DoD Awards $585M for MQ-9 Reaper Logistics Support to General Atomics

Contract Overview

Contract Amount: $584,786,924 ($584.8M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-01-01

End Date: 2026-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $320.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MQ-9 REAPER CONTRACTOR LOGISTICS SUPPORT AND SERVICES

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $584.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ-9 REAPER CONTRACTOR LOGISTICS SUPPORT AND SERVICES Key points: 1. Significant contract value highlights the importance of MQ-9 Reaper sustainment. 2. Sole-source award raises questions about competition and potential cost efficiencies. 3. Long-term contract (5 years) indicates a sustained need for these services. 4. Focus on logistics and services suggests potential for contractor lock-in.

Value Assessment

Rating: fair

The contract value of $584.8 million over five years averages approximately $117 million annually. Without specific benchmarks for similar complex drone logistics, a direct comparison is difficult, but the scale suggests a substantial investment.

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 limits price discovery and may result in higher costs compared to a competitive environment.

Taxpayer Impact: Taxpayer funds are being allocated without the benefit of competitive bidding, potentially leading to less favorable pricing.

Public Impact

Ensures continued operational readiness of the MQ-9 Reaper, a key intelligence, surveillance, and reconnaissance (ISR) platform. Supports critical military operations and national security objectives. Impacts the defense industrial base, particularly in unmanned aerial systems (UAS) manufacturing and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Sole-source award

Positive Signals

Ensures critical platform support
Long-term sustainment plan

Sector Analysis

The defense sector, particularly in unmanned aerial systems (UAS), is experiencing significant growth. This contract aligns with broader trends in military modernization and reliance on advanced ISR capabilities.

Small Business Impact

There is no indication of small business participation in this sole-source contract. Opportunities for small businesses may be limited unless subcontracting is mandated or occurs organically.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and effective service delivery. Robust performance metrics and regular reviews are crucial.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition.
Cost-plus contract type can incentivize higher spending.
Long duration may reduce flexibility.
Lack of transparency on pricing justification.
Potential for contractor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $584.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ-9 REAPER CONTRACTOR LOGISTICS SUPPORT AND SERVICES

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $584.8 million.

What is the period of performance?

Start: 2022-01-01. End: 2026-12-31.

What is the justification for the sole-source award, and what steps are being taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities or proprietary technology held by the contractor. To ensure fair pricing, the government should conduct thorough cost and price analyses, potentially using historical data or independent cost estimates. Regular audits and performance reviews are also essential to monitor expenditures and service quality.

What are the potential risks associated with a long-term, sole-source contract for critical system support?

Long-term, sole-source contracts carry risks of contractor complacency, escalating costs due to lack of competition, and potential vendor lock-in. The government may become overly reliant on a single provider, making it difficult to switch or negotiate favorable terms. This can also stifle innovation if the contractor faces no pressure to improve services or reduce costs.

How does this contract contribute to the overall effectiveness and readiness of the MQ-9 Reaper program?

This contract is vital for maintaining the operational readiness and effectiveness of the MQ-9 Reaper fleet. By providing essential logistics support and services, it ensures that these critical ISR assets are available, maintained, and capable of performing their missions. This directly supports national security objectives and military operational tempo.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA857721R0002

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: $875,590,268

Exercised Options: $590,221,891

Current Obligation: $584,786,924

Actual Outlays: $3,518,029

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline