DoD's $30M MQ-9 Reaper Logistics Support Contract for Italy Awarded to General Atomics

Contract Overview

Contract Amount: $30,121,381 ($30.1M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-01-27

End Date: 2023-10-20

Contract Duration: 1,727 days

Daily Burn Rate: $17.4K/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 (CLS) PHASE VI (ITALY)

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.1 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ-9 REAPER CONTRACTOR LOGISTICS SUPPORT (CLS) PHASE VI (ITALY) Key points: 1. General Atomics, the sole manufacturer of the MQ-9, secured this contract, indicating limited competition. 2. The contract covers logistics support for the MQ-9 Reaper in Italy, a critical asset for intelligence, surveillance, and reconnaissance. 3. The cost-plus-fixed-fee structure may lead to cost overruns if not managed carefully. 4. This spending falls within the broader defense sector's focus on advanced aerial platforms and their sustainment.

Value Assessment

Rating: fair

The contract's value of $30.1 million over nearly four years appears reasonable for specialized logistics support of a high-value asset like the MQ-9. However, without detailed cost breakdowns, a precise value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, likely due to General Atomics' sole-source position as the manufacturer of the MQ-9 Reaper. This lack of competition limits price discovery and potentially increases costs for the government.

Taxpayer Impact: Taxpayers bear the cost of this sole-source contract, with potential for higher prices due to the absence of competitive bidding.

Public Impact

Ensures continued operational readiness of vital MQ-9 Reaper aircraft for U.S. and allied forces in Italy. Supports intelligence, surveillance, and reconnaissance (ISR) capabilities crucial for national security. Maintains critical infrastructure and personnel for advanced drone operations abroad. Potential for cost overruns due to the cost-plus-fixed-fee contract type.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Cost-plus-fixed-fee contract type carries inherent risk of cost overruns.
Lack of small business participation noted.

Positive Signals

Supports critical national security asset (MQ-9 Reaper).
Ensures operational capability in a key strategic location (Italy).
Contract awarded to the original equipment manufacturer, ensuring specialized knowledge.

Sector Analysis

This contract falls under defense logistics and support services for unmanned aerial vehicles (UAVs). Spending benchmarks for similar specialized support contracts can vary widely based on the platform's complexity and operational tempo.

Small Business Impact

The data indicates no small business participation in this contract. Given the specialized nature of MQ-9 logistics, opportunities for small businesses may be limited to subcontracting roles, which are not detailed here.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential cost creep. Robust performance metrics and regular audits are essential for accountability.

Related Government Programs

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

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of small business participation
Potential for cost overruns
Limited transparency on specific support tasks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.1 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ-9 REAPER CONTRACTOR LOGISTICS SUPPORT (CLS) PHASE VI (ITALY)

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 $30.1 million.

What is the period of performance?

Start: 2019-01-27. End: 2023-10-20.

What specific maintenance and support tasks are included in this $30M contract, and how do they align with the MQ-9's operational requirements in Italy?

The contract covers contractor logistics support (CLS) Phase VI for the MQ-9 Reaper in Italy. This typically includes services such as organizational and intermediate level maintenance, repair and overhaul, supply support, and potentially training and technical support. The specific tasks are crucial for ensuring the continuous operational readiness of the MQ-9 fleet stationed in Italy, which is vital for its intelligence, surveillance, and reconnaissance missions in the region.

Given the sole-source nature of the award, what mechanisms are in place to ensure the government is receiving fair and reasonable pricing for these logistics services?

While sole-source awards inherently limit price competition, the government typically employs mechanisms like detailed cost analysis, negotiation with the contractor based on historical data and industry benchmarks, and rigorous oversight of incurred costs. For cost-plus-fixed-fee contracts, the fixed fee is negotiated, and the government scrutinizes allowable costs to prevent overcharging. Regular audits and performance reviews are also critical to ensure value.

How does the performance of this logistics support contract impact the overall effectiveness and readiness of the MQ-9 program for the Air Force?

Effective logistics support is paramount to the operational effectiveness and readiness of the MQ-9 program. This contract ensures that the aircraft receive timely and specialized maintenance, repair, and supply chain management, minimizing downtime and maximizing availability for critical ISR missions. Any deficiencies in this support could directly lead to reduced operational tempo, mission failures, and decreased readiness of this key strategic asset.

Industry Classification

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

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

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: $30,121,381

Exercised Options: $30,121,381

Current Obligation: $30,121,381

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $4,790,745

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline