DoD Awards $93.6M for MQ-9 Reaper Production to General Atomics, Lacking Competition

Contract Overview

Contract Amount: $93,563,757 ($93.6M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-18

End Date: 2026-10-30

Contract Duration: 1,138 days

Daily Burn Rate: $82.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: MQ-9 REAPER FMS NETHERLANDS - LOT 2 PRODUCTION

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $93.6 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ-9 REAPER FMS NETHERLANDS - LOT 2 PRODUCTION Key points: 1. Significant contract value of $93.6 million for advanced drone production. 2. Sole-source award to General Atomics Aeronautical Systems, Inc. raises competition concerns. 3. Risk associated with single-source procurement and potential for inflated costs. 4. Spending falls within the Aircraft Manufacturing sector, dominated by large defense contractors.

Value Assessment

Rating: questionable

The contract value of $93.6 million for MQ-9 Reaper production is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar advanced drone systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Atomics Aeronautical Systems, Inc., was considered. This lack of competition limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The absence of competition may result in taxpayers paying more than necessary for these critical defense assets.

Public Impact

Taxpayers may be overpaying for advanced military drones due to a lack of competitive bidding. The reliance on a single supplier for MQ-9 Reaper production could create supply chain vulnerabilities. This award highlights potential areas for improved procurement strategies within the Department of Defense.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competition
Potential for cost overruns

Positive Signals

Acquisition of critical defense technology
Award to established manufacturer

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically for unmanned aerial vehicles. Spending in this sector is often characterized by high R&D costs and a limited number of specialized, large-scale producers.

Small Business Impact

The contract was awarded to General Atomics Aeronautical Systems, Inc., a large defense contractor. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for large, specialized defense procurements.

Oversight & Accountability

The Department of the Air Force awarded this contract. Oversight will be crucial to ensure the contractor meets delivery schedules and quality standards, especially given the sole-source nature of the award.

Related Government Programs

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

Risk Flags

Sole-source award limits price competition.
Potential for cost overruns without competitive pressure.
Lack of transparency in pricing justification.
Dependency on a single supplier for critical defense asset.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $93.6 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ-9 REAPER FMS NETHERLANDS - LOT 2 PRODUCTION

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 $93.6 million.

What is the period of performance?

Start: 2023-09-18. End: 2026-10-30.

What is the historical cost performance of General Atomics Aeronautical Systems, Inc. on similar sole-source contracts for MQ-9 Reaper production?

Analyzing historical data for General Atomics' sole-source contracts on the MQ-9 Reaper program is essential. This would involve reviewing past contract awards, cost breakdowns, and any documented cost overruns or savings. Understanding their track record can provide insights into whether the current $93.6 million award is in line with previous pricing or if there's a potential for inflated costs due to the lack of competition.

What steps are being taken to ensure fair pricing and value for taxpayers given this sole-source award?

Given the sole-source nature of this award, robust oversight mechanisms are critical. The Department of Defense should employ stringent cost analysis techniques, potentially involving independent cost estimators, to validate General Atomics' pricing. Furthermore, exploring options for future competition or negotiating more favorable terms in subsequent contracts will be vital to ensure long-term value for taxpayers.

Are there any alternative or emerging technologies that could offer comparable capabilities to the MQ-9 Reaper at a potentially lower cost through competitive development?

The Department of Defense should continuously monitor the market for emerging unmanned aerial vehicle technologies. Investing in research and development for next-generation systems, and fostering competition among various manufacturers, could lead to more cost-effective solutions in the future. This proactive approach can mitigate the risks associated with relying on a single platform and supplier for extended periods.

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: $93,563,757

Exercised Options: $93,563,757

Current Obligation: $93,563,757

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $8,615,680

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