DoD's $29.5M contract for aircraft engine parts awarded to General Electric Company, with no competition
Contract Overview
Contract Amount: $29,498,112 ($29.5M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2022-09-28
End Date: 2024-10-31
Contract Duration: 764 days
Daily Burn Rate: $38.6K/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 $29.5 million to GENERAL ELECTRIC COMPANY for work described as: PACER PHANTOM Key points: 1. The contract's value of $29.5 million represents a significant investment in maintaining critical aircraft engine components. 2. The sole-source award raises questions about potential price overruns and the absence of market-driven cost efficiencies. 3. A lack of competition increases the risk of contractor lock-in and limits opportunities for innovative solutions. 4. The contract duration of 764 days suggests a long-term need for these specific engine parts. 5. The award falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical area for defense readiness.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without comparable sole-source awards for similar specialized aircraft engine parts. However, the absence of competition inherently limits the ability to assess if the pricing reflects fair market value. Without competitive bids, it's difficult to determine if taxpayers received the best possible price for these critical components. Further analysis would require access to historical pricing data for similar sole-source procurements and internal cost estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, General Electric Company, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means there was no opportunity for price discovery through market forces, potentially leading to higher costs for the government.
Taxpayer Impact: Taxpayers may be paying a premium for these aircraft engine parts due to the absence of competitive pressure. This award limits the government's ability to leverage market dynamics to secure the most cost-effective solution.
Public Impact
The Department of Defense benefits from the continued availability of critical aircraft engine parts, ensuring operational readiness. This contract supports the maintenance and sustainment of aircraft engines, crucial for national security operations. The contract's performance is geographically tied to Kansas (ST: KS, SN: KANSAS), where General Electric Company's operations are located. The award likely sustains jobs within General Electric Company's manufacturing and support facilities, particularly in Kansas.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs for taxpayers.
- Lack of competition may reduce incentives for the contractor to innovate or improve efficiency.
- Dependence on a single supplier for critical parts can create supply chain vulnerabilities.
- Absence of a competitive process makes it harder to verify fair and reasonable pricing.
Positive Signals
- Award ensures continued availability of essential aircraft engine parts for defense operations.
- General Electric Company is a known entity with established expertise in aircraft engine manufacturing.
- The contract specifies a firm fixed price, providing cost certainty once awarded.
Sector Analysis
The Aircraft Engine and Engine Parts Manufacturing sector is a highly specialized and capital-intensive industry critical to the aerospace and defense sectors. It is characterized by high barriers to entry due to complex technology, stringent quality requirements, and significant R&D investment. Major players like General Electric Company dominate this market. Government spending in this area is essential for maintaining a modern and capable military fleet, often involving long-term sustainment contracts for complex systems.
Small Business Impact
This contract does not appear to involve a small business set-aside, as indicated by 'sb': false. There is no explicit information provided regarding subcontracting plans for small businesses. Without a competitive bidding process or specific set-aside requirements, the direct impact on the small business ecosystem is likely minimal, and opportunities for small business participation may be limited unless subcontracted by the prime.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense and the Defense Logistics Agency. Accountability measures are typically embedded within the contract terms, including performance standards and delivery schedules. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.
Related Government Programs
- Aircraft Engine Maintenance
- Defense Logistics Agency Procurement
- Sole-Source Defense Contracts
- Aircraft Parts Manufacturing
- Department of Defense Sustainment Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for price inflation
- Supply chain dependency
Tags
defense, department-of-defense, general-electric-company, aircraft-engine-parts, sole-source, not-competed, firm-fixed-price, delivery-order, kansas, aircraft-engine-and-engine-parts-manufacturing, defense-logistics-agency
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.5 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 $29.5 million.
What is the period of performance?
Start: 2022-09-28. End: 2024-10-31.
What is General Electric Company's track record with sole-source defense contracts?
General Electric Company (GE) has a long history of contracting with the U.S. government, particularly the Department of Defense, for a wide range of aerospace and defense products, including aircraft engines and components. While GE is a major defense contractor, specific data on its track record with sole-source awards for aircraft engine parts is not readily available in the public domain. Sole-source awards are typically justified by unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. GE's extensive experience and established position in the aerospace industry often make it a sole-source provider for its proprietary engine technologies. However, the frequency and justification for such awards are subject to government procurement regulations and oversight to ensure fair pricing and prevent undue reliance on a single supplier.
How does the $29.5M value compare to similar sole-source contracts for aircraft engine parts?
Directly comparing the $29.5 million value of this specific contract to similar sole-source awards for aircraft engine parts is challenging without access to a comprehensive database of historical sole-source procurements, including detailed specifications of the parts and their intended use. The value of such contracts can vary significantly based on the complexity, criticality, and volume of the parts required. General Electric Company is a primary manufacturer for many advanced military aircraft engines, and sole-source awards for proprietary components are not uncommon in this specialized sector. However, the absence of competitive bidding means that a direct 'value for money' comparison is inherently difficult. Government agencies typically rely on internal cost analyses, historical pricing data for similar items, and contractor cost proposals to justify the reasonableness of prices in sole-source situations.
What are the primary risks associated with this sole-source award?
The primary risks associated with this sole-source award are related to cost and competition. Without competitive bidding, there is a heightened risk that the government may not be obtaining the parts at the most favorable price, potentially leading to cost overruns. The lack of competition can also reduce the incentive for the contractor, General Electric Company, to innovate or improve efficiency, as there is no market pressure from rivals. Furthermore, sole-source awards can create a dependency on a single supplier for critical components, potentially leading to supply chain vulnerabilities if the contractor faces production issues or if geopolitical factors impact their operations. Ensuring fair and reasonable pricing and maintaining oversight are crucial to mitigate these risks.
How does this contract contribute to the overall effectiveness of the DoD's aircraft sustainment programs?
This contract is crucial for the operational effectiveness of the DoD's aircraft sustainment programs by ensuring the continued availability of essential engine parts. Aircraft engines are complex systems requiring regular maintenance and replacement of components to ensure reliability, performance, and safety. By securing a supply of these parts, the DoD can maintain its fleet readiness, minimizing downtime and ensuring that aircraft are available for missions. The specific parts procured under this contract likely support a particular engine model or fleet, contributing directly to the longevity and operational capability of those aircraft. The timely delivery of these parts, as stipulated in the contract, is vital for proactive maintenance schedules and rapid response to unexpected component failures.
What are the historical spending patterns for aircraft engine parts by the Department of Defense?
The Department of Defense historically spends billions of dollars annually on aircraft engine parts and related sustainment services. This spending is driven by the need to maintain a large and diverse fleet of military aircraft, ranging from fighter jets to transport planes and helicopters. Spending patterns are influenced by factors such as the age of the fleet, the introduction of new aircraft, geopolitical demands, and the lifecycle of specific engine models. Major engine manufacturers like General Electric Company, Rolls-Royce, and Pratt & Whitney are significant recipients of these funds. Procurement often involves a mix of competitive contracts for common parts and sole-source contracts for proprietary or highly specialized components, reflecting the complex nature of aerospace sustainment.
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: $29,498,112
Exercised Options: $29,498,112
Current Obligation: $29,498,112
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: 2022-09-28
Current End Date: 2024-10-31
Potential End Date: 2024-10-31 00:00:00
Last Modified: 2025-01-15
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