NASA's $72.5M Aerospace Engine Research Contract with GE Faces Scrutiny Over Long-Term Value and Competition

Contract Overview

Contract Amount: $72,556,133 ($72.6M)

Contractor: General Electric Company Inc

Awarding Agency: National Aeronautics and Space Administration

Start Date: 2001-09-15

End Date: 2013-03-01

Contract Duration: 4,185 days

Daily Burn Rate: $17.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: COST PLUS INCENTIVE

Sector: R&D

Official Description: REVOLUTIONARY AEROSPACE ENGINE RESEARCH. THE OBJECTIVE OF THIS TASK ORDER CONTRACT IS TO DEVELOP, DEMONSTRATE AND VERIFY ADVANCED PROPULSION SYSTEM TECHNOLOGIES AS PART OF NASA'S ON-GOING, LONG-TERM AEROSPACE RESEARCH PROGRAM ADDRESSING A WIDE VARIETY OF PROPULSION ISSUES. APPLICATIONS INCLUDE AIRBREATHING ENGINE TECHNOLOGY, PULSE DETONATION ENGINE TECHNOLOGY, PROPULSION/AIRFRAME INTEGRATION, COMBINED CYCLE PROPULSION SYSTEMS, DESIGN TOOL DEVELOPMENT AND REUSABLE LAUNCH VEHICLE (RLV) CROSS-CUTTING TECHNOLOGIES. THE CONTRACT SHALL FURNISH ALL PERSONNEL, FACILITIES, EQUIPMENT, MATERIAL, SUPPLIES AND SERVICES EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THE CONTRACT AGREEMENT AS GOVERNMENT FURNISHED PROPERTY, AND OTHERWISE DO ALL THINGS NECESSARY TO, OR INCIDENT TO, PERFORMING AND PROVIDING THE WORK EFFORTS SET FORTH IN THE FOLLOWING DISCIPLINE AREAS. CONTRACT SCOPE INCLUDES ANALYTICAL AND EXPERIMENTAL INVESTIGATIONS COVERING A WIDE VARIETY OF PROPULSION AND POWER SYSTEMS, COMPONENTS, AND SUB-COMPONENTS HAVING EITHER COMMERCIAL OR MILITARY AEROSPACE APPLICATION. WORK WILL BE ACCOMPLISHED IN RESPONSE TO A SERIES OF COMPLETION TASKS TO BE ISSUED IN THE FOLLOWING TECHNOLOGY DISCIPLINES BY THE GOVERNMENT DURING THE PERIOD OF PERFORMANCE. DISCIPLINE 1: AIRBREATHING ENGINE TECHNOLOGY. DISCIPLINE 2: PULSE DETONATION ENGINE (PDE) TECHNOLOGY. DISCIPLINE 3: TURBINE-BASED COOMBINED CYCLE (TBCC) PROPULSION SYSTEMS. DISCIPLINE 4: DESIGN TOOLS.

Place of Performance

Location: CINCINNATI, HAMILTON County, OHIO, 45215

State: Ohio Government Spending

Plain-Language Summary

National Aeronautics and Space Administration obligated $72.6 million to GENERAL ELECTRIC COMPANY INC for work described as: REVOLUTIONARY AEROSPACE ENGINE RESEARCH. THE OBJECTIVE OF THIS TASK ORDER CONTRACT IS TO DEVELOP, DEMONSTRATE AND VERIFY ADVANCED PROPULSION SYSTEM TECHNOLOGIES AS PART OF NASA'S ON-GOING, LONG-TERM AEROSPACE RESEARCH PROGRAM ADDRESSING A WIDE VARIETY OF PROPULSION ISSUES. APPL… Key points: 1. Significant investment in advanced propulsion technologies for long-term aerospace goals. 2. Sole awardee, General Electric, raises questions about competitive pricing and innovation. 3. Contract duration and cost-plus structure may present risks for budget control. 4. Focus on R&D aligns with national strategic interests in space exploration and defense.

Value Assessment

Rating: questionable

The contract's cost-plus incentive structure, awarded solely to General Electric, makes a direct pricing assessment difficult without comparable contracts. The long duration and broad scope suggest potential for cost overruns and a lack of competitive pressure to optimize spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

While advertised as full and open competition, the award to a single entity, General Electric, suggests potential barriers to entry or a lack of sufficient bidders. This limited competition may have impacted price discovery and potentially led to higher costs.

Taxpayer Impact: The long-term nature and cost-plus incentive fee structure of this contract raise concerns about maximizing taxpayer value. Without robust competition, there's a risk that funds may not be utilized as efficiently as possible.

Public Impact

Advancement of critical aerospace technologies with potential dual-use applications. Long-term commitment to research may yield significant breakthroughs in propulsion. Potential for job creation and economic impact within the aerospace sector. NASA's reliance on a single contractor for such a critical research area warrants oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole awardee for a large R&D contract
Cost-plus incentive fee structure
Long contract duration
Lack of clear performance metrics for innovation

Positive Signals

Addresses critical national aerospace research needs
Potential for significant technological advancements
Established contractor with relevant expertise

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced physical and engineering sciences related to aerospace propulsion. Benchmarks for R&D contracts can vary widely, but the significant duration and funding suggest a substantial, long-term commitment to innovation.

Small Business Impact

The data indicates no specific provisions or set-asides for small businesses in this contract. Large-scale, specialized research and development contracts like this often involve prime contractors who may subcontract, but direct small business participation is not evident here.

Oversight & Accountability

The long duration and sole-source nature of this contract necessitate robust oversight from NASA to ensure progress, manage costs, and verify the achievement of research objectives. Regular performance reviews and milestone tracking are crucial for accountability.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences
National Aeronautics and Space Administration Contracting
National Aeronautics and Space Administration Programs

Risk Flags

Potential for cost overruns due to cost-plus structure and long duration.
Limited competition may lead to suboptimal pricing and reduced innovation.
Lack of transparency regarding specific technological deliverables and their value.
Contractor lock-in due to specialized nature of research.
Over-reliance on a single contractor for critical R&D.

Frequently Asked Questions

What is this federal contract paying for?

National Aeronautics and Space Administration awarded $72.6 million to GENERAL ELECTRIC COMPANY INC. REVOLUTIONARY AEROSPACE ENGINE RESEARCH. THE OBJECTIVE OF THIS TASK ORDER CONTRACT IS TO DEVELOP, DEMONSTRATE AND VERIFY ADVANCED PROPULSION SYSTEM TECHNOLOGIES AS PART OF NASA'S ON-GOING, LONG-TERM AEROSPACE RESEARCH PROGRAM ADDRESSING A WIDE VARIETY OF PROPULSION ISSUES. APPLICATIONS INCLUDE AIRBREATHING ENGINE TECHNOLOGY, PULSE DETONATION ENGINE TECHNOLOGY, PROPULSION/AIRFRAME INTEGRATION, COMBINED CYCLE PROPULSION SYSTEMS, DESIGN TOOL DEVELOPMENT AND REUSABLE LAUNCH VEHICLE (RLV) CROSS-CUT

Who is the contractor on this award?

The obligated recipient is GENERAL ELECTRIC COMPANY INC.

Which agency awarded this contract?

Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).

What is the total obligated amount?

The obligated amount is $72.6 million.

What is the period of performance?

Start: 2001-09-15. End: 2013-03-01.

What specific technological advancements have been achieved through this contract, and do they justify the significant investment and long duration?

Assessing the tangible technological advancements requires a detailed review of NASA's project reports and milestones. Given the contract's focus on fundamental research and development, immediate, quantifiable outcomes may be less apparent than long-term potential. A thorough analysis would compare the achieved innovations against the initial objectives and the overall cost.

How did NASA ensure fair and reasonable pricing when awarding this contract to a single entity, and were alternative competitive strategies considered?

NASA's justification for a sole award, even under a 'full and open' umbrella, needs scrutiny. Factors like unique capabilities, prior research investments, or market dynamics might have influenced the decision. However, the absence of broader competition raises questions about whether alternative approaches, such as phased competitions or broader solicitations, were adequately explored to ensure optimal pricing.

What are the long-term implications of this contract's structure on NASA's ability to adapt to evolving aerospace technologies and maintain cost control?

The extended duration and cost-plus incentive fee structure present inherent risks for long-term adaptability and cost control. While intended to foster innovation, such contracts can become rigid, making it difficult to pivot to new technologies. Furthermore, the incentive fee, while aiming for efficiency, can still lead to costs exceeding initial projections if not meticulously managed and overseen.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 11

Pricing Type: COST PLUS INCENTIVE (V)

Contractor Details

Address: 111 MERCHANT ST, CINCINNATI, OH, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $135,903,365

Exercised Options: $135,903,365

Current Obligation: $72,556,133

Timeline