DoD awards $262M for MQ-1/MQ-9 aircraft logistics support to General Atomics Aeronautical Systems, Inc

Contract Overview

Contract Amount: $262,020,392 ($262.0M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-01-01

End Date: 2017-02-23

Contract Duration: 1,514 days

Daily Burn Rate: $173.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CONTRACTOR LOGISTICS SUPPORT FOR MQ-1/MQ-9 AIRCRAFT.

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $262.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: CONTRACTOR LOGISTICS SUPPORT FOR MQ-1/MQ-9 AIRCRAFT. Key points: 1. Significant contract value of $262M for long-term aircraft support. 2. Sole-source award to General Atomics Aeronautical Systems, Inc., raising competition concerns. 3. High risk associated with sole-source procurement for critical defense assets. 4. Spending falls within the Aircraft Manufacturing sector, with potential for cost overruns.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a sole-source award, offers limited incentive for cost efficiency. Benchmarking is difficult without competitive data, but the high total value suggests potential for significant taxpayer expense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to General Atomics Aeronautical Systems, Inc. This lack of competition limits price discovery and may lead to higher costs for the government.

Taxpayer Impact: The absence of competition likely results in higher prices than a fully competed contract, impacting taxpayer value.

Public Impact

Ensures continued operational readiness of vital MQ-1/MQ-9 drone fleets. Supports advanced military capabilities in surveillance and strike missions. Potential for extended reliance on a single contractor for critical support. Impacts the defense industrial base and contractor's market dominance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Cost-plus-fixed-fee structure may reduce cost control.
Long contract duration increases risk.
Lack of transparency in pricing due to no-bid.

Positive Signals

Ensures critical platform support.
Contractor has proven expertise.
Supports national security objectives.

Sector Analysis

This contract falls under the Aircraft Manufacturing sector, specifically supporting unmanned aerial vehicles. Spending benchmarks for similar long-term logistics support contracts can vary widely, but significant value suggests a critical program.

Small Business Impact

The contract was awarded to General Atomics Aeronautical Systems, Inc., a large business. There is no indication of small business participation in this sole-source award, potentially limiting opportunities for smaller firms in this specialized area.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency. Oversight is crucial for cost-plus-fixed-fee contracts, especially sole-source awards, to ensure fair pricing and prevent waste, fraud, and abuse.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competition
Potential for cost overruns
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $262.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. CONTRACTOR LOGISTICS SUPPORT FOR MQ-1/MQ-9 AIRCRAFT.

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 $262.0 million.

What is the period of performance?

Start: 2013-01-01. End: 2017-02-23.

What was the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without a competitive process, it's difficult to ascertain if alternative strategies were explored or if the government adequately validated the necessity of a sole-source approach. This lack of competition raises concerns about potential overpayment and reduced innovation.

How does the cost-plus-fixed-fee structure impact contractor performance and government oversight?

The cost-plus-fixed-fee (CPFF) structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it can incentivize contractors to perform, it offers less incentive for cost savings compared to fixed-price contracts. Effective government oversight is paramount to scrutinize costs, ensure efficiency, and prevent scope creep to safeguard taxpayer funds.

What is the long-term strategic implication of awarding critical aircraft support on a sole-source basis?

Sole-source awards for critical systems can lead to contractor dependency and reduced bargaining power for the government over time. It may stifle competition and innovation within the broader defense industrial base. Long-term strategic planning should ideally involve fostering competition or developing alternative support options to mitigate risks associated with single-provider reliance.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $311,781,621

Exercised Options: $297,189,507

Current Obligation: $262,020,392

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline