DoD awards $171.8M for Aircraft Engine Parts to General Electric, raising concerns about competition
Contract Overview
Contract Amount: $171,876,374 ($171.9M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-09-05
End Date: 2026-09-30
Contract Duration: 755 days
Daily Burn Rate: $227.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PACER PHANTOM
Place of Performance
Location: WINFIELD, COWLEY County, KANSAS, 67156
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $171.9 million to GENERAL ELECTRIC COMPANY for work described as: PACER PHANTOM Key points: 1. Significant contract value of $171.8 million. 2. Sole awardee is General Electric Company, limiting competition. 3. Potential risk due to lack of competitive bidding. 4. Sector is Aircraft Engine and Engine Parts Manufacturing.
Value Assessment
Rating: questionable
The contract value of $171.8 million for aircraft engine parts appears high without competitive benchmarking. Further analysis is needed to determine if this price is reasonable compared to similar contracts or market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award could result in taxpayers paying a premium for essential aircraft engine parts.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Reliance on a single supplier could impact future pricing and availability. The Department of Defense's procurement strategy warrants scrutiny for potential cost savings.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Potential for overpayment
Positive Signals
- Essential defense procurement
- Established supplier relationship
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often substantial, making competitive sourcing crucial for cost efficiency.
Small Business Impact
The contract data indicates no specific set-aside for small businesses, and the awardee is a large corporation. This suggests limited direct opportunities for small businesses within this specific contract.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure fair pricing and prevent potential abuses. Accountability for the procurement decision and cost justification is paramount.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in price negotiation
- Over-reliance on a single supplier
- Possible missed opportunities for cost savings
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ks, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $171.9 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 $171.9 million.
What is the period of performance?
Start: 2024-09-05. End: 2026-09-30.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Agencies must conduct thorough market research and price analyses to ensure the negotiated price is fair and reasonable, often comparing it to historical data or independent cost estimates. Without this information, the lack of competition raises significant cost concerns.
What are the long-term risks associated with relying on General Electric as the sole provider for these critical aircraft engine parts?
The long-term risks include potential price escalation due to lack of competition, reduced innovation from the supplier, and supply chain vulnerabilities if GE faces production issues. The DoD might also become overly dependent, limiting its flexibility in future procurement decisions and potentially impacting readiness if parts become scarce or prohibitively expensive.
How does this sole-source award align with the Department of Defense's stated goals for promoting competition and achieving cost savings in its acquisitions?
Sole-source awards inherently contradict the goal of promoting competition. While exceptions exist for valid reasons, a $171.8 million contract awarded without competition raises questions about whether all avenues for competitive sourcing were explored. Agencies are expected to maximize competition to achieve cost savings, and this award appears to deviate from that principle.
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $171,876,374
Exercised Options: $171,876,374
Current Obligation: $171,876,374
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPE4AX24D9418
IDV Type: IDC
Timeline
Start Date: 2024-09-05
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2025-11-03
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