Cost A Major Factor in GE Win Of Army Helicopter Engines Contract

By Frank Wolfe | June 12, 2019
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In addition to being part of the U.S. Army's plans for Future Vertical Lift, ITEP is to install GE T901 engines on Boeing AH-64 Apaches and Lockheed Martin UH-60 Black Hawks, such as this one. (Lockheed Martin Photo)

In its evaluation of the two bids for the Improved Turbine Engine Program (ITEP), the U.S. Army rated Advanced Turbine Engine Company's (ATEC) dual-spool T900 engine "outstanding" in engine design and performance.

Ultimate victor General Electric [GE] received an "outstanding" rating for platform integration of its T901 single-spool engine, and GE's total engine development cost of about $530 million was $162 million below that of ATEC, according to the just-released details of the Government Accountability Office decision on May 30 to deny ATEC's protest of the Army's $517 million ITEP Engineering Manufacturing and Development award to GE.


"Looking past the adjectival ratings assigned by the SSEB [Source Selection Evaluation Board] to the details of the evaluation reveals that even though GE and ATEC would deliver engines with very comparable performance, GE offered a stronger technical proposal overall which is more advantageous to the Army than ATEC’s, even with a moderate level of risk," the Army Source Selection Authority said in deciding to award the contract to GE.

"Likewise, GE’s evaluated cost/price is 23.5 percent less than that of ATEC, and GE’s proposal was found to be more advantageous to ATEC’s with regard to the third most important evaluation factor, [life cycle cost]. Giving due consideration to ATEC’s advantage in the least important [small business participation] factor, GE has distinct advantages in each of the three highest weighted evaluation factors. When all non-cost factors are considered together, GE’s advantages in the [engineering design and development] factor and the [life cycle cost] factor far outweigh ATEC’s advantage in the least important [small business participation] factor. Even considering the relatively lower risk of ATEC’s technical proposal, I find that this lower risk and the identified [small business participation] advantage is not worth the payment of $162,962,934, which is a 30.7 percent price premium. In conclusion, I find that GE’s proposal presents the best value to the Army, and therefore I select GE as the awardee of the ITE EMD contract."

ITEP is likely worth billions of dollars as the new engines are to power Sikorsky [LMT] UH-60 Black Hawks, Boeing [BA] AH-64 attack helicopters and variants of the Future Vertical Lift program, including the Future Attack Reconnaissance Aircraft (FARA).

On May 30, GE re-started its work on the T901 after the Army lifted a stop-work order necessitated by ATEC's Feb. 19 bid protest.

ATEC did not respond by press time on June 12 to a request for comment on the new GAO report.

ITEP seeks an engine that is 50 percent more powerful, 25 percent more fuel efficient, and lasts 20 percent longer than the current Black Hawk and Apache T700 engines by GE — engines that GE said have run more than 100 million flight hours with the Army.

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