DoD Awards $570.6M for T408 Engine Long Lead Items to General Electric
Contract Overview
Contract Amount: $570,653,604 ($570.7M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2023-12-18
End Date: 2032-09-14
Contract Duration: 3,193 days
Daily Burn Rate: $178.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T408 LOT 9 LONG LEAD ITEMS
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $570.7 million to GENERAL ELECTRIC COMPANY for work described as: T408 LOT 9 LONG LEAD ITEMS Key points: 1. Significant investment in critical aircraft engine components. 2. Sole-source award to General Electric raises questions about competition. 3. Long contract duration (over 8 years) warrants close monitoring. 4. Focus on a single sector (Aircraft Engine Manufacturing) for this award.
Value Assessment
Rating: questionable
The contract value of $570.6 million for long lead items is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to potential alternatives or previous GE pricing for similar components.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Electric. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for this large contract could lead to suboptimal pricing, potentially increasing the financial burden on taxpayers for essential defense equipment.
Public Impact
Ensures continued availability of critical engine parts for naval aircraft. Supports a major defense contractor and its supply chain. Potential for cost overruns due to sole-source nature. Impacts readiness of naval aviation assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of price competition
Positive Signals
- Ensures supply of critical components
- Supports established technology
Sector Analysis
This award falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the defense industrial base. Spending benchmarks for such specialized, long-lead procurements are often high due to R&D and manufacturing complexity.
Small Business Impact
The contract was awarded directly to General Electric, a large corporation. There is no indication of subcontracting opportunities for small businesses within this specific award notice, though GE may engage them independently.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of the Navy to ensure cost control and performance. Regular reviews of GE's pricing and delivery schedules will be crucial.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits price competition.
- Long contract duration increases risk of cost escalation.
- Potential for contractor performance issues over an extended period.
- Lack of transparency in pricing without competitive bids.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $570.7 million to GENERAL ELECTRIC COMPANY. T408 LOT 9 LONG LEAD ITEMS
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 $570.7 million.
What is the period of performance?
Start: 2023-12-18. End: 2032-09-14.
What is the justification for the sole-source award, and has a market research report been conducted to confirm the absence of viable alternatives?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. A thorough market research report should have been conducted by the Department of the Navy to validate that no other responsible sources could meet the specified requirements, thereby justifying the exclusion of competition and ensuring the best value for the government.
How will the Department of the Navy ensure cost reasonableness and prevent potential price creep over the 8-year contract duration, given the lack of competition?
The Department of the Navy can employ several strategies to manage costs. This includes negotiating firm fixed prices with clear escalation clauses, establishing performance metrics tied to payment schedules, conducting regular audits of contractor costs, and potentially incorporating options for competitive re-competition if market conditions change or if GE's performance falters significantly.
What are the specific long-lead items being procured, and what is their criticality to the operational readiness of the T408 engine and the aircraft it powers?
Long-lead items are components that require significant manufacturing time, often exceeding the production lead time of the end-product. For the T408 engine, these could include specialized turbine blades, complex gearboxes, or unique control systems. Their criticality lies in ensuring a continuous supply chain for engine production and maintenance, directly impacting the operational readiness and availability of naval aircraft reliant on these engines.
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: N0001923R0106
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,494,688,740
Exercised Options: $1,494,688,740
Current Obligation: $570,653,604
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-12-18
Current End Date: 2032-09-14
Potential End Date: 2032-09-14 00:00:00
Last Modified: 2026-01-08
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