DoD awards $32.36M for aircraft manufacturing, with General Atomics as the sole awardee

Contract Overview

Contract Amount: $32,362,032 ($32.4M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-27

End Date: 2021-09-30

Contract Duration: 1,099 days

Daily Burn Rate: $29.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF FY18 BLOCK 30 GCS

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $32.4 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: IGF FY18 BLOCK 30 GCS Key points: 1. The contract value represents a significant investment in specialized aircraft manufacturing capabilities. 2. Competition dynamics are limited, as this was a sole-source award, potentially impacting price negotiation. 3. Risk indicators include the long performance period and the specialized nature of the aircraft, requiring specific expertise. 4. Performance context suggests a need for advanced aircraft for defense operations. 5. This contract falls within the Defense sector, specifically focusing on aircraft manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specialized nature and sole-source award. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess value for money. The firm-fixed-price structure provides some cost certainty, but the lack of competition raises questions about whether the government secured the most competitive pricing possible.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Atomics Aeronautical Systems, Inc., was considered. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the cost savings that typically arise from a competitive bidding environment. This could result in a higher overall expenditure for the required aircraft manufacturing services.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive advanced aircraft manufacturing services. The services delivered are critical for national defense capabilities, likely involving the production or modification of specialized aircraft. The geographic impact is primarily centered around the contractor's facilities in California, where the manufacturing will likely take place. Workforce implications include the potential for skilled labor employment in the aerospace and manufacturing sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Long contract duration (1099 days) increases exposure to potential cost overruns or performance issues.
Specialized nature of aircraft manufacturing requires unique expertise, potentially limiting contractor options in the future.

Positive Signals

General Atomics is a known entity in defense aviation, suggesting a degree of established capability.
Firm-fixed-price contract provides cost certainty for the government, assuming the scope is well-defined.
The contract is for aircraft manufacturing, a critical component of national defense infrastructure.

Sector Analysis

The aircraft manufacturing sector is a critical component of the broader aerospace and defense industry. This contract falls within the manufacturing of aircraft, a segment characterized by high technological barriers to entry and significant government procurement. The market is dominated by a few large prime contractors, with specialized sub-sectors like unmanned aerial systems (UAS) seeing significant growth. Comparable spending benchmarks would typically involve other large-scale aircraft production or modification contracts within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the award to a large prime contractor like General Atomics suggests that small businesses are unlikely to be directly involved as the primary awardee. However, General Atomics may engage small businesses as subcontractors, which would be a positive development for the small business ecosystem, provided such subcontracting opportunities are substantial and meaningful.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm-fixed-price nature of the contract provides a degree of accountability for the contractor to deliver within the agreed-upon price. Transparency is facilitated through contract databases, but detailed cost breakdowns and performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

DoD Aircraft Procurement
Defense Manufacturing Contracts
Aerospace Industry Support
General Atomics Aeronautical Systems Contracts

Risk Flags

Sole-source award may lead to higher costs.
Long contract duration increases risk exposure.
Specialized nature of product requires specific expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.4 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. IGF FY18 BLOCK 30 GCS

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 $32.4 million.

What is the period of performance?

Start: 2018-09-27. End: 2021-09-30.

What is the track record of General Atomics Aeronautical Systems, Inc. with the Department of Defense for similar aircraft manufacturing contracts?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a well-established track record with the Department of Defense, particularly in the development and production of unmanned aerial systems (UAS) and related technologies. They are known for platforms like the Predator and Reaper drones. Their history with the DoD includes numerous contracts for aircraft manufacturing, modification, and sustainment. While this specific contract is for aircraft manufacturing, GA-ASI's extensive experience in this domain suggests a high level of technical capability and familiarity with DoD requirements. Analyzing their past performance on similar large-scale manufacturing awards would provide further insight into their reliability and efficiency in delivering complex defense assets.

How does the awarded amount of $32.36 million compare to other aircraft manufacturing contracts awarded by the DoD in recent fiscal years?

The awarded amount of $32.36 million for this aircraft manufacturing contract is a moderate-sized award within the context of the Department of Defense's overall procurement budget. The DoD frequently awards contracts for aircraft that range from tens of millions to billions of dollars, depending on the type of aircraft, quantity, and complexity. For instance, contracts for fighter jets, bombers, or large transport aircraft typically far exceed this amount. However, for specialized aircraft, modifications, or specific components, $32.36 million can represent a significant investment. To provide a precise comparison, one would need to analyze contracts for similar types of aircraft (e.g., unmanned systems, training aircraft, or specific mission-configured platforms) awarded within the same or adjacent fiscal years.

What are the primary risks associated with a sole-source award for aircraft manufacturing, and how are they mitigated?

The primary risk associated with a sole-source award for aircraft manufacturing is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the contractor may have less incentive to offer the most cost-effective solution. Other risks include a potential reduction in innovation and a dependency on a single supplier, which can create vulnerabilities in the supply chain or future development. Mitigation strategies often involve robust negotiation by the contracting officers, detailed cost analyses, and potentially incorporating performance-based incentives within the contract. For sole-source awards, agencies are typically required to justify the lack of competition, often citing unique capabilities, urgent needs, or the unavailability of alternatives. Continuous monitoring of performance and costs throughout the contract lifecycle is also crucial.

What is the expected program effectiveness or outcome of this aircraft manufacturing contract for the Department of Defense?

The expected program effectiveness of this aircraft manufacturing contract hinges on the specific role the manufactured aircraft will play within the Department of Defense's operational framework. Given the award to General Atomics Aeronautical Systems, Inc., it is highly probable that the contract pertains to the production or enhancement of unmanned aerial systems (UAS) or specialized surveillance/strike platforms. The outcome is expected to be the delivery of advanced aerial assets that enhance intelligence, surveillance, reconnaissance (ISR), and potentially strike capabilities. Effective deployment of these aircraft should contribute to improved situational awareness, reduced risk to personnel in hazardous environments, and increased operational flexibility for military commanders. The ultimate measure of effectiveness will be the aircraft's performance in meeting mission requirements and its contribution to achieving strategic defense objectives.

How has historical spending by the Department of Defense on aircraft manufacturing, particularly with General Atomics, trended over the past five years?

Historical spending by the Department of Defense on aircraft manufacturing, especially with key contractors like General Atomics Aeronautical Systems, Inc. (GA-ASI), has generally shown an increasing trend, particularly in the domain of unmanned aerial systems (UAS). GA-ASI has consistently secured significant contract awards for its UAS platforms, reflecting the DoD's growing reliance on these capabilities for ISR and combat missions. While specific figures fluctuate year-to-year based on program needs and budget allocations, the overall investment in advanced aircraft manufacturing, including both manned and unmanned systems, has been substantial. Analyzing GA-ASI's contract history would reveal a pattern of sustained funding for their product lines, indicating a long-term strategic commitment by the DoD to the technologies they provide. This trend suggests that future spending in this area is likely to remain robust.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,678,977

Exercised Options: $32,678,977

Current Obligation: $32,362,032

Actual Outlays: $4,586,951

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $4,439,883

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862015G4040

IDV Type: BOA

Timeline