DoD Awards $1.22 Billion for F414-GE-400 Engines to General Electric, No Competition
Contract Overview
Contract Amount: $1,220,993,145 ($1.2B)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2011-04-20
End Date: 2031-12-14
Contract Duration: 7,543 days
Daily Burn Rate: $161.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: F414-GE-400 ENGINES
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $1.22 billion to GENERAL ELECTRIC COMPANY for work described as: F414-GE-400 ENGINES Key points: 1. Significant investment in critical aircraft engine components. 2. Sole reliance on General Electric for this specific engine. 3. Potential for cost overruns due to lack of competition. 4. Manufacturing sector heavily reliant on major defense contractors.
Value Assessment
Rating: questionable
The total award of $1.22 billion for F414-GE-400 engines raises concerns about value for money given the lack of competition. Benchmarking against similar engine contracts or previous sole-source awards would be necessary to assess if the pricing is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, General Electric, was considered. This significantly limits price discovery and negotiation leverage for the government, potentially leading to higher costs than if competition were present.
Taxpayer Impact: Taxpayers may be paying a premium for these engines due to the absence of competitive bidding, impacting the overall efficiency of defense spending.
Public Impact
Ensures continued supply of essential engines for military aircraft. Supports jobs within General Electric and its supply chain. Potential for increased defense budget allocation to cover engine costs. Lack of competition could stifle innovation in engine technology.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Long contract duration
Positive Signals
- Critical defense component
- Established manufacturer
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically for aircraft engines. Spending in this area is often characterized by high R&D costs, long production cycles, and significant government oversight due to national security implications.
Small Business Impact
This contract does not appear to directly benefit small businesses, as it is a sole-source award to a large prime contractor, General Electric. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this award notice.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Given the sole-source nature and high value, robust oversight is crucial to ensure performance, quality, and fair pricing.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- High contract value increases financial risk.
- Long contract duration (over 10 years) poses risks of changing requirements or technology.
- Dependence on a single supplier can create supply chain vulnerabilities.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.22 billion to GENERAL ELECTRIC COMPANY. F414-GE-400 ENGINES
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 $1.22 billion.
What is the period of performance?
Start: 2011-04-20. End: 2031-12-14.
What is the historical cost performance of the F414-GE-400 engine under previous contracts, and how does the current pricing compare?
Analyzing historical cost data for the F414-GE-400 engine is crucial for assessing the value of this $1.22 billion sole-source award. Without comparative data on previous contract pricing, cost overruns, or performance against budget, it's difficult to determine if the current price reflects fair market value or if taxpayers are incurring a premium due to the lack of competition.
What steps has the Department of Defense taken to mitigate the risks associated with a sole-source procurement for such a critical component?
The Department of Defense should have conducted thorough market research to justify the sole-source determination and explored all viable alternatives. Mitigation strategies might include negotiating stringent performance metrics, implementing robust oversight mechanisms, and establishing clear milestones for potential future competition or alternative sourcing strategies to ensure long-term cost-effectiveness and technological advancement.
How does the long-term sustainment and maintenance plan for these engines factor into the overall cost-effectiveness of this award?
The $1.22 billion award covers the initial procurement of engines, but the long-term sustainment and maintenance costs are critical for assessing overall value. Without a clear understanding of these future expenses, including spare parts, repairs, and technical support, the true cost-effectiveness of this contract remains uncertain. Effective planning for sustainment is vital to avoid escalating lifecycle costs.
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
Solicitation ID: N0001910R0082
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1000 WESTERN AVE, LYNN, MA, 01905
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,371,767,870
Exercised Options: $1,221,214,742
Current Obligation: $1,220,993,145
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $35,046
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-04-20
Current End Date: 2031-12-14
Potential End Date: 2031-12-14 00:00:00
Last Modified: 2019-11-19
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