Navy awards $2.35B contract for aircraft engines and spares to General Electric Company
Contract Overview
Contract Amount: $2,351,495,624 ($2.4B)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2006-04-24
End Date: 2014-12-31
Contract Duration: 3,173 days
Daily Burn Rate: $741.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200607!387702!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0088 !A!N! !N! ! !20060424!20090131!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY !1000 WESTERN AVE !LYNN !MA!01905!37490!009!25!LYNN !ESSEX !MASS !+000018238000!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !000 !NOT DISCERNABLE !336412!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!Y! ! ! !Y!1719!N00019!0001! !
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01910
Plain-Language Summary
Department of Defense obligated $2.35 billion to GENERAL ELECTRIC COMPANY for work described as: 200607!387702!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0088 !A!N! !N! ! !20060424!20090131!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY !1000 WESTERN AVE !LYNN !MA!01905!37490!009!25!LYNN !ESSE… Key points: 1. Contract awarded for aircraft engines and spares, indicating a need for critical aviation components. 2. The contract's duration spans over 8 years, suggesting a long-term requirement for these parts. 3. The award was not competed, raising questions about potential cost savings and market competitiveness. 4. General Electric Company, a large established firm, is the sole awardee, highlighting industry concentration. 5. The contract value is substantial, representing a significant investment in naval aviation readiness. 6. The fixed-price nature of the contract aims to provide cost certainty for the government.
Value Assessment
Rating: fair
The total value of $2.35 billion over an 8-year period is substantial. Without specific details on the exact quantities and types of engines and spares procured, a direct per-unit cost comparison is difficult. However, the contract's duration and the sole-source nature suggest that the government may not have achieved the best possible pricing through competitive bidding. Benchmarking against similar sole-source awards for complex aerospace components would be necessary for a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one responsible source can provide the required goods or services. The lack of competition means that the government did not benefit from multiple bids, which could have driven down prices and spurred innovation. The specific justification for the sole-source award would need to be examined to understand why other potential suppliers were not considered.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This lack of competition limits the government's ability to leverage market forces for cost savings.
Public Impact
The U.S. Navy benefits directly through the acquisition of essential aircraft engines and spare parts, ensuring the operational readiness of its fleet. This contract supports the maintenance and sustainment of naval aviation assets, crucial for national defense and power projection. The geographic impact is primarily centered around the contractor's facilities in Massachusetts, where production and fulfillment will occur. The contract has implications for the aerospace manufacturing workforce, particularly at General Electric's facilities, supporting skilled jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may result in higher prices than could be achieved through a competitive process.
- Sole-source awards can limit opportunities for other qualified businesses to enter or expand their market share.
- Long contract duration without clear performance metrics could pose risks if requirements change or performance degrades.
Positive Signals
- Award to a single, established contractor like General Electric suggests a high degree of confidence in their capability to deliver.
- The firm fixed-price contract type provides cost certainty for the government, mitigating budget overruns related to price fluctuations.
- The contract supports critical national defense needs, ensuring the availability of essential military hardware.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft engines and related parts. This is a highly specialized and capital-intensive industry dominated by a few major players. The market for military aircraft engines is characterized by long development cycles, stringent performance requirements, and significant government investment. General Electric is a key incumbent in this market, holding substantial contracts for various military platforms. The contract value is significant, reflecting the complexity and cost associated with advanced aerospace propulsion systems.
Small Business Impact
This contract does not appear to have a small business set-aside component, as it was awarded to General Electric Company, a large prime contractor. There is no explicit information regarding subcontracting plans for small businesses within this award. The lack of a set-aside or clear subcontracting goals could limit opportunities for small businesses in the aerospace supply chain related to this specific procurement.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy and the Naval Air Systems Command. As a firm fixed-price contract, financial oversight would focus on ensuring delivery according to specifications and schedule. The Department of Defense's Inspector General may conduct audits or investigations into contract performance, cost, or compliance. Transparency is facilitated through contract databases, but detailed performance metrics and justifications for sole-source awards are not always publicly accessible.
Related Government Programs
- Naval Aviation Readiness Programs
- Aircraft Engine Procurement
- Defense Logistics and Sustainment
- Aerospace Manufacturing Contracts
- Military Aircraft Spares and Components
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Long contract duration may not adapt to evolving technological needs.
- Lack of detailed performance metrics in summary data.
- Potential for contractor lock-in due to specialized nature of engines.
Tags
defense, department-of-defense, department-of-the-navy, naval-air-systems-command, aircraft-engines, spare-parts, sole-source, firm-fixed-price, large-contract, aerospace, massachusetts, general-electric-company
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $2.35 billion to GENERAL ELECTRIC COMPANY. 200607!387702!1700!N00019!NAVAL AIR SYSTEMS COMMAND !N0001906C0088 !A!N! !N! ! !20060424!20090131!001408509!001408509!001367960!N!GENERAL ELECTRIC COMPANY !1000 WESTERN AVE !LYNN !MA!01905!37490!009!25!LYNN !ESSEX !MASS !+000018238000!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !000 !NOT DISCERNABLE !336412!E! !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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $2.35 billion.
What is the period of performance?
Start: 2006-04-24. End: 2014-12-31.
What specific types and quantities of aircraft engines and spares are covered under this contract?
The provided data indicates the contract is for 'GAS TURBINES AND JET ENGINES, ACFT & COMPS' and 'AIRCRAFT ENGINES AND SPARES'. However, the specific models, quantities, and detailed breakdown of spare parts are not discernible from the abbreviated data. This level of detail is typically found in the contract's statement of work or line item details, which are not included here. Understanding these specifics is crucial for a thorough analysis of value and performance.
What was the justification for awarding this contract on a sole-source basis?
The data explicitly states the contract type as 'NOT COMPETED' and the competition status as 'SOLE SOURCE'. While the data confirms it was sole-source, it does not provide the specific justification. Typically, sole-source justifications are based on factors such as unique technical capabilities, proprietary technology, urgent and compelling needs where only one source can meet the requirement, or the existence of only one responsible source. A formal justification document (e.g., a Justification and Approval - J&A) would normally be required and may be available through other government contracting portals.
How does the contract's total value compare to similar procurements for aircraft engines and spares?
Comparing the $2.35 billion contract value requires context on the specific engine models, quantities, and the period of performance. General Electric is a major supplier of jet engines for various military aircraft. Without knowing the exact nature of the engines and spares procured (e.g., for F/A-18, F-35, P-8 Poseidon), direct comparison is challenging. However, large sole-source awards for complex military systems often represent significant investments. Benchmarking would involve looking at other sole-source or competitively awarded contracts for similar engine classes and quantities over comparable timeframes.
What are the key performance expectations and metrics for this contract?
The provided data indicates the contract is 'FIRM FIXED PRICE' (pt: F). This contract type generally implies that the contractor is responsible for delivering the specified goods or services at a fixed price, regardless of their actual costs. While the data doesn't detail specific performance metrics (e.g., delivery schedules, reliability rates, maintenance support levels), the firm fixed-price nature suggests a strong emphasis on meeting delivery commitments. Performance would be monitored by the Naval Air Systems Command, with potential penalties or remedies for non-compliance outlined in the contract's terms and conditions.
What is General Electric Company's track record with similar sole-source defense contracts?
General Electric Company (GE) has a long and extensive history of supplying aircraft engines and related services to the U.S. military, often through sole-source or limited-competition contracts due to the specialized nature of their products and long-standing relationships. GE is a primary provider for numerous platforms across the Air Force, Navy, and other branches. Their track record typically involves large, complex contracts for engine development, production, and sustainment. While specific details of past sole-source awards are not in this dataset, GE's position as a major defense contractor suggests a pattern of securing such contracts based on technological expertise and existing platform integration.
What is the historical spending trend for aircraft engines and spares by the Department of the Navy?
The provided data point represents a single contract award from 2006. To analyze historical spending trends for aircraft engines and spares by the Department of the Navy, a broader dataset encompassing multiple years and contract awards would be necessary. This would involve aggregating spending across various contracts, contractors, and fiscal years. Such an analysis would reveal patterns in demand, fluctuations in spending based on defense budgets and operational needs, and the prevalence of sole-source versus competitive procurements over time.
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, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2006-04-24
Current End Date: 2014-12-31
Potential End Date: 2014-12-31 00:00:00
Last Modified: 2014-10-03
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