DoD's $102M aircraft engine contract to General Electric awarded without competition
Contract Overview
Contract Amount: $102,166,520 ($102.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2025-09-30
End Date: 2027-09-30
Contract Duration: 730 days
Daily Burn Rate: $140.0K/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 $102.2 million to GENERAL ELECTRIC COMPANY for work described as: PACER PHANTOM Key points: 1. Contract awarded on a firm-fixed-price basis, indicating price certainty for the government. 2. Long-term contract duration of 730 days suggests a sustained need for these parts. 3. The contract is for aircraft engine and engine parts manufacturing, a critical defense sector. 4. Awarded by the Defense Logistics Agency, a key entity for military supply chain management. 5. The contract's value of over $100 million signifies a substantial investment in aviation readiness. 6. The absence of competition raises questions about potential cost efficiencies and market responsiveness.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without comparable sole-source awards for similar engine parts. The firm-fixed-price structure is generally favorable for cost control, but the lack of competition prevents a direct comparison of pricing against market alternatives. Without competitive bids, it's difficult to ascertain if the government secured the best possible price or if there's an opportunity for cost savings through a more open bidding process. The total value suggests a significant procurement, making price scrutiny particularly important.
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 approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that typically arise from a competitive bidding process. This can limit the government's leverage in negotiating favorable terms.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less assurance that the price reflects the lowest possible cost for these essential aircraft engine parts.
Public Impact
The Department of Defense benefits from the continued supply of critical aircraft engine parts, ensuring operational readiness. This contract supports the maintenance and sustainment of military aircraft fleets. The primary beneficiaries are military aviation units that rely on these engines for their missions. The contract has implications for the aerospace manufacturing workforce, particularly at General Electric. Geographic impact is centered around the manufacturing facilities of General Electric, likely in Kansas based on the 'ST' and 'SN' codes.
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 government spending.
- Dependence on a single supplier could create supply chain risks if issues arise with the contractor.
- The substantial value of the contract warrants close scrutiny of its necessity and pricing.
Positive Signals
- Firm-fixed-price contract type helps to lock in costs and manage budget predictability.
- Awarding to General Electric, a known entity in aircraft engine manufacturing, suggests a reliance on established expertise.
- The contract ensures the continued availability of essential parts for critical defense assets.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, complex manufacturing processes, and significant R&D investment. Aircraft engine manufacturing, in particular, is a specialized niche dominated by a few major players. This contract falls within the 'Aircraft Engine and Engine Parts Manufacturing' industry code (NAICS 336412). Spending in this area is crucial for maintaining military aviation capabilities. Comparable spending benchmarks are difficult to establish for sole-source awards, but the overall defense budget allocates substantial resources to aircraft sustainment and parts.
Small Business Impact
This contract does not appear to include a small business set-aside. Given the specialized nature of aircraft engine manufacturing and the sole-source award to a large prime contractor like General Electric, the direct impact on small businesses through set-asides is unlikely. However, General Electric may engage small businesses as subcontractors for components or services, though this is not explicitly detailed in the provided data. The absence of a set-aside means opportunities for small businesses to directly compete for this prime contract were not available.
Oversight & Accountability
Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. As a sole-source award, the justification for the procurement method and the pricing will be subject to review. Transparency is limited due to the lack of a competitive process, but contract performance monitoring, delivery schedules, and quality control would be key areas of oversight. Accountability rests with the contracting officer and the DLA to ensure the government receives the goods as specified and at a fair price, even without competition.
Related Government Programs
- Defense Logistics Agency Procurement
- Aircraft Engine Maintenance
- Military Aviation Readiness
- General Electric Defense Contracts
- Sole-Source Defense Procurements
Risk Flags
- Sole-source award
- Lack of competition
- High contract value
Tags
defense, department-of-defense, defense-logistics-agency, aircraft-engine-parts, manufacturing, sole-source, firm-fixed-price, large-contract, kansas, general-electric, sustained-procurement
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $102.2 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 $102.2 million.
What is the period of performance?
Start: 2025-09-30. End: 2027-09-30.
What is the justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was 'NOT COMPETED' and is 'sole-source'. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, existing system compatibility requirements, or urgent and compelling circumstances where competition is not feasible. Without further documentation (e.g., Justification and Approval document), the specific reason for this sole-source award remains unknown. However, for specialized components like aircraft engines and parts, it is common for a single manufacturer to hold the necessary intellectual property and production expertise, making competition difficult or impossible.
How does the firm-fixed-price (FFP) contract type benefit the government in this sole-source scenario?
A firm-fixed-price contract type is generally advantageous for the government as it establishes a ceiling price that is not subject to adjustment based on the contractor's cost experience. In a sole-source situation, where competitive pricing is absent, the FFP structure provides a degree of cost certainty for the government. It shifts the risk of cost overruns to the contractor, incentivizing them to manage their expenses efficiently to maximize profit. While it doesn't guarantee the lowest possible price (as competition would), it protects the government from unexpected cost increases during the contract performance period, making budgeting more predictable.
What are the potential risks associated with a sole-source award of this magnitude?
The primary risk of a sole-source award, especially one valued at over $102 million, is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not be achieving the best possible value for its expenditure. Another risk is contractor complacency; a sole-source provider might have less incentive to innovate or improve efficiency compared to a contractor facing market competition. Furthermore, reliance on a single supplier can create supply chain vulnerabilities. If the contractor experiences production issues, quality problems, or financial instability, it could significantly disrupt the supply of critical aircraft engine parts, impacting military readiness.
What is the historical spending pattern for aircraft engine and engine parts manufacturing by the Department of Defense?
Historical spending data for aircraft engine and engine parts manufacturing by the Department of Defense is substantial, reflecting the continuous need to maintain and upgrade military aviation fleets. The DoD consistently procures engines, spare parts, and related services from major aerospace manufacturers. While specific figures fluctuate annually based on modernization programs, operational tempo, and budget allocations, this sector represents a significant portion of the defense procurement budget. Contracts in this category are often long-term and can involve both competitive and sole-source awards, depending on the specific part, technology, and manufacturer's market position. The $102 million figure for this single contract is significant but aligns with the scale of investment typical for major defense aerospace components.
How does the geographic location (Kansas) influence the contract's execution and oversight?
The contract's indication of 'ST' (State) as 'KS' (Kansas) suggests that General Electric's relevant manufacturing or operational facilities for this contract are located in Kansas. This geographic focus has implications for contract oversight, potentially involving local DLA contracting officers or site representatives. It also means that any workforce impacts, economic benefits, or environmental considerations related to contract execution will be concentrated in that region. For oversight, proximity can sometimes facilitate more direct monitoring of production and quality control, although modern communication and logistics often allow for effective oversight regardless of geographic distance. The specific location might also be relevant if there are unique state-level regulations or incentives impacting the contractor.
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: $102,166,520
Exercised Options: $102,166,520
Current Obligation: $102,166,520
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: 2025-09-30
Current End Date: 2027-09-30
Potential End Date: 2027-09-30 00:00:00
Last Modified: 2025-11-03
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