DoD's $111.9M MQ-9 Reaper contract awarded to General Atomics for aircraft manufacturing

Contract Overview

Contract Amount: $111,903,072 ($111.9M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-03-21

End Date: 2022-04-30

Contract Duration: 1,136 days

Daily Burn Rate: $98.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NETHERLANDS MQ-9

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $111.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: NETHERLANDS MQ-9 Key points: 1. Value for money assessed against comparable defense procurements. 2. Competition dynamics indicate a sole-source award, potentially impacting price. 3. Risk indicators include reliance on a single supplier for critical assets. 4. Performance context is tied to ongoing MQ-9 Reaper operational needs. 5. Sector positioning places this within the broader defense aviation manufacturing landscape.

Value Assessment

Rating: fair

The contract value of $111.9 million for MQ-9 Reaper aircraft manufacturing appears within a reasonable range for complex defense systems. However, without specific details on the number of units or configurations procured, a precise value-for-money assessment is challenging. Benchmarking against similar sole-source awards for unmanned aerial vehicles (UAVs) suggests that pricing is often higher due to limited competition. Further analysis of the contractor's historical pricing and profit margins would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or intellectual property essential for the product. The lack of competition means that price discovery through market forces was limited, potentially leading to higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. The government's ability to negotiate the best possible price is diminished in sole-source situations.

Public Impact

Benefits the U.S. Air Force by providing critical intelligence, surveillance, and reconnaissance (ISR) capabilities. Delivers advanced unmanned aerial vehicles essential for modern military operations. Geographic impact is global, supporting deployed forces in various theaters. Workforce implications include supporting high-skilled manufacturing jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Potential for cost overruns in sole-source procurements.
Dependence on a single supplier for critical defense assets.

Positive Signals

Contractor is a recognized leader in UAV technology.
MQ-9 Reaper is a proven and vital platform for military operations.
Award supports continued development and fielding of advanced ISR capabilities.

Sector Analysis

The defense aviation manufacturing sector is characterized by high barriers to entry, significant R&D investment, and long production cycles. Contracts for advanced platforms like the MQ-9 Reaper represent a substantial portion of spending in this niche. General Atomics is a dominant player in the unmanned aerial systems market. Comparable spending benchmarks would involve other major defense contractors producing similar ISR or combat-capable UAVs, where sole-source or limited competition awards are not uncommon due to specialized technology.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contract is with a large defense contractor, and opportunities for small businesses would likely be through subcontracts awarded by General Atomics. The impact on the small business ecosystem is therefore indirect, depending on the prime contractor's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are typically embedded in the contract terms, including performance metrics and delivery schedules. Transparency is often limited for sole-source defense contracts due to national security considerations. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

MQ-1 Predator
RQ-11 Raven
Global Hawk
Reaper Sustainment Programs
Unmanned Aerial Vehicle Procurement

Risk Flags

Sole-source award
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $111.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. NETHERLANDS MQ-9

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 $111.9 million.

What is the period of performance?

Start: 2019-03-21. End: 2022-04-30.

What is General Atomics Aeronautical Systems, Inc.'s track record with the Department of Defense, particularly concerning MQ-9 Reaper contracts?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a long and established track record with the Department of Defense (DoD) as a primary developer and manufacturer of unmanned aerial systems (UAS), most notably the MQ-9 Reaper. They have been instrumental in the platform's evolution from its inception. Their history includes numerous contracts for the production, modification, and sustainment of the MQ-9 fleet for various branches of the U.S. military, as well as for allied nations. GA-ASI has consistently delivered these complex systems, contributing significantly to the DoD's intelligence, surveillance, and reconnaissance (ISR) capabilities. While generally successful in delivering the platforms, like any major defense contractor, they have faced scrutiny regarding contract modifications, pricing, and delivery timelines on occasion. However, their position as a sole-source provider for the core MQ-9 airframe underscores their critical role and extensive experience in this specific domain.

How does the $111.9 million contract value compare to other recent procurements of similar unmanned aerial vehicles?

Comparing the $111.9 million contract value for the MQ-9 Reaper requires context regarding the quantity and specific configuration of aircraft procured. However, based on publicly available data for similar advanced unmanned aerial vehicles (UAVs), this figure appears to be within a typical range for acquiring multiple platforms, especially considering the sophisticated ISR and strike capabilities of the Reaper. For instance, other large UAV programs, whether sole-source or competed, often involve contract values in the tens to hundreds of millions of dollars for significant quantities. The MQ-9 is a high-end system, and its unit cost, when factoring in development, advanced sensors, and support, is substantial. Without precise unit counts or detailed specifications for this particular award, a direct per-unit cost comparison is difficult, but the overall contract value aligns with the procurement of a fleet-worthy asset in the defense sector.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a contract of this magnitude on a sole-source basis are multifaceted. Firstly, the lack of competition significantly reduces the government's leverage in price negotiation, potentially leading to higher costs for taxpayers than if multiple vendors had bid. This can result in less value for money. Secondly, sole-source awards can foster complacency in the contractor, as there is less market pressure to innovate or improve efficiency. This dependence on a single supplier also creates a strategic risk; if the contractor experiences production issues, financial instability, or decides to exit the market, the government could face significant disruptions in acquiring or sustaining critical assets. Furthermore, it can stifle competition and innovation within the broader industry by limiting opportunities for other capable firms to enter or expand their market share.

How effective is the MQ-9 Reaper platform in fulfilling its intended mission of intelligence, surveillance, and reconnaissance?

The MQ-9 Reaper platform has proven to be highly effective in fulfilling its intended mission of intelligence, surveillance, and reconnaissance (ISR), as well as providing persistent strike capabilities. It has been a cornerstone of U.S. military operations for over a decade, operating in diverse and challenging environments worldwide. Its ability to loiter for extended periods (often over 20 hours) at high altitudes allows for continuous monitoring of vast areas, providing crucial real-time data to ground forces and command centers. The platform's suite of sensors, including electro-optical/infrared (EO/IR) cameras, synthetic aperture radar (SAR), and signals intelligence (SIGINT) payloads, enables comprehensive data collection. Its success is evidenced by its widespread deployment and continued demand from various military branches and allied nations. While newer platforms are emerging, the Reaper's combination of endurance, payload capacity, and operational flexibility continues to make it a vital asset for ISR and counter-terrorism operations.

What has been the historical spending trend for MQ-9 Reaper aircraft and related services by the Department of Defense?

Historical spending by the Department of Defense (DoD) on the MQ-9 Reaper program, including aircraft procurement, modifications, and sustainment, has been substantial and generally increasing over the past decade. As the platform matured and its operational utility became more apparent, the DoD consistently allocated significant funding to expand the fleet, upgrade existing aircraft with new sensors and capabilities, and ensure operational readiness through sustainment contracts. This trend reflects the platform's critical role in ISR and strike missions across various combatant commands. While specific annual figures fluctuate based on program phases (e.g., initial fielding vs. full-rate production vs. sustainment), the overall trajectory indicates a sustained investment in the MQ-9 system. This consistent spending underscores the platform's perceived value and its integration into the core operational concepts of the U.S. Air Force and other services.

What are the implications of this contract for the future development and competition in the unmanned aerial vehicle market?

This sole-source award for the MQ-9 Reaper has mixed implications for the future development and competition in the unmanned aerial vehicle (UAV) market. On one hand, it reinforces General Atomics' dominant position and ensures continued investment in the Reaper platform, potentially leading to further technological advancements for that specific system. However, by awarding this contract without competition, the DoD misses an opportunity to stimulate broader market competition and potentially foster innovation from emerging players or existing competitors in other segments of the UAV market. This could slow the pace of disruptive innovation or the adoption of alternative technologies. While the DoD does procure other UAVs through competitive means, major sole-source awards for established platforms like the Reaper can inadvertently create a less dynamic competitive landscape for high-end, long-endurance UAVs in the long term.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $111,903,072

Exercised Options: $111,903,072

Current Obligation: $111,903,072

Subaward Activity

Number of Subawards: 50

Total Subaward Amount: $11,977,016

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: FA862015G4040

IDV Type: BOA

Timeline