DoD awards $116M for Ground Control Station production, raising value-for-money questions

Contract Overview

Contract Amount: $116,347,707 ($116.3M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-12-08

End Date: 2020-09-27

Contract Duration: 1,024 days

Daily Burn Rate: $113.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF - BLOCK 30 GROUND CONTROL STATION FY17 PRODUCTION CONTRACT:

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $116.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: IGF::OT::IGF - BLOCK 30 GROUND CONTROL STATION FY17 PRODUCTION CONTRACT: Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for aircraft manufacturing, specifically for ground control stations. 3. Performance period spans nearly three years, indicating a significant production run. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller firms. 6. The award was made by the Defense Contract Management Agency. 7. The primary contractor has a history of large defense contracts. 8. Geographic location of performance is California.

Value Assessment

Rating: questionable

Benchmarking the value-for-money for this specific contract is challenging without detailed cost breakdowns or comparisons to similar ground control station procurements. The firm fixed-price nature offers cost certainty but doesn't inherently guarantee the best price. Further analysis would require understanding the technical specifications and the market for such specialized equipment. Given the significant dollar amount, a thorough review of the pricing structure against industry standards and historical data for similar systems is warranted to ensure taxpayer funds are used efficiently.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the specific number of bidders is not provided, this method generally fosters price discovery and encourages competitive pricing. The agency likely sought to maximize competition to obtain the best value. The absence of specific details on bidder numbers or the evaluation process makes a definitive assessment of the competition's effectiveness difficult.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to drive down prices through multiple offers. However, the ultimate benefit depends on the number and quality of bids received and the agency's evaluation process.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive critical ground control station equipment for its aircraft. The services delivered include the production and delivery of specialized aircraft manufacturing components. The geographic impact is concentrated in California, where the contractor is located and likely where manufacturing will occur. Workforce implications include potential job creation or retention within the aerospace manufacturing sector in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count for full and open competition makes it hard to gauge true competitive pressure.
No small business set-aside noted, which could limit opportunities for smaller, innovative firms in this sector.
Limited insight into the specific technical requirements and how they might have influenced competition.
Firm Fixed Price contracts can sometimes lead to contractor complacency if not managed tightly.
The duration of the contract (over 3 years) requires sustained oversight to ensure performance.

Positive Signals

Awarded through full and open competition, theoretically maximizing the pool of potential bidders.
Firm Fixed Price contract structure shifts cost risk to the contractor, providing budget certainty.
The contract is for a critical component (ground control stations) for defense operations.
The contractor is an established entity in the aerospace industry.
The contract award follows a structured procurement process within the Department of Defense.

Sector Analysis

This contract falls within the Aircraft Manufacturing subsector (NAICS 336411), a significant part of the broader aerospace and defense industry. This sector is characterized by high barriers to entry, complex supply chains, and substantial R&D investment. Spending in this area is often driven by defense modernization programs and technological advancements. Comparable spending benchmarks would typically involve other large-scale production contracts for military aircraft components or systems, where prices can range from millions to billions of dollars depending on complexity and quantity.

Small Business Impact

This contract did not include a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses. This means the primary contract was competed without a specific preference for small business participation. While large defense contracts can sometimes have indirect benefits for small businesses through the supply chain, the direct impact of this award on the small business ecosystem is likely minimal unless the prime contractor actively seeks out small business subcontractors. Further investigation into subcontracting plans would be needed for a complete picture.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract implies that the government's primary oversight focus will be on delivery schedules, quality standards, and adherence to contract terms, rather than detailed cost monitoring. Transparency is generally maintained through contract award databases and reporting requirements, but specific details on ongoing oversight activities are not publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Unmanned Aerial Vehicle (UAV) Production Contracts
Defense Aircraft Component Manufacturing
Military Command and Control Systems Procurement
Aerospace Manufacturing Contracts
Department of Defense Major Weapon System Acquisition

Risk Flags

Potential for cost overruns despite FFP contract
Limited transparency on specific bidder numbers
No explicit small business subcontracting goals identified
Need for detailed value-for-money assessment
Long performance period requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $116.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. IGF::OT::IGF - BLOCK 30 GROUND CONTROL STATION FY17 PRODUCTION CONTRACT:

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 $116.3 million.

What is the period of performance?

Start: 2017-12-08. End: 2020-09-27.

What is the track record of General Atomics Aeronautical Systems, Inc. with similar ground control station contracts?

General Atomics Aeronautical Systems, Inc. (GA-ASI) is a well-established prime contractor in the defense aerospace sector, particularly known for its development and production of unmanned aerial systems (UAS), such as the Predator and Reaper. Their experience with ground control stations (GCS) is extensive, as GCS are integral to the operation of these UAS platforms. GA-ASI has a history of delivering GCS systems that meet stringent military requirements. While specific contract values for GCS alone are often bundled within larger platform contracts, their consistent role as a prime contractor for advanced UAS implies a robust capability and a significant track record in developing, producing, and supporting associated ground control infrastructure. This includes managing complex integration, software development, and ensuring operational reliability for critical defense missions.

How does the $116 million award compare to other recent procurements for similar ground control systems?

Direct comparisons for 'ground control station production contracts' at this specific value are difficult without more granular data on the system's capabilities and the number of units procured. However, the $116 million figure for a production contract over approximately three years suggests a significant, potentially complex system. Similar procurements in the defense sector for specialized command and control or avionics systems can range widely. For instance, contracts for advanced radar systems, electronic warfare suites, or integrated avionics for fighter jets or bombers can easily reach hundreds of millions or even billions. Ground control stations, while critical, might be less complex than full aircraft systems, making this award appear substantial. Benchmarking would ideally involve comparing it to other GCS contracts for different platforms (e.g., manned aircraft, naval systems) or similar unmanned systems, considering factors like technological sophistication, software integration, and lifecycle support.

What are the primary risks associated with this firm fixed-price contract for ground control station production?

The primary risk with a Firm Fixed Price (FFP) contract, especially for a complex item like a ground control station, lies in potential cost overruns for the contractor and the subsequent impact on delivery or quality. If the contractor underestimates production costs, encounters unforeseen technical challenges, or experiences supply chain disruptions, they may face financial losses. This could lead to pressure to cut corners on quality, delays in delivery, or even contractor default, although the latter is less common with established primes. For the government, the risk is paying a premium if the initial price was set high to cover contractor contingencies. Effective oversight by the Defense Contract Management Agency (DCMA) is crucial to monitor performance, ensure quality standards are met, and identify any potential issues early to mitigate these risks.

What does the 'Aircraft Manufacturing' NAICS code (336411) imply about the nature of this contract?

The North American Industry Classification System (NAICS) code 336411, 'Aircraft Manufacturing,' indicates that this contract is for the production of components or systems directly related to aircraft. In this specific case, it pertains to 'Ground Control Stations,' which are essential for operating certain types of aircraft, particularly unmanned aerial systems (UAS). This code signifies that the work involves the manufacturing processes, assembly, and integration of hardware and potentially software that form the GCS. It places the contract within a highly specialized and regulated segment of the defense industrial base, requiring adherence to stringent quality standards, manufacturing tolerances, and potentially cybersecurity protocols common in the aerospace industry. The code suggests the contractor is involved in the physical production and assembly of these critical systems.

Given the $116 million value, what are the likely historical spending patterns for ground control stations within the DoD?

Historical spending patterns for ground control stations (GCS) within the DoD are often embedded within larger platform acquisition programs, particularly for unmanned aerial systems (UAS). Major UAS programs like the Global Hawk, Predator, or Reaper involve substantial investments not only in the aircraft themselves but also in their associated GCS, training systems, and logistical support. Annual spending on GCS can fluctuate significantly based on program maturity, production rates, and modernization efforts. While specific aggregate figures for GCS alone are not readily available, the DoD's overall investment in UAS and related C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) capabilities runs into the tens of billions of dollars over the past decade. This $116 million contract represents a significant, but not unprecedented, single award within this broader spending context, likely supporting a specific fleet's operational needs or a new system development.

What is the significance of the contract being awarded in California?

The contract being performed in California (SN: CALIFORNIA) is significant because California is a major hub for the aerospace and defense industry in the United States. Many leading defense contractors, including General Atomics Aeronautical Systems, Inc., have substantial operations, research and development facilities, and manufacturing plants within the state. This concentration of industry provides access to a skilled workforce, specialized suppliers, and a robust ecosystem of related businesses. Awards to California-based companies often reflect the state's established role in defense manufacturing and innovation. It also implies that a portion of the $116 million contract value will likely be spent within California, contributing to the state's economy through employment, supply chain expenditures, and tax revenues.

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: $117,039,107

Exercised Options: $117,039,107

Current Obligation: $116,347,707

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