Naval Air Systems Command awards $153.7M contract to General Electric for aircraft engines
Contract Overview
Contract Amount: $1,536,839,701 ($1.5B)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2002-05-08
End Date: 2008-01-31
Contract Duration: 2,094 days
Daily Burn Rate: $733.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200210!004379!1700!AA427 !NAVAL AIR SYSTEMS COMMAND !N0001901C0147 !A!N! !N!P00001 !20020508!20031130!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESSEX !MASS !+000060619860!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !2BJN!F414-GE-400 !336412!E! !1! ! !C! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!A!W!F! ! !N!C!N! ! ! !A!A!A!A!000!A!B!Y! ! ! ! ! ! !0001!
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $1.54 billion to GENERAL ELECTRIC COMPANY for work described as: 200210!004379!1700!AA427 !NAVAL AIR SYSTEMS COMMAND !N0001901C0147 !A!N! !N!P00001 !20020508!20031130!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESSEX… Key points: 1. The contract is for aircraft engines and spares, a critical component for naval aviation. 2. General Electric is a dominant player in the aircraft engine market, indicating limited competition. 3. The contract's fixed-price nature aims to control costs, but oversight is needed for potential overruns. 4. This spending falls within the Defense sector, specifically aircraft manufacturing and maintenance.
Value Assessment
Rating: good
The contract value of $153.7M for aircraft engines and spares appears reasonable given the nature of the product and the sole-source award. Benchmarking against similar large-scale engine procurements would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, likely due to the specialized nature of the F414-GE-400 engine. This limits price discovery and competition, potentially leading to higher costs than a competitive bid.
Taxpayer Impact: Taxpayer funds are utilized for this procurement. While essential for defense, the lack of competition warrants scrutiny to ensure fair pricing.
Public Impact
Ensures continued operational readiness of naval aircraft by providing essential engine components. Supports a major defense contractor, potentially impacting jobs and the broader aerospace supply chain. Highlights the reliance on specific manufacturers for critical defense systems, raising questions about long-term strategic sourcing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Potential for cost overruns on specialized defense contracts.
- Long-term reliance on a single supplier for critical components.
Positive Signals
- Addresses a critical need for naval aviation readiness.
- Firm fixed-price contract aims to control costs.
- Supports a key defense industrial base supplier.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on aircraft engines. Spending in this area is critical for national security and often involves high-value, specialized procurements with limited competition.
Small Business Impact
This contract was awarded to a large prime contractor, General Electric. There is no indication of subcontracting opportunities for small businesses within the provided data, which is common for large, specialized defense procurements.
Oversight & Accountability
The contract was awarded by the Naval Air Systems Command, a component of the Department of Defense. Oversight would typically involve contract administration by the Defense Contract Management Agency to ensure compliance and performance.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Potential for price escalation
- Long-term supplier dependency
- Lack of transparency in pricing due to sole-source nature
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, dca, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.54 billion to GENERAL ELECTRIC COMPANY. 200210!004379!1700!AA427 !NAVAL AIR SYSTEMS COMMAND !N0001901C0147 !A!N! !N!P00001 !20020508!20031130!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESSEX !MASS !+000060619860!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !2BJN!F414-GE-400 !336412!E! !1! ! !C! ! !99990909!B
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 $1.54 billion.
What is the period of performance?
Start: 2002-05-08. End: 2008-01-31.
What is the justification for the sole-source award, and have alternatives been thoroughly explored?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For specialized defense systems like advanced aircraft engines, this is often due to proprietary technology, unique manufacturing capabilities, or existing system integration. Thorough exploration of alternatives would involve market research to confirm the absence of other capable sources and a review of potential risks associated with non-competitive awards.
How does the unit cost of these engines compare to similar procurements or industry benchmarks?
Benchmarking the unit cost requires access to detailed pricing data for comparable aircraft engines, considering factors like engine model, quantity, and contract terms. Without specific unit cost data or access to proprietary pricing information, a precise comparison is difficult. However, the overall contract value and duration can provide a rough estimate, which should be evaluated against historical data for similar defense procurements.
What are the long-term implications of relying on General Electric for this critical engine component?
Long-term reliance on a single supplier can create strategic vulnerabilities, including potential supply chain disruptions, price increases, and reduced innovation due to lack of competition. It also concentrates critical capabilities within one entity. While GE is a reputable supplier, the government may explore strategies to foster competition or develop alternative sources for future procurements to mitigate these risks.
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
Contract Characteristics
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2002-05-08
Current End Date: 2008-01-31
Potential End Date: 2008-01-31 00:00:00
Last Modified: 2014-09-09
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