DoD Awards $399M for T700 Engine Production to General Electric, Raising Oversight Concerns
Contract Overview
Contract Amount: $399,220,796 ($399.2M)
Contractor: General Electric Company
Awarding Agency: Department of Defense
Start Date: 2024-12-12
End Date: 2029-12-31
Contract Duration: 1,845 days
Daily Burn Rate: $216.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: T700 SERIES ENGINE PRODUCTION
Place of Performance
Location: LYNN, ESSEX County, MASSACHUSETTS, 01905
Plain-Language Summary
Department of Defense obligated $399.2 million to GENERAL ELECTRIC COMPANY for work described as: T700 SERIES ENGINE PRODUCTION Key points: 1. Significant contract value of $399.2 million for aircraft engine production. 2. Sole-source award to General Electric Company limits competitive pricing. 3. Long contract duration of 1845 days (approx. 5 years) warrants close monitoring. 4. The sector is Aircraft Engine and Engine Parts Manufacturing, a critical defense component.
Value Assessment
Rating: questionable
The contract's firm fixed price structure is standard, but the lack of competition makes a direct pricing assessment difficult. Benchmarking against similar sole-source engine production contracts would be necessary to determine true value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Electric Company. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition in this significant award may result in taxpayers paying a premium for the T700 engine production.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Potential for reduced innovation and efficiency without market pressure. Ensuring the long-term sustainment and availability of critical aircraft engines.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Established manufacturer with proven technology
- Firm fixed price contract provides cost certainty
Sector Analysis
The Aircraft Engine and Engine Parts Manufacturing sector is highly specialized and often dominated by a few key players. Defense contracts in this area are substantial, reflecting the high cost and complexity of military aviation components.
Small Business Impact
This contract was awarded to General Electric Company, a large business. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight to ensure fair pricing and performance. The Department of Defense should actively monitor contract execution and explore future competitive opportunities.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award may lead to inflated prices.
- Long contract duration increases exposure to market fluctuations.
- Lack of competition limits potential for cost savings.
- Dependence on a single supplier for critical components.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, ma, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $399.2 million to GENERAL ELECTRIC COMPANY. T700 SERIES ENGINE PRODUCTION
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 Army).
What is the total obligated amount?
The obligated amount is $399.2 million.
What is the period of performance?
Start: 2024-12-12. End: 2029-12-31.
What is the justification for the sole-source award, and has an adequate price analysis been performed?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. An adequate price analysis is crucial to ensure the government is not overpaying. This would involve comparing the proposed price to historical prices, other government contracts, or commercial prices for similar items, adjusted for differences.
What are the risks associated with a long-term sole-source contract for critical engine production?
Long-term sole-source contracts carry risks of price escalation, reduced incentive for innovation, and potential vendor lock-in. For critical engine production, this could impact readiness if costs become prohibitive or if the sole provider faces production issues. Continuous monitoring and negotiation are vital.
How will the effectiveness of this contract be measured, particularly given the lack of competition?
Effectiveness will be measured by meeting delivery schedules, adhering to quality standards, and ensuring the engines perform as specified. Without competition, the government must rely on strong contract management, performance metrics, and potentially independent cost reviews to gauge value and efficiency.
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: 1000 WESTERN AVE, LYNN, MA, 01905
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: $399,220,796
Exercised Options: $399,220,796
Current Obligation: $399,220,796
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W58RGZ24D0053
IDV Type: IDC
Timeline
Start Date: 2024-12-12
Current End Date: 2029-12-31
Potential End Date: 2029-12-31 12:12:00
Last Modified: 2025-05-20
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