DoD's $1.57B R&D contract for advanced systems awarded to General Atomics Aeronautical Systems

Contract Overview

Contract Amount: $15,730,000 ($15.7M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-07-10

End Date: 2026-09-03

Contract Duration: 1,151 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: EXCALIBUR

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $15.7 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: EXCALIBUR Key points: 1. Contract value represents significant investment in advanced research and development. 2. Competition dynamics suggest a robust bidding process for this critical technology. 3. Performance risk indicators need close monitoring due to the R&D nature of the work. 4. This contract aligns with broader defense modernization efforts. 5. The sector positioning indicates a focus on cutting-edge aerospace and defense technologies. 6. Contract type suggests a focus on managing costs while achieving specific research objectives.

Value Assessment

Rating: good

Benchmarking this contract's value against similar large-scale R&D efforts in advanced aerospace systems is challenging due to the specialized nature of the work. However, the $1.57 billion award over approximately three years indicates a substantial investment. The Cost Plus Fixed Fee (CPFF) structure aims to control costs while incentivizing the contractor to meet defined research goals. Without specific performance metrics or comparable contract data, a precise value-for-money assessment is difficult, but the scale suggests a high perceived need for the research outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bids suggests a competitive environment, though the specific details of the bidding process and the number of interested parties are not fully detailed. A competitive process for R&D contracts of this magnitude is generally favorable for price discovery and innovation.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for advanced research, potentially leading to more cost-effective development of critical defense technologies.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the U.S. Air Force, seeking advancements in aerospace technology. The services delivered involve cutting-edge research and development in physical, engineering, and life sciences. The geographic impact is primarily centered around the contractor's facilities in California, but the technological advancements could have national security implications. Workforce implications include potential job creation and skill development within the aerospace R&D sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPFF contract type can lead to cost overruns if not managed diligently.
The long duration of the contract (over 3 years) increases the potential for scope creep or evolving technological requirements.
The specialized nature of R&D makes it difficult to benchmark performance and cost effectively.

Positive Signals

Awarded under full and open competition, suggesting a fair and broad solicitation process.
The contractor, General Atomics Aeronautical Systems, Inc., has a significant track record in aerospace and defense.
The contract aims to advance critical defense capabilities, aligning with national security objectives.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced physical, engineering, and life sciences. The aerospace and defense industry is characterized by high R&D investment, long development cycles, and significant government procurement. Comparable spending benchmarks in this sub-sector are often in the hundreds of millions to billions of dollars for major platform development or advanced technology research programs.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While General Atomics Aeronautical Systems, Inc. is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on the prime contractor's strategy and the specific needs of the R&D project.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable to the contract. Transparency will be maintained through regular reporting requirements from the contractor and potential audits. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Advanced Aircraft Research
Unmanned Aerial Systems Development
Aerospace Engineering Services
Defense Research and Development Programs
Advanced Technology Development Contracts

Risk Flags

Cost Overrun Potential
Technological Obsolescence Risk
Scope Creep Risk
Dependency on Key Personnel
Integration Challenges with Existing Systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.7 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. EXCALIBUR

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 $15.7 million.

What is the period of performance?

Start: 2023-07-10. End: 2026-09-03.

What is General Atomics Aeronautical Systems, Inc.'s track record with large DoD R&D contracts?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a well-established track record in the defense sector, particularly in the development and production of unmanned aerial systems (UAS) and related technologies. They are known for programs like the Predator and Reaper drones. Their experience with complex R&D projects, including those involving advanced avionics, sensor integration, and airframe design, positions them as a capable contractor for significant research endeavors. Past performance on similar large-scale, high-risk R&D contracts would be a key factor in their selection for this $1.57 billion award, suggesting a history of successful, albeit often challenging, project execution within the DoD.

How does the $1.57 billion value compare to typical R&D spending in this NAICS code (541715)?

The NAICS code 541715 covers Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology). Spending within this broad category can vary immensely. However, a single contract award of $1.57 billion for R&D is substantial, even within the defense sector. While many R&D contracts are smaller, large-scale, multi-year programs, especially those involving complex systems development for agencies like the Department of Defense, frequently reach these figures. This award represents a significant portion of the Air Force's investment in advanced physical and engineering sciences for a specific technological advancement, likely related to next-generation aerospace capabilities.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, especially for R&D, revolve around cost control and contractor incentive. While the fixed fee provides the contractor with a defined profit margin, the 'cost plus' element means the government reimburses allowable costs. If R&D efforts prove more complex or expensive than initially anticipated, costs can escalate significantly, potentially exceeding initial budget projections. The contractor has less financial incentive to control costs compared to fixed-price contracts, as their fee is fixed regardless of the final cost. Effective government oversight is crucial to scrutinize costs, ensure efficiency, and prevent scope creep that could inflate expenses without commensurate technical progress.

How might this contract impact the broader aerospace R&D ecosystem?

This substantial contract awarded to General Atomics Aeronautical Systems, Inc. is likely to stimulate innovation and investment within the aerospace R&D ecosystem. It signals continued government commitment to advancing cutting-edge technologies in areas such as autonomous systems, advanced materials, or propulsion. The award could lead to increased demand for specialized engineering talent, advanced manufacturing capabilities, and research partnerships with universities or other R&D firms. Furthermore, the technological breakthroughs achieved under this contract could have spillover effects, potentially leading to commercial applications or influencing future defense procurement strategies, thereby shaping the direction of research and development priorities across the sector.

What does the 'DEFINITIVE CONTRACT' designation imply for this award?

The designation 'DEFINITIVE CONTRACT' indicates that this is a standard, fully funded contract with all terms and conditions specified. Unlike basic ordering agreements or other indefinite-delivery vehicles, a definitive contract represents a firm commitment by the government to purchase specified goods or services under defined terms and pricing. For a large R&D award like this ($1.57 billion), it signifies that the scope, schedule, and cost structure have been finalized and agreed upon by both parties. This provides a stable framework for the contractor to execute the research and development activities over the contract's duration.

Given the 'Research and Development' nature, how is performance typically measured and success determined?

Performance measurement for R&D contracts, especially those under a CPFF structure, often focuses on achieving specific technical milestones, deliverables, and research objectives rather than purely on cost or schedule adherence in the traditional sense. Success is determined by the contractor's ability to demonstrate progress towards defined research goals, successful testing of prototypes or concepts, and the generation of new knowledge or capabilities as outlined in the contract's Statement of Work (SOW). Key Performance Indicators (KPIs) might include the successful demonstration of a technology's feasibility, the development of functional prototypes, the completion of required analyses, and the timely submission of technical reports. The government's technical team plays a crucial role in evaluating progress against these R&D-specific metrics.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA875020S7015

Offers Received: 2

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: $15,857,029

Exercised Options: $15,857,029

Current Obligation: $15,730,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline