DoD Awards $227M for MQ-9B SkyGuardian Drones to General Atomics

Contract Overview

Contract Amount: $227,194,875 ($227.2M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-08-14

End Date: 2026-04-01

Contract Duration: 2,056 days

Daily Burn Rate: $110.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: BELGIUM MQ-9B SKYGUARDIAN

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $227.2 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: BELGIUM MQ-9B SKYGUARDIAN Key points: 1. Significant investment in advanced drone technology for the Air Force. 2. Sole-source award to General Atomics raises questions about competition. 3. Fixed Price Incentive contract type introduces potential cost overruns. 4. Long contract duration (2026) suggests a strategic, long-term acquisition.

Value Assessment

Rating: fair

The contract value of $227M for 1 MQ-9B drone appears high, especially given the fixed-price incentive structure which can lead to cost growth. Benchmarking against similar advanced drone acquisitions is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This is a sole-source award, meaning competition was not sought. This limits price discovery and potentially leads to higher costs for taxpayers. The justification for sole-source should be scrutinized.

Taxpayer Impact: The lack of competition for this significant contract may result in taxpayers paying a premium for the MQ-9B SkyGuardian system.

Public Impact

Enhances Air Force intelligence, surveillance, and reconnaissance (ISR) capabilities. Potential for increased operational reach and persistent monitoring. Represents a significant technological advancement in unmanned aerial systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Fixed Price Incentive contract risks cost overruns.
Lack of small business participation noted.
Long contract duration.

Positive Signals

Acquisition of advanced ISR technology.
Potential for enhanced national security capabilities.

Sector Analysis

The acquisition falls within the Aircraft Manufacturing sector. Defense spending on unmanned aerial systems (UAS) has been steadily increasing, with significant investments in ISR platforms like the MQ-9 series.

Small Business Impact

The data indicates no specific set-aside for small businesses in this contract. Given the sole-source nature and the prime contractor's size, opportunities for small businesses may be limited to subcontracting roles.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and justification. The Air Force should provide clear reporting on performance and cost control measures throughout the contract's life.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award.
Fixed Price Incentive contract.
No small business set-aside.
Long contract duration.
High unit cost potential.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $227.2 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. BELGIUM MQ-9B SKYGUARDIAN

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 $227.2 million.

What is the period of performance?

Start: 2020-08-14. End: 2026-04-01.

What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the best possible price was negotiated?

The justification for a sole-source award typically involves unique capabilities or proprietary technology that only one contractor can provide. The Department of Defense should have conducted market research and negotiation strategies to achieve the most favorable terms, despite the lack of direct competition. Transparency regarding this justification is crucial for public trust.

How will the Fixed Price Incentive (FPI) contract structure be managed to mitigate the risk of cost overruns for this $227 million acquisition?

Managing an FPI contract involves establishing clear target costs, incentive fees, and ceiling prices. The Air Force must implement robust Earned Value Management (EVM) systems and regular performance reviews to monitor progress, identify deviations early, and ensure the contractor remains accountable for cost control. Close collaboration and proactive risk management are essential.

What are the projected operational benefits and return on investment for the MQ-9B SkyGuardian system, considering its significant acquisition cost?

The MQ-9B SkyGuardian is expected to provide enhanced Intelligence, Surveillance, and Reconnaissance (ISR) capabilities, offering persistent surveillance over extended periods and greater operational flexibility. The return on investment will be measured by its contribution to mission success, reduced risk to personnel compared to manned aircraft, and potential cost savings over the system's lifecycle through efficient operations.

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: FIXED PRICE INCENTIVE (L)

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: $227,194,875

Exercised Options: $227,194,875

Current Obligation: $227,194,875

Subaward Activity

Number of Subawards: 62

Total Subaward Amount: $55,807,917

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline