DoD Awards $89.5M for MQ-9 Reaper Hardware Procurement to General Atomics

Contract Overview

Contract Amount: $89,509,772 ($89.5M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-29

End Date: 2026-12-31

Contract Duration: 1,007 days

Daily Burn Rate: $88.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: MQ-9 AGILE REAPER ENTERPRISE SOLUTION (ARES) IDIQ FRANCE HARDWARE AIRCRAFT PROCUREMENT

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $89.5 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ-9 AGILE REAPER ENTERPRISE SOLUTION (ARES) IDIQ FRANCE HARDWARE AIRCRAFT PROCUREMENT 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. Long-term contract (2026) indicates ongoing reliance on this platform. 4. Focus on aircraft manufacturing within the Defense sector.

Value Assessment

Rating: questionable

The contract value of $89.5 million for aircraft procurement appears substantial. Without specific unit details or historical pricing for similar MQ-9 components, a direct comparison is difficult. However, the lack of competition suggests potential for overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to General Atomics Aeronautical Systems, Inc. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The absence of competition in this sole-source award means taxpayers may not be receiving the best possible price for this critical defense hardware.

Public Impact

Enhances US Air Force's intelligence, surveillance, and reconnaissance capabilities. Supports ongoing military operations and strategic defense initiatives. Potential for job creation in the aerospace manufacturing sector. Ensures continued availability of a key unmanned aerial system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Lack of transparency in pricing due to no-bid contract.
Potential for vendor lock-in with specialized hardware.

Positive Signals

Acquisition of critical defense technology.
Supports long-term strategic defense goals.
Ensures operational readiness of MQ-9 fleet.

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending benchmarks for similar sole-source drone procurements are difficult to ascertain without more data, but large sole-source awards often warrant scrutiny.

Small Business Impact

The data indicates this is a sole-source award to a large prime contractor, General Atomics. There is no explicit information on subcontracting opportunities for small businesses within this specific award, which is common for sole-source contracts.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure fair pricing and contract performance. Transparency in the justification for the sole-source award is crucial for accountability.

Related Government Programs

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

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency
Long-term vendor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.5 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ-9 AGILE REAPER ENTERPRISE SOLUTION (ARES) IDIQ FRANCE HARDWARE AIRCRAFT PROCUREMENT

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 $89.5 million.

What is the period of performance?

Start: 2024-03-29. End: 2026-12-31.

What is the justification for awarding this contract as sole-source, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one vendor can meet requirements. The Department of Defense should have conducted a price analysis based on historical data, cost breakdowns, or other available benchmarks to ensure the price is fair and reasonable, despite the lack of competition.

How does the unit cost of the MQ-9 Reaper hardware in this contract compare to previous procurements or similar systems?

Without specific unit cost breakdowns or access to historical pricing data for the MQ-9 Reaper hardware, a direct comparison is challenging. However, given the sole-source nature, it is imperative that the contracting agency rigorously analyzed pricing against any available benchmarks or previous contract awards to identify potential deviations or escalations.

What are the long-term implications of relying on a sole-source provider for critical MQ-9 Reaper components for the Air Force's operational readiness?

Long-term reliance on a sole-source provider can create vendor lock-in and reduce negotiating leverage for future contracts. This could potentially impact the Air Force's ability to adapt to new technologies or secure competitive pricing, potentially affecting overall operational readiness and modernization efforts if alternatives are not explored.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $89,509,772

Exercised Options: $89,509,772

Current Obligation: $89,509,772

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $5,202,298

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA868920D2020

IDV Type: IDC

Timeline