DoD's $23.5M MQ-1B Deployment Contract with General Atomics Raises Oversight Questions

Contract Overview

Contract Amount: $23,489,976 ($23.5M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-04-20

End Date: 2018-04-21

Contract Duration: 366 days

Daily Burn Rate: $64.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF ACAT III BIG SAFARI GOCO 4&5 MQ-1B DEPLOYMENT

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $23.5 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: IGF::CT::IGF ACAT III BIG SAFARI GOCO 4&5 MQ-1B DEPLOYMENT Key points: 1. Significant spending on drone deployment services. 2. Sole-source award to General Atomics Aeronautical Systems, Inc. 3. Potential for cost overruns given Cost Plus Fixed Fee contract type. 4. Limited transparency on the necessity of a sole-source award.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, raises concerns about potential cost inefficiencies. Benchmarking is difficult without comparable sole-source contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, limiting price discovery and potentially leading to higher costs for taxpayers. The justification for not competing this requirement is unclear.

Taxpayer Impact: The lack of competition and potentially inflated costs directly impact taxpayer value for this significant defense expenditure.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The use of sole-source contracts can stifle innovation and reduce market competition. Lack of transparency hinders public understanding of defense spending decisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of transparency on justification
No small business participation noted

Positive Signals

Supports critical MQ-1B drone deployment
Contract awarded to a known defense contractor

Sector Analysis

This contract falls under 'All Other Support Services' within the defense sector. Benchmarks for similar sole-source drone deployment services are difficult to ascertain due to the nature of the award.

Small Business Impact

The data indicates no small business participation in this contract. Further analysis would be needed to determine if opportunities were overlooked or if the nature of the work precluded SMB involvement.

Oversight & Accountability

The sole-source nature of this award warrants closer oversight to ensure the government received fair value and that competition was appropriately considered. Transparency regarding the justification for the sole-source award is crucial.

Related Government Programs

All Other Support Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award lacks competition
Cost-plus contract type risks overruns
Lack of transparency on justification
No small business participation
Potential for inefficient pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.5 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. IGF::CT::IGF ACAT III BIG SAFARI GOCO 4&5 MQ-1B DEPLOYMENT

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 $23.5 million.

What is the period of performance?

Start: 2017-04-20. End: 2018-04-21.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services. Agencies must document this justification thoroughly. Without this documentation, it's impossible to assess if competitive strategies were adequately explored or if this was the only viable option.

How does the Cost Plus Fixed Fee (CPFF) structure impact cost control and potential overruns for drone deployment services?

CPFF contracts shift some of the financial risk to the government. While the fixed fee provides the contractor with a guaranteed profit, the government bears the cost of actual expenses incurred. This structure can incentivize contractors to incur higher costs, potentially leading to overruns, especially if oversight and cost controls are not robust. It necessitates diligent monitoring by the agency.

What is the long-term strategic value and cost-effectiveness of relying on General Atomics for MQ-1B deployment services?

The long-term value depends on the continued operational relevance of the MQ-1B and the specific services provided. Relying on a single provider, especially through sole-source awards, can limit strategic flexibility and potentially increase long-term costs if market prices decrease or better alternatives emerge. Assessing cost-effectiveness requires comparing performance, reliability, and total ownership costs against potential alternatives and future needs.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Other Support Services › All Other Support Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Atomics

Address: 14200 KIRKHAM WAY, POWAY, CA, 92064

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,430,300

Exercised Options: $27,430,300

Current Obligation: $23,489,976

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $3,427,925

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3021

IDV Type: BOA

Timeline