DoD Awards $107.8M for MQ-9 Reaper Drones to General Atomics, Raising Exportability Concerns
Contract Overview
Contract Amount: $10,778,870 ($10.8M)
Contractor: General Atomics Aeronautical Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2024-02-22
End Date: 2025-08-29
Contract Duration: 554 days
Daily Burn Rate: $19.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: MQ-9 REAPER TAIWAN MQ-9A BLOCK 1 EXPORTABILITY
Place of Performance
Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064
Plain-Language Summary
Department of Defense obligated $10.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ-9 REAPER TAIWAN MQ-9A BLOCK 1 EXPORTABILITY Key points: 1. The contract is for MQ-9 Reaper drones, a significant military asset. 2. General Atomics is the sole provider, raising competition concerns. 3. The exportability aspect of this deal warrants scrutiny. 4. The sector is Aircraft Manufacturing, a high-value industry.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar drone procurements is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to General Atomics. This lack of competition limits price discovery and potentially increases costs for taxpayers.
Taxpayer Impact: The absence of competition may result in higher prices than could be achieved through a competitive bidding process, impacting taxpayer funds.
Public Impact
Potential for increased geopolitical tensions due to drone export. Impact on domestic defense industrial base if production is prioritized for export. Questions about the long-term strategic value and maintenance costs of these drones.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Exportability concerns
- Cost-plus contract type
Positive Signals
- Acquisition of advanced drone technology
Sector Analysis
The Aircraft Manufacturing sector is characterized by high R&D costs and complex supply chains. Defense spending in this area is critical for national security but requires careful oversight to ensure value for money.
Small Business Impact
This contract does not appear to involve small businesses directly, as it is a sole-source award to a large prime contractor. Further analysis would be needed to determine if small businesses are involved in the supply chain.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure fair pricing and adherence to contract terms. Transparency regarding the export justification is also crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Geopolitical implications of export
- Technology proliferation risk
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $10.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ-9 REAPER TAIWAN MQ-9A BLOCK 1 EXPORTABILITY
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 $10.8 million.
What is the period of performance?
Start: 2024-02-22. End: 2025-08-29.
What is the specific justification for the sole-source award of MQ-9 Reapers, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. To ensure fair pricing, the DoD should conduct a thorough cost analysis, potentially using historical data from previous contracts or independent cost estimates. Regular audits and performance reviews are also essential to monitor expenditures and prevent cost overruns.
What are the potential risks associated with exporting MQ-9 Reaper drones, particularly concerning their use and potential proliferation?
Exporting advanced military drones like the MQ-9 Reaper carries risks of misuse, unauthorized proliferation, and potential escalation of regional conflicts. There's also a risk that sensitive technology could fall into the wrong hands, compromising national security. Robust end-user agreements and strict monitoring are crucial to mitigate these risks.
How does the Cost Plus Fixed Fee contract structure impact the overall value and effectiveness of this drone procurement?
A Cost Plus Fixed Fee (CPFF) contract can incentivize contractors to control costs to maximize their fixed fee. However, it also places the burden of cost overruns on the government if not carefully managed. The effectiveness hinges on strong government oversight to ensure the contractor remains efficient and delivers the required capabilities within reasonable cost parameters.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
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: $10,778,870
Exercised Options: $10,778,870
Current Obligation: $10,778,870
Actual Outlays: $495,698
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $525,091
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
Start Date: 2024-02-22
Current End Date: 2025-08-29
Potential End Date: 2025-08-29 00:00:00
Last Modified: 2025-12-18
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