DoD's $313M MQ-9 Reaper CLS Contract for UK Faces Limited Competition Concerns
Contract Overview
Contract Amount: $312,772,687 ($312.8M)
Contractor: General Atomics Aeronautical Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-07-01
End Date: 2026-03-31
Contract Duration: 2,465 days
Daily Burn Rate: $126.9K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MQ-9 REAPER CONTRACTOR LOGISTICS SUPPORT (CLS) 2019-2023 FMS UNITED KINGDOM
Place of Performance
Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064
Plain-Language Summary
Department of Defense obligated $312.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ-9 REAPER CONTRACTOR LOGISTICS SUPPORT (CLS) 2019-2023 FMS UNITED KINGDOM Key points: 1. The contract, valued at $312.77M, supports the MQ-9 Reaper program for the UK. 2. General Atomics Aeronautical Systems, Inc. is the sole awardee, raising competition questions. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. Logistics support for advanced defense systems is a critical but often concentrated sector.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, while common for complex systems, offers less incentive for cost control compared to fixed-price contracts. Benchmarking is difficult without specific cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited source award. This lack of competition may prevent the government from securing the best possible pricing.
Taxpayer Impact: Limited competition can lead to higher costs for taxpayers, as the government may not benefit from competitive pricing pressures.
Public Impact
Ensures continued operational readiness of vital MQ-9 Reaper aircraft for a key ally. Supports advanced drone technology and associated maintenance, training, and logistics. Potential for increased costs due to limited competitive bidding. Impacts the UK's defense capabilities and interoperability with US forces.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Cost Plus Fixed Fee contract type
- Lack of transparency in pricing
Positive Signals
- Supports critical defense capabilities for an allied nation
- Ensures operational readiness of advanced aircraft
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on logistics and support for unmanned aerial vehicles. Benchmarks for similar large-scale, sole-source logistics contracts are often difficult to establish due to unique program requirements.
Small Business Impact
The awardee is General Atomics Aeronautical Systems, Inc., a large defense contractor. There is no indication of small business participation in this specific contract award.
Oversight & Accountability
The Department of the Air Force awarded this contract. Oversight will be crucial to manage costs under the Cost Plus Fixed Fee structure and ensure effective delivery of logistics support.
Related Government Programs
- Process, Physical Distribution, and Logistics Consulting Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns due to CPFF structure
- Lack of competitive bidding may lead to inflated prices
- Dependence on a single contractor for critical support
- Limited transparency in cost allocation
Tags
process-physical-distribution-and-logist, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $312.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ-9 REAPER CONTRACTOR LOGISTICS SUPPORT (CLS) 2019-2023 FMS UNITED KINGDOM
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 $312.8 million.
What is the period of performance?
Start: 2019-07-01. End: 2026-03-31.
What is the justification for awarding this contract on a limited/sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for limited competition needs to be thoroughly documented, likely citing unique capabilities or existing infrastructure. To ensure fair pricing, the government should conduct robust cost realism analyses and potentially negotiate performance incentives within the Cost Plus Fixed Fee structure.
How will the Cost Plus Fixed Fee structure be managed to prevent cost overruns and ensure value for taxpayer money?
Effective management of a CPFF contract requires stringent oversight, detailed cost tracking, and regular audits. The Air Force must establish clear performance metrics and potentially implement incentive clauses tied to cost savings or efficiency improvements to mitigate overrun risks.
What is the long-term strategy for competition in MQ-9 Reaper sustainment and logistics support?
The long-term strategy should explore opportunities to introduce competition for future contract phases or specific support elements. This could involve breaking down the support into smaller, more competitive packages or encouraging the development of alternative sustainment providers.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
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: $349,646,742
Exercised Options: $321,424,718
Current Obligation: $312,772,687
Subaward Activity
Number of Subawards: 36
Total Subaward Amount: $23,189,893
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-07-01
Current End Date: 2026-03-31
Potential End Date: 2026-03-31 00:00:00
Last Modified: 2025-12-01
More Contracts from General Atomics Aeronautical Systems, Inc.
- Requirement IS for the Procurement of Performance Based Logistics Support Services for the MQ-1C Gray Eagle Unmanned Aircraft System — $1.9B (Department of Defense)
- Award of Undefinitized Contract Action (UCA) for FY 12 MQ-1C Gray Eagle Program of Record and Quick Reaction Capability Performance-Based Logistics Product Support — $1.1B (Department of Defense)
- FY 13 Full Rate Production of the Gray Eagle Unmanned Aircraft System and FY 12 Backfill Requirements — $1.1B (Department of Defense)
- FY17 Gray Eagle Performance Based Logistics (PBL) Effort — $936.9M (Department of Defense)
- Federal Contract — $646.6M (Department of Defense)
View all General Atomics Aeronautical Systems, Inc. federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)