DoD's $30.8M contract for aircraft engine parts awarded to General Electric, with no competition
Contract Overview
Contract Amount: $30,780,498 ($30.8M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-03-24
End Date: 2024-03-29
Contract Duration: 736 days
Daily Burn Rate: $41.8K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PACER PHANTOM
Place of Performance
Location: ARKANSAS CITY, COWLEY County, KANSAS, 67005
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $30.8 million to GENERAL ELECTRIC COMPANY for work described as: PACER PHANTOM Key points: 1. The contract value of $30.8 million represents a significant investment in maintaining critical aircraft engine components. 2. Awarded to a single, established manufacturer, this suggests a reliance on specialized production capabilities. 3. The 'NOT COMPETED' status raises questions about potential missed opportunities for cost savings through competitive bidding. 4. The contract duration of 736 days indicates a need for sustained supply chain support for these parts. 5. The fixed-price contract type aims to provide cost certainty for the government, shifting risk to the contractor. 6. The absence of small business set-aside flags indicates this contract was not specifically targeted to support small businesses.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without detailed cost breakdowns or comparisons to similar sole-source awards for specialized aircraft engine parts. The reported value of $30.8 million for a 736-day duration suggests a substantial, but not necessarily excessive, price for critical components. Further analysis would require understanding the specific parts, their complexity, and the market for their production. The lack of competition inherently limits the ability to assess if the price represents the best value achievable.
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 typically occurs when only one responsible source is available or when the agency determines that a solicitation for full and open competition is not advantageous. The lack of competition means that potential cost savings that could arise from multiple bidders vying for the contract were not realized. This approach may be justified if General Electric is the sole manufacturer or authorized repairer of these specific engine parts.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing bids, it is difficult to ascertain if the price reflects the lowest possible cost for these essential aircraft components.
Public Impact
The primary beneficiaries are the Department of Defense and its aviation units, ensuring the operational readiness of aircraft. The services delivered involve the manufacturing and supply of critical aircraft engine and engine parts. The geographic impact is primarily within the United States, supporting military operations globally. Workforce implications include supporting jobs within General Electric's manufacturing and supply chain operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to higher prices than a competed contract.
- Sole-source awards can reduce transparency and accountability in pricing.
- Reliance on a single supplier can create supply chain vulnerabilities.
- Potential for contractor to leverage market dominance for less favorable terms.
Positive Signals
- Award to a known, established manufacturer like General Electric suggests reliability and quality.
- Fixed-price contract type provides budget certainty for the government.
- Ensures availability of critical parts for national defense readiness.
Sector Analysis
This contract falls within the 'Aircraft Engine and Engine Parts Manufacturing' sector, a specialized segment of the aerospace industry. This sector is characterized by high barriers to entry due to complex technology, stringent quality control, and significant research and development investments. Spending in this area is crucial for maintaining military aviation capabilities. Comparable spending benchmarks would typically involve other sole-source or limited-competition contracts for similar high-value, specialized aerospace components.
Small Business Impact
This contract does not appear to have a small business set-aside, as indicated by 'sb: false'. Consequently, there are no direct subcontracting implications for small businesses mandated by this specific award. The absence of a set-aside means that opportunities for small businesses to participate in fulfilling this requirement were not explicitly prioritized through this contracting vehicle.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. Accountability measures are inherent in the fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Aircraft Maintenance and Repair
- Aerospace Manufacturing
- Defense Logistics
- Propulsion Systems
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for higher costs due to lack of competition.
- Limited transparency in pricing justification.
- Supply chain dependency on a single manufacturer.
Tags
defense, department-of-defense, general-electric-company, aircraft-engine-and-engine-parts-manufacturing, not-competed, sole-source, firm-fixed-price, delivery-order, kansas, defense-logistics-agency, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.8 million to GENERAL ELECTRIC COMPANY. PACER PHANTOM
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 Logistics Agency).
What is the total obligated amount?
The obligated amount is $30.8 million.
What is the period of performance?
Start: 2022-03-24. End: 2024-03-29.
What is the specific nature of the aircraft engine and engine parts being procured under this contract?
The provided data indicates the contract is for 'Aircraft Engine and Engine Parts Manufacturing' (NAICS code 336412) and was awarded to General Electric Company. While the specific part numbers or types of components are not detailed in the summary data, this NAICS code covers the production of aircraft engines, engine parts, and related components. Given the sole-source nature and the contractor, it is highly probable that these are specialized, proprietary, or critical components for which General Electric holds unique manufacturing capabilities or intellectual property rights, essential for the operational readiness of specific military aircraft platforms.
Why was this contract awarded on a sole-source basis instead of being competed?
The data explicitly states the contract was 'NOT COMPETED' and is categorized as 'sole-source'. Agencies typically award contracts on a sole-source basis when only one responsible source is available to meet the requirement. This can occur due to unique capabilities, proprietary technology, essential follow-on support for previously procured systems, or urgent and compelling circumstances where competition is not feasible. For specialized aircraft engine parts, it is common for a single manufacturer like General Electric to possess the necessary technical expertise, tooling, and certifications, making full and open competition impractical or impossible without significant delays and costs.
How does the contract value of $30.8 million compare to similar sole-source awards for aircraft engine parts?
Direct comparison of the $30.8 million contract value is difficult without knowing the exact parts procured and their specifications. However, for specialized, high-performance aircraft engine components, such values are not uncommon, especially for multi-year contracts. Sole-source awards in this category often reflect the high cost of research, development, specialized manufacturing processes, and stringent quality assurance required by the defense industry. The duration of 736 days (approximately two years) also contributes to the overall value. A more precise benchmark would require access to historical sole-source contract data for similar engine parts from the Defense Logistics Agency or other DoD components.
What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?
The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. Other risks include reduced transparency in cost justification, potential for contractor complacency regarding efficiency, and supply chain vulnerability if the sole source faces production issues. Furthermore, it limits opportunities for other capable manufacturers to enter the market or for the government to explore alternative, potentially more cost-effective solutions. This necessitates robust government oversight to ensure fair pricing and performance.
What is General Electric Company's track record with the Department of Defense for aircraft engine parts?
General Electric Company (GE) is a major, long-standing contractor for the Department of Defense, particularly in the realm of aircraft propulsion and engine components. GE has a well-established history of supplying engines and parts for a wide array of military aircraft, including fighter jets, bombers, transport planes, and helicopters. Their track record typically involves delivering complex, high-technology products under demanding specifications. While specific performance metrics for individual contracts are not provided here, GE's continued role as a primary supplier indicates a generally accepted capability and reliability in meeting DoD's stringent requirements for aviation systems.
What is the historical spending pattern for aircraft engine and engine parts manufacturing by the Department of Defense?
Historical spending by the Department of Defense on aircraft engine and engine parts manufacturing has been substantial and consistent, reflecting the critical role of aviation in national defense. This spending encompasses research and development, procurement of new engines and parts, and sustainment/maintenance services for existing fleets. Contracts in this category often involve large dollar values due to the complexity and technological sophistication of the products. Spending patterns are influenced by modernization programs, operational tempo, and the lifecycle of various aircraft platforms. Sole-source awards are not uncommon in this sector due to the specialized nature of the products and the established relationships with key manufacturers like GE.
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
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 NEUMANN WAY, CINCINNATI, OH, 45215
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,780,498
Exercised Options: $30,780,498
Current Obligation: $30,780,498
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPE4AX16D9408
IDV Type: IDC
Timeline
Start Date: 2022-03-24
Current End Date: 2024-03-29
Potential End Date: 2024-03-29 00:00:00
Last Modified: 2024-02-01
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