DoD Awards $182.9M for F/A-18 E/F Aircraft Engine Repair to General Electric
Contract Overview
Contract Amount: $182,919,026 ($182.9M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2003-12-18
End Date: 2030-04-06
Contract Duration: 9,606 days
Daily Burn Rate: $19.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200412!000024!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001903C0361 !A!N! !N! ! !20031218!20041130!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY !1000 WESTERN AVENUE !LYNN !MA!01905!37490!009!25!LYNN !ESSEX !MASS !+000034562060!N!N!000034562060!J016!MAINT & REPAIR OF EQ/AIRCRAFT COMPS & ACCYS !A1B!AIRCRAFT ENGINES AND SPARES !549 !F/A-18 E/F !336413!A!A!3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y! !N00019!0001! !
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $182.9 million to GENERAL ELECTRIC COMPANY for work described as: 200412!000024!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001903C0361 !A!N! !N! ! !20031218!20041130!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY !1000 WESTERN AVENUE !LYNN !MA!01905!37490!009!25!LYNN !ESSE… Key points: 1. Significant contract for critical aircraft components, highlighting reliance on established suppliers. 2. General Electric, a major defense contractor, faces minimal direct competition for this specific repair work. 3. Risk of price escalation due to sole-source nature and long contract duration. 4. Spending concentrated in the Defense sector, specifically aircraft parts and maintenance.
Value Assessment
Rating: fair
The contract value of $182.9 million over its duration appears substantial. Benchmarking against similar repair contracts for complex aircraft components is difficult without more granular data on the specific services and parts included.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for the government compared to a competitive procurement.
Taxpayer Impact: The absence of competition raises concerns about potential overspending, impacting taxpayer funds allocated for defense readiness.
Public Impact
Ensures continued operational readiness of the F/A-18 E/F fleet by maintaining critical engine components. Supports a key defense contractor, potentially impacting jobs and the supply chain within the aerospace industry. Long-term nature of the contract provides stability for both the contractor and the military's maintenance planning.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Long contract duration (over 9 years) increases risk of cost overruns.
- Potential for contractor to leverage unique position for price increases.
Positive Signals
- Ensures availability of critical repair services for essential military aircraft.
- Provides stability and predictability for fleet maintenance.
- Leverages established expertise of a known contractor.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on the maintenance and repair of aircraft components. Spending in this area is crucial for maintaining military readiness, but sole-source awards can inflate costs compared to industry benchmarks for similar services.
Small Business Impact
This contract does not appear to involve small businesses as prime contractors. The nature of specialized aircraft engine repair often favors large, established companies with specific certifications and capabilities.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential abuses. Regular performance reviews and cost audits would be advisable.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Long contract duration
- Potential for price escalation
- Lack of small business participation
- High contract value
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ma, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $182.9 million to GENERAL ELECTRIC COMPANY. 200412!000024!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001903C0361 !A!N! !N! ! !20031218!20041130!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY !1000 WESTERN AVENUE !LYNN !MA!01905!37490!009!25!LYNN !ESSEX !MASS !+000034562060!N!N!000034562060!J016!MAINT & REPAIR OF EQ/AIRCRAFT COMPS & ACCYS !A1B!AIRCRAFT ENGINES AND SPARES !549 !F/A-18 E/F !336413!A!A!3! ! ! ! ! !999
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 $182.9 million.
What is the period of performance?
Start: 2003-12-18. End: 2030-04-06.
What is the justification for the sole-source award, and has a market research report been conducted to confirm the lack of viable alternatives?
The justification for a sole-source award typically stems from a lack of adequate competition, unique capabilities held by a single source, or urgent and compelling needs. A thorough market research report should have been conducted by the Naval Air Systems Command to validate that no other responsible sources could meet the government's requirements. This report is crucial for demonstrating that the sole-source decision was indeed necessary and in the government's best interest.
How will the government ensure cost-effectiveness and prevent price creep over the nearly 10-year duration of this contract?
To ensure cost-effectiveness, the government should implement robust contract surveillance, including regular performance reviews and audits of the contractor's costs. Utilizing price adjustment clauses that are tied to objective market indicators or established cost indices can help mitigate price creep. Furthermore, maintaining open communication channels with the contractor and exploring opportunities for efficiency improvements collaboratively can contribute to managing costs over the long term.
What is the government's plan to foster competition for future aircraft engine repair needs, potentially through breaking down the requirement or encouraging new entrants?
The government can foster future competition by conducting market research to identify potential new entrants or existing firms that could develop the necessary capabilities. Requirements could be structured to allow for phased competition or to procure specific components or services separately. Encouraging industry days, providing clear technical requirements, and offering developmental contracts can help lower barriers to entry for smaller or less established firms interested in this specialized market.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1000 WESTERN AVENUE, LYNN, MA, 06
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $182,919,026
Exercised Options: $182,919,026
Current Obligation: $182,919,026
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2003-12-18
Current End Date: 2030-04-06
Potential End Date: 2030-04-06 00:00:00
Last Modified: 2012-07-13
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