DoD's $39M MQ-9 Reaper contract awarded to General Atomics, highlighting aircraft manufacturing capabilities

Contract Overview

Contract Amount: $39,034,069 ($39.0M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-06-10

End Date: 2026-08-31

Contract Duration: 1,178 days

Daily Burn Rate: $33.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MQ-9 REAPER PROLIFERATED LOW EARTH ORBIT (PLEO)

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $39.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ-9 REAPER PROLIFERATED LOW EARTH ORBIT (PLEO) Key points: 1. Contract awarded for MQ-9 Reaper drones, a key asset in intelligence, surveillance, and reconnaissance. 2. Sole-source award to General Atomics, the primary manufacturer of the MQ-9 platform. 3. Contract duration extends to August 2026, indicating a long-term need for these assets. 4. Focus on aircraft manufacturing suggests continued investment in drone technology. 5. The contract value is significant, reflecting the high cost of advanced military hardware. 6. Potential for follow-on work or upgrades given the strategic importance of the MQ-9.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging due to its sole-source nature and the specialized nature of the MQ-9 Reaper. However, the cost-plus-fixed-fee structure allows for some oversight of contractor expenses. Without competitive bids, it's difficult to definitively assess if the pricing represents the best value for taxpayers. Further analysis would require comparing the per-unit cost of the MQ-9 to other similar ISR platforms or previous acquisitions of the same system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to General Atomics Aeronautical Systems, Inc. As the original equipment manufacturer and sole developer of the MQ-9 Reaper, competition was not feasible for this specific acquisition. This limits the opportunity for price discovery through a bidding process, potentially leading to higher costs than a competitively sourced contract.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from a competitive bidding environment.

Public Impact

The U.S. Air Force benefits from the acquisition of advanced MQ-9 Reaper drones. These drones provide critical intelligence, surveillance, and reconnaissance capabilities. The contract supports the continued operation and modernization of a key military asset. Workforce implications are likely within the aerospace manufacturing sector, particularly at General Atomics facilities in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost-plus-fixed-fee contracts can incentivize higher costs if not closely monitored.
Reliance on a single supplier for critical defense assets poses supply chain risks.

Positive Signals

Award to incumbent, experienced manufacturer ensures platform familiarity and expertise.
MQ-9 Reaper is a proven and vital asset for national security operations.
Long-term contract provides stability for production and sustainment.

Sector Analysis

The MQ-9 Reaper falls within the broader aerospace and defense sector, specifically focusing on unmanned aerial systems (UAS) for intelligence, surveillance, and reconnaissance (ISR). This sector is characterized by high R&D investment, long product development cycles, and significant government procurement. The market for advanced UAS is growing, with increasing demand for capabilities like those offered by the MQ-9. Comparable spending benchmarks would involve looking at other large UAS procurements or sustainment contracts within the DoD.

Small Business Impact

This contract does not appear to involve a small business set-aside. Given the sole-source nature and the specialized manufacturing requirements for the MQ-9 Reaper, it is unlikely that small businesses would be primary contractors. However, General Atomics may engage small businesses as subcontractors for specific components or services, contributing to the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Air Force's contracting and program management offices. The cost-plus-fixed-fee structure necessitates close monitoring of the contractor's incurred costs to ensure reasonableness and allowability. Transparency may be limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal DoD review and potentially Inspector General oversight if specific concerns arise.

Related Government Programs

MQ-1 Predator
RQ-11 Raven
RQ-4 Global Hawk
Unmanned Aerial Systems Procurement
Intelligence, Surveillance, and Reconnaissance (ISR) Platforms

Risk Flags

Sole-source award limits competition.
Cost-plus-fixed-fee contract requires robust oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ-9 REAPER PROLIFERATED LOW EARTH ORBIT (PLEO)

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 $39.0 million.

What is the period of performance?

Start: 2023-06-10. End: 2026-08-31.

What is the historical spending trend for the MQ-9 Reaper program with General Atomics Aeronautical Systems, Inc.?

Historical spending data for the MQ-9 Reaper program with General Atomics Aeronautical Systems, Inc. indicates a consistent and significant investment by the Department of Defense over many years. The program has evolved from initial development and testing phases to full-rate production and sustainment. Annual spending has fluctuated based on procurement quantities, upgrade packages, and operational support requirements. While specific year-over-year figures require detailed contract database analysis, the overall trend shows a sustained commitment to this platform, reflecting its perceived value in ISR missions. The current $39 million award represents a portion of this ongoing lifecycle investment, likely for specific delivery orders or sustainment activities within a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a series of sole-source awards.

How does the cost-plus-fixed-fee (CPFF) contract type typically impact pricing and risk for this type of acquisition?

The Cost-Plus-Fixed-Fee (CPFF) contract type, used here for the MQ-9 Reaper delivery order, means the contractor (General Atomics) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there's a high degree of uncertainty, as can be the case with advanced aircraft manufacturing and sustainment. For the government, the primary risk is that costs could exceed initial estimates, although the fixed fee provides some predictability in profit. The contractor bears less cost risk than in fixed-price contracts but has an incentive to control costs to maximize efficiency within the fee structure. Effective oversight by the Air Force is crucial to ensure costs are reasonable and allocable, preventing potential cost overruns and ensuring value for taxpayer money.

What are the key performance metrics or deliverables expected under this specific contract?

Under this specific delivery order for the MQ-9 Reaper, key performance metrics and deliverables would likely revolve around the timely and quality production or modification of specific aircraft airframes, associated support equipment, and potentially training or sustainment services. While the exact details are proprietary, typical deliverables for such contracts include fully mission-capable MQ-9 aircraft meeting stringent technical specifications, adherence to delivery schedules, and provision of necessary documentation (e.g., technical manuals, maintenance logs). Performance might also be assessed based on reliability rates, system availability, and the successful integration of any specified upgrades or modifications. The Air Force would monitor adherence to these requirements through regular progress reports, inspections, and acceptance testing.

Given the sole-source nature, what mechanisms are in place to ensure fair pricing and prevent contractor overreach?

Despite the sole-source award, several mechanisms aim to ensure fair pricing and prevent contractor overreach. The contracting officer is responsible for performing a price analysis, even without competition, by comparing the proposed price to historical prices paid for similar items, published price lists (if applicable), or independent government cost estimates. For CPFF contracts, rigorous auditing of the contractor's incurred costs is essential to verify that only reasonable, allocable, and allowable expenses are reimbursed. Contract clauses may also include incentives for cost savings or penalties for performance failures. Furthermore, the Defense Contract Audit Agency (DCAA) often plays a role in auditing contractor costs, providing an independent assessment to the contracting officer.

What is the strategic significance of the MQ-9 Reaper platform for the Department of Defense, and how does this contract support that strategy?

The MQ-9 Reaper is a highly significant platform for the Department of Defense, serving as a primary asset for persistent intelligence, surveillance, and reconnaissance (ISR) missions, as well as for providing close air support and offensive strike capabilities. Its ability to loiter over areas of interest for extended periods, equipped with advanced sensors and munitions, makes it invaluable in both conventional warfare and counter-terrorism operations. This contract, awarded to General Atomics, the original designer and manufacturer, directly supports the DoD's strategy by ensuring the continued availability, sustainment, and potential modernization of this critical capability. It underpins the Air Force's ability to maintain air superiority and gather vital intelligence, thereby contributing directly to national security objectives and operational effectiveness in theaters worldwide.

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: 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: $39,034,069

Exercised Options: $39,034,069

Current Obligation: $39,034,069

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $2,994,331

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