DoD awards $136.6M for aircraft spares and ground support equipment to General Atomics Aeronautical Systems

Contract Overview

Contract Amount: $136,616,612 ($136.6M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-07-12

End Date: 2018-07-29

Contract Duration: 2,208 days

Daily Burn Rate: $61.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CY11 SPARES AND GROUND SUPPORT EQUIPMENT

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $136.6 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: CY11 SPARES AND GROUND SUPPORT EQUIPMENT Key points: 1. Contract value represents a significant investment in maintaining critical aviation assets. 2. Sole-source award raises questions about potential price inflation and lack of competitive pressure. 3. Long contract duration (2208 days) suggests a sustained need for these specialized parts. 4. Focus on aircraft manufacturing sector highlights the importance of supply chain resilience. 5. Geographic concentration in California may indicate a regional industrial base strength. 6. Fixed-price contract type shifts some risk to the contractor, but oversight is crucial.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific itemized pricing. However, the total award of $136.6 million over approximately six years for specialized spares and ground support equipment suggests a substantial commitment. Given the sole-source nature, it's difficult to assess if this represents optimal value for money compared to a competitive scenario. Further analysis of unit costs for key components would be necessary to determine if pricing is aligned with market rates or historical trends for similar systems.

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 a specific contractor possesses unique capabilities, proprietary technology, or is the sole provider of essential parts. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a bidding process, potentially leading to higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without alternative offers, the government had limited leverage to negotiate the lowest possible price for these critical spares and support equipment.

Public Impact

The primary beneficiaries are the Department of Defense units operating aircraft manufactured by or supported by General Atomics Aeronautical Systems. Services delivered include the provision of essential spare parts and ground support equipment necessary for aircraft maintenance and operational readiness. The geographic impact is primarily centered around military bases and operational theaters where these aircraft are deployed, with a concentration of contract performance in California. Workforce implications include support for skilled labor within the aerospace manufacturing and maintenance sectors, particularly in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may result in higher costs.
Long contract duration increases exposure to potential cost overruns or price escalations.
Lack of transparency in pricing due to sole-source nature hinders value assessment.
Dependence on a single supplier for critical spares creates supply chain risk.

Positive Signals

Fixed-price contract type provides some cost certainty for the government.
Award to a known contractor (General Atomics) may indicate a reliance on established expertise.
Focus on spares and support equipment is crucial for maintaining operational readiness.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft components and support systems. The market for such specialized parts is often characterized by high barriers to entry due to technical expertise, intellectual property, and stringent regulatory requirements. General Atomics Aeronautical Systems is a key player in this niche, particularly known for its unmanned aerial systems. Spending benchmarks in this area are highly specific to the platform and type of equipment, but significant government investment is typical for maintaining advanced military aviation fleets.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, General Atomics Aeronautical Systems, is a large business. There is no explicit information provided regarding subcontracting plans to small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem for this particular award is likely minimal, though the overall health of the aerospace supply chain indirectly affects small businesses within it.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract terms, including delivery schedules and quality standards. Transparency is limited due to the sole-source nature and the proprietary aspects of defense contracting. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Unmanned Aerial Vehicle (UAV) Procurement
Aircraft Maintenance and Repair
Defense Logistics and Supply Chain Management
Aerospace Manufacturing Contracts
Ground Support Equipment Procurement

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price inflation
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $136.6 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. CY11 SPARES AND GROUND SUPPORT EQUIPMENT

Who is the contractor on this award?

The obligated recipient is GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $136.6 million.

What is the period of performance?

Start: 2012-07-12. End: 2018-07-29.

What is the historical spending trend for CY11 SPARES AND GROUND SUPPORT EQUIPMENT with General Atomics Aeronautical Systems?

Analyzing historical spending requires access to detailed contract databases beyond the provided data. The current award of $136.6 million spans from July 2012 to July 2018. To understand spending trends, one would need to examine prior and subsequent contracts for similar spares and ground support equipment awarded to General Atomics Aeronautical Systems, Inc. This would involve looking at contract values, quantities, and the specific types of spares procured over time. A trend analysis would reveal if spending has increased, decreased, or remained stable, potentially indicating changes in fleet size, operational tempo, or aging of the equipment requiring more maintenance.

How does the per-unit cost of key spares compare to industry benchmarks or previous contracts?

Determining the per-unit cost benchmark for this contract is not feasible with the provided summary data. The 'cpu' field is marked as 'N/A', and the data does not include itemized pricing for individual spares or ground support equipment. To perform such a comparison, detailed line-item data from the contract would be required, specifying the exact part numbers, quantities, and unit prices. This information would then need to be benchmarked against publicly available pricing data for similar components, or against historical pricing from previous, competitively awarded contracts for the same or equivalent parts. Without this granular detail, assessing the reasonableness of per-unit costs is speculative.

What are the specific risks associated with a sole-source award for critical aircraft components?

A sole-source award for critical aircraft components carries several significant risks. Primarily, it eliminates competitive pressure, which can lead to inflated pricing as the contractor faces no direct market challenge. This lack of competition can also reduce the incentive for the contractor to innovate or improve efficiency. Furthermore, it creates a dependency on a single supplier, making the supply chain vulnerable to disruptions caused by the contractor's financial instability, production issues, or geopolitical factors. The government also has less leverage in negotiating terms and conditions, potentially impacting delivery schedules or quality assurance.

What is the track record of General Atomics Aeronautical Systems, Inc. in delivering similar contracts for the DoD?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a well-established track record, particularly in the development and production of unmanned aerial systems (UAS) and related support equipment for the Department of Defense. They are a primary contractor for platforms like the Predator and Reaper drones. Their performance on similar contracts typically involves complex engineering, manufacturing, and sustainment services. While specific performance metrics for every contract are not publicly detailed, GA-ASI is generally recognized as a capable provider in its specialized domain. However, like any large defense contractor, they may have faced scrutiny or challenges on specific programs related to cost, schedule, or technical performance over their history.

How does this contract's value compare to overall DoD spending on aircraft spares and support equipment?

The $136.6 million awarded for spares and ground support equipment represents a specific allocation within the DoD's vast budget for aviation sustainment. To contextualize this, one would need to compare it against the total annual DoD budget for aircraft maintenance, repair, and overhaul (MRO), as well as the specific category of spares and support equipment. For instance, the DoD's overall MRO budget can run into tens of billions of dollars annually. This $136.6 million contract, while substantial in absolute terms, is likely a fraction of the total spending on keeping the entire military aviation fleet operational. Its significance lies in its contribution to the sustainment of specific aircraft platforms supported by General Atomics.

What are the potential implications of this contract on the broader aerospace manufacturing sector?

This contract contributes to the revenue and operational stability of General Atomics Aeronautical Systems, Inc., a significant player in the aerospace manufacturing sector, particularly in the UAS domain. It supports jobs within the company and potentially its supply chain, which includes other manufacturers and service providers. The award reinforces the importance of specialized manufacturing capabilities for defense applications. However, as a sole-source award, its impact on fostering broader competition or innovation within the sector might be limited compared to a competitively bid contract that could have brought in new players or encouraged diverse technological approaches.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Atomics (UEI: 859181984)

Address: 14200 KIRKHAM WAY, POWAY, CA, 92064

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: $136,759,038

Exercised Options: $136,617,158

Current Obligation: $136,616,612

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862010G3038

IDV Type: BOA

Timeline