DoD Awards $465.7M for MQ-9B Drones to General Atomics for Taiwan
Contract Overview
Contract Amount: $465,669,577 ($465.7M)
Contractor: General Atomics Aeronautical Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-04-28
End Date: 2028-03-31
Contract Duration: 1,799 days
Daily Burn Rate: $258.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: MQ-9B PRODUCTION FMS TAIWAN
Place of Performance
Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064
Plain-Language Summary
Department of Defense obligated $465.7 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ-9B PRODUCTION FMS TAIWAN Key points: 1. Significant foreign military sale (FMS) for advanced drone technology. 2. Sole-source award to General Atomics Aeronautical Systems, Inc. raises competition concerns. 3. Long-term contract duration (5 years) suggests sustained demand. 4. High value contract for a critical defense asset.
Value Assessment
Rating: fair
The contract value of $465.7M is substantial. Without comparable FMS contracts for the MQ-9B, a direct pricing assessment is difficult. However, the fixed-price incentive structure aims to control costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating no other vendor was considered. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: Taxpayer funds are being used for a foreign military sale, impacting the overall defense budget and potentially reducing funds available for domestic priorities.
Public Impact
Enhances Taiwan's defense capabilities against potential threats. Strengthens US-Taiwan security cooperation. Supports advanced US defense technology exports. Potential for technology transfer and industrial base implications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Lack of transparency in pricing.
- Potential for cost overruns with incentive contract.
- Geopolitical risks associated with Taiwan.
Positive Signals
- Provides critical defense capabilities to an ally.
- Supports US aerospace industry.
- Long-term contract ensures program stability.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for unmanned aerial vehicles (UAVs). Defense spending on advanced drone technology is a growing trend globally.
Small Business Impact
The prime contractor, General Atomics Aeronautical Systems, Inc., is a large business. There is no indication of small business participation in this specific contract award.
Oversight & Accountability
The Department of the Air Force is the contracting activity. Oversight will be crucial to ensure performance, cost control, and adherence to FMS requirements.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Lack of competition
- Foreign military sale complexities
- Long contract duration
- Geopolitical instability
Tags
aircraft-manufacturing, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $465.7 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ-9B PRODUCTION FMS TAIWAN
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 $465.7 million.
What is the period of performance?
Start: 2023-04-28. End: 2028-03-31.
What is the projected cost per unit for the MQ-9B drones under this contract, and how does it compare to similar systems?
The contract does not explicitly break down the cost per unit. Given the fixed-price incentive structure and the total award amount of $465.7M over 1799 days, a precise per-unit cost is not readily available. Further analysis would be needed to benchmark this against other UAV procurements, considering variations in capabilities and configurations.
What are the specific risks associated with a sole-source award for such a critical defense system, particularly in a foreign military sale context?
A sole-source award eliminates competitive pressure, potentially leading to inflated prices and reduced innovation. For an FMS, it also means less leverage in negotiating terms and conditions, and potential concerns about long-term sustainment and parts availability if the sole provider faces issues. This can increase the overall financial and strategic risk for both the US and Taiwan.
How effective is the fixed-price incentive contract structure in ensuring value for money and controlling costs for this MQ-9B production FMS?
The fixed-price incentive (FPI) contract aims to balance cost control with performance incentives. It sets a target cost and target profit, with a ceiling price. If costs are below target, both parties share savings; if above, they share the overrun up to the ceiling. This structure incentivizes the contractor to manage costs effectively while allowing for shared risk and reward.
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: $465,669,578
Exercised Options: $465,669,578
Current Obligation: $465,669,577
Subaward Activity
Number of Subawards: 69
Total Subaward Amount: $20,326,734
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-04-28
Current End Date: 2028-03-31
Potential End Date: 2028-03-31 00:00:00
Last Modified: 2026-01-12
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