving knowledge and understanding in these fields. This code covers a broad spectrum of R&D activities, including fundamental research, applied research, and experimental development. For this contract, it specifically points to engineering-focused R&D related to physical sciences, such as advanced materials, thermodynamics, and mechanical engineering principles applied to propulsion systems.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 3
Pricing Type: COST SHARING (T)
Evaluated Preference: NONE
Contractor Details
Address: 1 NEUMANN WAY, CINCINNATI, OH, 45215
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $300,835,920
Exercised Options: $300,835,920
Current Obligation: $176,666,420
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2007-08-24
Current End Date: 2016-09-30
Potential End Date: 2016-09-30 00:00:00
Last Modified: 2020-09-01
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