Naval Air Systems Command awarded $214M contract to General Electric for F414-GE-400 aircraft engines and spares
Contract Overview
Contract Amount: $948,194,045 ($948.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 1999-06-22
End Date: 2011-08-01
Contract Duration: 4,423 days
Daily Burn Rate: $214.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 199910!1700!1047!AA427!NAVAL AIR SYSTEMS COMMAND !N0001999C1175 !A!*!* !19990622!20000531!001408509!001367960!001367960!N!99207!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESSEX !MASS !0001!+000022000000!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !2BJN!F414-GE-400 !3724!1!*!*!*!B!A!*!D !N!J!1!001!N!1A!A!N!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01901
Plain-Language Summary
Department of Defense obligated $948.2 million to GENERAL ELECTRIC COMPANY for work described as: 199910!1700!1047!AA427!NAVAL AIR SYSTEMS COMMAND !N0001999C1175 !A!*!* !19990622!20000531!001408509!001367960!001367960!N!99207!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESSEX … Key points: 1. Contract awarded for critical aircraft engine components, indicating a need for sustained operational capability. 2. Sole-source award suggests potential lack of market competition or unique contractor capabilities. 3. Long contract duration of over 12 years implies a long-term strategic need for these engines. 4. Firm Fixed Price contract type shifts cost risk to the contractor, potentially stabilizing prices. 5. The award falls under the 'Aircraft Engines and Spares' category, a vital segment of defense aviation. 6. Significant contract value highlights the importance and cost associated with advanced aerospace propulsion systems.
Value Assessment
Rating: fair
The contract value of $214,378,000 for aircraft engines and spares appears substantial. Benchmarking against similar sole-source awards for advanced engine components is challenging due to the specialized nature of the F414-GE-400 engine. However, the long duration and the firm fixed-price nature suggest an attempt to manage costs over the lifecycle. Without more comparable data points or details on the scope of services and parts included, a definitive value-for-money assessment is difficult, but the price seems aligned with high-performance aerospace equipment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the sole provider of a critical component. The lack of competition means that price discovery through a bidding process was bypassed, which can sometimes lead to higher costs for the government compared to a fully competed contract.
Taxpayer Impact: For taxpayers, a sole-source award means that the government did not leverage competitive pressures to potentially lower the price. This necessitates a strong reliance on internal cost analysis and negotiation to ensure fair pricing.
Public Impact
The primary beneficiaries are the U.S. Navy and potentially other branches utilizing the F414-GE-400 engine, ensuring their aircraft remain operational. Services delivered include the provision of aircraft engines and spare parts, crucial for maintaining fleet readiness. The geographic impact is primarily within the defense sector, supporting naval aviation operations globally. Workforce implications include supporting jobs at General Electric and its supply chain, particularly in advanced manufacturing and aerospace engineering.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially impacting price efficiency.
- Long contract duration increases exposure to potential cost overruns or scope creep if not managed tightly.
- Reliance on a single supplier for critical components poses a supply chain risk.
Positive Signals
- Firm Fixed Price contract type provides cost certainty for the government.
- Award to a major aerospace manufacturer like General Electric suggests access to advanced technology and reliable production.
- Long-term award indicates a strategic commitment to a specific engine platform, ensuring sustained support.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft propulsion systems. The market for advanced jet engines is highly concentrated, with a few major players dominating. General Electric is a key incumbent in this space, particularly with its F414 engine family, which powers several advanced fighter aircraft. The contract value is significant, reflecting the high cost and technological sophistication of military-grade jet engines and their associated spare parts.
Small Business Impact
This contract does not appear to have a small business set-aside component. As a sole-source award to a large prime contractor, General Electric, the primary focus is on the prime performance. However, General Electric is expected to utilize its supply chain, which may include small businesses for specific components or services, but this is not explicitly detailed in the provided data.
Oversight & Accountability
Oversight for this contract would typically be managed by the Naval Air Systems Command (NAVAIR), responsible for the acquisition, development, and sustainment of naval aviation systems. Accountability measures are embedded within the Firm Fixed Price contract terms, requiring GE to deliver specified engines and parts within the agreed price. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal and potentially Inspector General oversight.
Related Government Programs
- F414 Engine Production Contracts
- Naval Aviation Sustainment Programs
- Defense Logistics Agency (DLA) Spare Parts Procurement
- Aircraft Engine Maintenance, Repair, and Overhaul (MRO) Services
Risk Flags
- Sole Source Award
- Long Contract Duration
- Critical Component Dependency
Tags
defense, department-of-the-navy, naval-air-systems-command, general-electric-company, aircraft-engines, spare-parts, firm-fixed-price, sole-source, massachusetts, large-business, 1999, f414-ge-400
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $948.2 million to GENERAL ELECTRIC COMPANY. 199910!1700!1047!AA427!NAVAL AIR SYSTEMS COMMAND !N0001999C1175 !A!*!* !19990622!20000531!001408509!001367960!001367960!N!99207!GENERAL ELECTRIC COMPANY INC !1000 WESTERN AVE !LYNN !MA!01910!37490!009!25!LYNN !ESSEX !MASS !0001!+000022000000!N!N!000000000000!2840!GAS TURBINES AND JET ENGINES, ACFT & COMPS !A1B!AIRCRAFT ENGINES AND SPARES !2BJN!F414-GE-400 !3724!1!*!*!*!B!A!*!D !N!J!1!0
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 $948.2 million.
What is the period of performance?
Start: 1999-06-22. End: 2011-08-01.
What is the historical spending pattern for F414-GE-400 engines and spares by the Department of the Navy?
The provided data indicates a single contract award of $214,378,000 to General Electric for F414-GE-400 engines and spares, spanning from June 22, 1999, to August 1, 2011. This represents a significant, long-term investment in this specific engine type. To understand the broader historical spending pattern, one would need to analyze other contracts awarded for the F414 engine family across different fiscal years and potentially by other military branches. This single data point suggests a sustained need for this engine, likely tied to specific aircraft platforms like the F/A-18 Super Hornet, implying consistent procurement and sustainment funding over an extended period.
How does the per-unit cost of the F414-GE-400 engine under this contract compare to market rates or similar military jet engines?
Determining a precise per-unit cost for the F414-GE-400 engine from this contract is complex, as the total award covers both engines and a significant quantity of spare parts over a long duration. The contract value is $214,378,000. If we were to assume the entire value was for engines and divide by a hypothetical number of engines, the cost would be highly variable. However, based on public estimates and other contract awards for similar advanced turbofan engines, the F414-GE-400 is a high-performance engine, and its cost per unit can range from several million dollars to upwards of $10 million, depending on configuration and quantity. Without a breakdown of engines versus spares and the exact quantities, a direct comparison to market rates is speculative. Given its sole-source nature and advanced capabilities, the pricing is likely aligned with specialized defense aerospace components rather than commercial off-the-shelf items.
What are the key performance indicators (KPIs) used to assess the performance of General Electric under this contract?
While the specific Key Performance Indicators (KPIs) are not detailed in the provided contract abstract, typical performance metrics for such defense contracts include on-time delivery of engines and spare parts, adherence to technical specifications and quality standards, and meeting contractual milestones. For a Firm Fixed Price contract, meeting delivery schedules and ensuring the components function as specified are paramount. The Naval Air Systems Command would likely monitor defect rates, warranty claims, and the overall reliability of the delivered engines and parts. Performance reviews and potential penalties or incentives tied to meeting or exceeding these KPIs would be standard practice, even under a sole-source award, to ensure the government receives the expected value and operational capability.
What is the track record of General Electric Company Inc. in delivering complex aerospace components to the Department of Defense?
General Electric Company Inc. has a long and extensive track record of delivering complex aerospace components, particularly jet engines, to the Department of Defense. They are a primary supplier for numerous military aircraft platforms, including engines like the F414, F110, and GE3000 series. Their history includes numerous large-scale contracts for engine production, sustainment, and upgrades. While specific performance details for every contract are not publicly available, GE's continued role as a major defense contractor indicates a generally strong performance history in meeting the demanding requirements of military aviation. Issues or challenges on specific contracts are not uncommon in such complex industries, but their sustained market presence suggests a high degree of reliability and capability.
What are the potential risks associated with relying on a sole-source provider like General Electric for critical aircraft engines?
Relying on a sole-source provider like General Electric for critical aircraft engines presents several potential risks. Firstly, there is a lack of competitive pressure, which can lead to higher prices than might be achieved in a competitive bidding environment. Secondly, the government becomes dependent on a single supplier, creating vulnerability in the supply chain; any production issues, financial instability, or strategic shifts by GE could directly impact the availability of essential components. Thirdly, without alternative sources, the government has less leverage in negotiating terms, modifications, or future upgrades. Finally, there's a risk of technological stagnation if the sole provider does not face external pressure to innovate or improve their offerings.
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: 1999-06-22
Current End Date: 2011-08-01
Potential End Date: 2011-08-01 00:00:00
Last Modified: 2011-08-09
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