DoD Awards $7.78M Follow-On Contract for Aircraft Manufacturing to General Atomics

Contract Overview

Contract Amount: $7,778,899 ($7.8M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-09

End Date: 2027-09-08

Contract Duration: 729 days

Daily Burn Rate: $10.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PLEO RETROFIT PH IV FOLLOW-ON

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $7.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: PLEO RETROFIT PH IV FOLLOW-ON Key points: 1. The contract is a follow-on to a previous award, suggesting ongoing needs for these aircraft manufacturing services. 2. General Atomics Aeronautical Systems, Inc. is the sole awardee, indicating a lack of broader competition for this specific task. 3. The Cost Plus Fixed Fee contract type carries inherent risk of cost overruns if not managed closely. 4. The primary sector impacted is Defense, specifically aircraft manufacturing, with a focus on the Air Force.

Value Assessment

Rating: fair

The contract value of $7.78M is moderate. Without specific benchmarks for similar follow-on aircraft manufacturing tasks, it's difficult to definitively assess pricing. The Cost Plus Fixed Fee structure requires careful monitoring to ensure value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs compared to a competitive environment. The rationale for sole-source should be clearly documented.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competition.

Public Impact

Impacts the Department of the Air Force's operational capabilities and readiness. Supports jobs within the aerospace manufacturing sector, specifically in California. Ensures continued availability of specialized aircraft, potentially for intelligence, surveillance, and reconnaissance missions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Lack of transparency in the procurement process.

Positive Signals

Follow-on nature suggests successful prior performance.
Contract supports critical defense capabilities.
Awardee is a known entity in the aerospace industry.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical component of the Defense industry. Spending in this area is often driven by national security requirements and technological advancements, with significant investment typically seen in R&D and production of advanced aerial systems.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. The prime contractor, General Atomics Aeronautical Systems, Inc., is a large aerospace company, suggesting this award is not directly benefiting small businesses.

Oversight & Accountability

Oversight will be crucial given the sole-source and Cost Plus Fixed Fee nature of this contract. The Department of the Air Force must ensure robust monitoring of costs, performance, and adherence to contract terms to safeguard taxpayer funds.

Related Government Programs

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

Risk Flags

Sole-source procurement.
Cost Plus Fixed Fee contract type.
Potential for cost overruns.
Lack of competitive pricing.
Limited transparency in award justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. PLEO RETROFIT PH IV FOLLOW-ON

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 $7.8 million.

What is the period of performance?

Start: 2025-09-09. End: 2027-09-08.

What is the specific justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing without competition?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without competition, the government must rely on detailed cost analysis, historical pricing, and market research to ensure the price is fair and reasonable. This often involves extensive negotiation and review by contracting officers and cost specialists.

What are the key performance indicators (KPIs) for this follow-on contract, and how will performance be measured to ensure effectiveness and value for money?

Key performance indicators would likely include on-time delivery of aircraft components or services, adherence to quality standards, and meeting technical specifications. Effectiveness will be measured by the successful integration and operational readiness of the aircraft. Value for money will be assessed by comparing actual costs against the fixed fee and ensuring the delivered product meets the Air Force's mission requirements.

What is the potential for cost escalation under the Cost Plus Fixed Fee structure, and what controls are in place to mitigate this risk?

The primary risk with Cost Plus Fixed Fee is that the contractor may not be incentivized to control costs rigorously, as the fee is fixed regardless of the actual costs incurred. Mitigation strategies include detailed cost audits, establishing realistic base costs, negotiating a reasonable fixed fee, and implementing strict change order controls. The government must actively monitor expenditures and contractor performance.

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: $22,398,016

Exercised Options: $22,398,016

Current Obligation: $7,778,899

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