DHS awards $555M contract for UAS operational and maintenance support to General Atomics Aeronautical Systems, Inc

Contract Overview

Contract Amount: $555,221,929 ($555.2M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2022-04-01

End Date: 2026-09-30

Contract Duration: 1,643 days

Daily Burn Rate: $337.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: UAS OPERATIONAL AND MAINTENANCE SUPPORT

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $555.2 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: UAS OPERATIONAL AND MAINTENANCE SUPPORT Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. Long contract duration of over 4 years suggests a need for sustained operational support. 4. The primary contractor, General Atomics Aeronautical Systems, Inc., is a significant player in the defense and aerospace sector. 5. The contract falls under 'Other Support Activities for Air Transportation', indicating a specialized service niche. 6. Lack of competition may limit opportunities for innovative solutions from other vendors.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a direct value-for-money assessment challenging without detailed cost breakdowns. Benchmarking against similar sole-source contracts for UAS maintenance is difficult due to proprietary pricing. However, the significant total award amount suggests a substantial investment in these services, and the fixed fee component aims to provide some cost control for the contractor's effort.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competitive bidding. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to drive down prices. Without a competitive process, there is less assurance that the government secured the best possible price for these critical services.

Public Impact

Enhances border security operations through the sustained availability of Unmanned Aircraft Systems (UAS). Supports U.S. Customs and Border Protection (CBP) in surveillance, interdiction, and reconnaissance missions. Ensures the operational readiness of critical aerial assets for national security. Potentially impacts the workforce involved in operating and maintaining these advanced aerial systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Cost-plus-fixed-fee structure requires diligent oversight to prevent cost overruns.
Long-term nature of the contract may reduce flexibility in adapting to future technological advancements.

Positive Signals

Ensures continuity of essential UAS operational and maintenance support for critical national security missions.
Leverages the specialized expertise of a known contractor with established capabilities in UAS.
Provides a stable platform for maintaining advanced aerial surveillance assets.

Sector Analysis

The Unmanned Aircraft Systems (UAS) market is a rapidly growing segment within the aerospace and defense industry. This contract for operational and maintenance support fits within the broader 'Other Support Activities for Air Transportation' sector, specifically focusing on specialized aviation services. The total spending on UAS across the federal government is substantial and increasing, driven by demand for intelligence, surveillance, and reconnaissance (ISR) capabilities. This contract represents a significant portion of spending within this niche for the Department of Homeland Security.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, General Atomics Aeronautical Systems, Inc., is a large aerospace company. There is no explicit information provided regarding subcontracting plans for small businesses. This sole-source award may limit opportunities for small businesses to participate in the provision of UAS operational and maintenance support under this specific contract.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of Homeland Security (DHS) and U.S. Customs and Border Protection (CBP). As a cost-plus-fixed-fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee remains appropriate for the effort expended. Transparency regarding cost reporting and performance metrics will be key. While specific Inspector General (IG) jurisdiction is not detailed, DHS has an Office of the Inspector General that typically oversees agency spending and operations.

Related Government Programs

Department of Defense UAS Programs
Federal Aviation Administration (FAA) Drone Regulations
Department of Homeland Security Border Surveillance Technology

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $555.2 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. UAS OPERATIONAL AND MAINTENANCE SUPPORT

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 Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $555.2 million.

What is the period of performance?

Start: 2022-04-01. End: 2026-09-30.

What is the historical spending pattern for UAS operational and maintenance support by the Department of Homeland Security?

Analyzing historical spending for UAS operational and maintenance support by DHS requires access to detailed procurement data over several fiscal years. Typically, such spending would be categorized under specific contract vehicles or program elements related to border security and aerial surveillance. A trend analysis would reveal if this $555 million award represents a significant increase or a continuation of established investment levels. Factors influencing historical spending include the number of UAS platforms acquired, their operational tempo, and the evolution of maintenance requirements. Without specific historical data points for this contract or similar services, it's difficult to provide precise figures, but the overall federal investment in UAS capabilities has seen consistent growth.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar UAS maintenance services?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used for complex services where the scope of work is not precisely defined at the outset, or for R&D efforts. In CPFF contracts, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if requirements change but carries a higher risk of cost overruns if not managed diligently. For UAS maintenance, FFP might be preferred for routine, well-defined tasks, offering greater cost certainty. However, for evolving operational needs or specialized support, CPFF can be advantageous, provided robust oversight is in place to control costs and ensure the fixed fee remains reasonable relative to the effort.

What are the specific performance metrics or Key Performance Indicators (KPIs) associated with this contract?

The provided data does not detail the specific performance metrics or Key Performance Indicators (KPIs) for this UAS operational and maintenance support contract. Typically, for such services, KPIs would focus on aspects like aircraft availability rates, mean time between failures (MTBF), response times for maintenance requests, mission readiness percentages, and adherence to safety and quality standards. The effectiveness of the contractor's performance would be measured against these predefined metrics, often influencing future contract awards or incentive structures. The absence of this information in the summary data highlights a potential area for further inquiry into the contract's performance management framework.

What is the track record of General Atomics Aeronautical Systems, Inc. in delivering UAS operational and maintenance support to government agencies?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a well-established and extensive track record in developing, manufacturing, and supporting Unmanned Aircraft Systems (UAS) for various government agencies, including the Department of Defense and Department of Homeland Security. They are known for their Predator and Reaper series of drones, which are widely used for intelligence, surveillance, and reconnaissance (ISR) missions. Their experience encompasses not only aircraft production but also the provision of integrated logistics, training, and operational support services. This includes maintenance, repair, and overhaul (MRO) of UAS platforms and associated ground control systems, indicating a strong capability to fulfill the requirements of this DHS contract.

Are there any known risks or challenges associated with the long duration (over 4 years) of this contract?

The long duration of this contract, spanning over four years, presents several potential risks and challenges. Firstly, technological advancements in UAS capabilities can occur rapidly; a long-term contract might lock the government into using systems or support methods that become outdated. Secondly, market conditions and pricing for components or specialized labor could fluctuate significantly over such a period, potentially impacting the cost-effectiveness of the fixed fee. Thirdly, maintaining consistent performance and contractor engagement over an extended period requires ongoing diligent oversight. Finally, unforeseen geopolitical or operational shifts could alter the specific needs for UAS support, making the contract less adaptable to evolving requirements without costly modifications.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 70B02C21R00000018

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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: $793,118,078

Exercised Options: $555,221,929

Current Obligation: $555,221,929

Actual Outlays: $183,829,038

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline