DoD's $94M Longshot UAV contract awarded to General Atomics for R&D, raising questions on value and competition

Contract Overview

Contract Amount: $94,291,379 ($94.3M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-06-30

End Date: 2026-07-31

Contract Duration: 1,127 days

Daily Burn Rate: $83.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LONGSHOT UNMANNED AIR VEHICLE - PHASE III

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $94.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: LONGSHOT UNMANNED AIR VEHICLE - PHASE III Key points: 1. Contract value of $94.3M for research and development of an unmanned air vehicle. 2. Awarded to General Atomics Aeronautical Systems, Inc., a significant player in the defense sector. 3. Competition was 'Full and Open After Exclusion of Sources,' suggesting a potentially limited bidding process. 4. Contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. Performance period spans over three years, indicating a substantial R&D effort. 6. The contract is for a definitive contract, suggesting a clear scope of work. 7. The North American Industry Classification System (NAICS) code 541715 points to R&D in physical, engineering, and life sciences.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee (CPFF) contract structure for a research and development project introduces inherent cost uncertainty. While General Atomics is a known entity in this space, the lack of detailed cost breakdowns or comparisons to similar R&D efforts makes a definitive value assessment challenging. The fixed fee component provides some cost control, but the 'cost' portion remains variable. Benchmarking this specific R&D effort against other UAV development contracts is difficult without more granular data on deliverables and technological advancements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the initial solicitation might have been open, specific sources were later excluded, or the exclusion was a condition of the initial broad solicitation. This procurement method suggests that the number of capable bidders may have been limited, potentially impacting the level of price discovery and competitive pressure. Further details on the exclusion rationale would be needed for a complete understanding.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the lowest possible price achievable through a wider, more competitive bidding process. This could translate to a higher overall cost for the research and development effort.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Advanced Research Projects Agency (DARPA), which will receive advanced unmanned air vehicle technology. The services delivered include research and development, aiming to advance capabilities in unmanned aerial systems. The geographic impact is primarily within the United States, where the R&D will be conducted and potentially where the technology will be deployed. Workforce implications may include specialized engineering and technical roles within General Atomics and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure can incentivize cost escalation if not rigorously monitored.
Limited competition raises concerns about achieving the best possible value for taxpayer funds.
The 'exclusion of sources' aspect of the competition needs further clarification to ensure fairness and broad market engagement.
The specific technological advancements and their ultimate utility require ongoing assessment to justify the investment.

Positive Signals

Award to a known and experienced contractor, General Atomics, suggests a degree of reliability in execution.
The contract is for a definitive contract, implying a defined scope for the R&D effort.
DARPA's involvement indicates a focus on cutting-edge technological development with potential strategic importance.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on Unmanned Aerial Vehicle (UAV) research and development. The market for UAVs is rapidly expanding, driven by both military and commercial applications. Spending in this area is significant, with numerous government contracts awarded for R&D, procurement, and sustainment of various UAV platforms. General Atomics is a major player in this market, known for its Predator and Reaper series of drones.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). Therefore, there are no direct implications for small business set-asides. However, the prime contractor, General Atomics, may engage small businesses as subcontractors. The extent of subcontracting to small businesses will depend on the company's procurement policies and the specific needs of the R&D project. Without specific subcontracting plans, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Advanced Research Projects Agency (DARPA) contracting officers and program managers. As a Cost Plus Fixed Fee contract, rigorous financial oversight will be crucial to monitor incurred costs against the fixed fee. Transparency will depend on DARPA's reporting practices and any public disclosures made regarding the project's progress and outcomes. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Unmanned Aerial Systems (UAS) Research and Development
Advanced Aerial Vehicle Programs
Defense Research and Engineering Contracts
Aerospace Technology Development

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Limited competition ('Exclusion of Sources') may impact value for money.
Proprietary technology or specialized capabilities may limit bidder pool.
R&D contracts are subject to technical feasibility and performance risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $94.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. LONGSHOT UNMANNED AIR VEHICLE - PHASE III

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 (Defense Advanced Research Projects Agency).

What is the total obligated amount?

The obligated amount is $94.3 million.

What is the period of performance?

Start: 2023-06-30. End: 2026-07-31.

What is the specific technological innovation or capability the Longshot UAV is intended to achieve?

The 'Longshot' program, managed by DARPA, aims to develop a long-range, air-launched, and optionally recoverable unmanned aerial vehicle. The key objective is to enable a future capability for manned-unmanned teaming where a manned aircraft can launch and recover a UAV at significant distances, extending the range and payload capacity of the manned platform. This technology is intended to provide flexible, persistent, and lethal capabilities without risking manned aircraft in high-threat environments. The specific technological advancements focus on autonomous control, long-duration flight, and the complex mechanics of air-launch and recovery.

How does the $94.3 million contract value compare to similar R&D efforts for advanced UAVs?

Benchmarking the $94.3 million contract value for the Longshot UAV is challenging without specific details on the phase of R&D and the technological maturity. However, advanced UAV R&D contracts can range from tens of millions to hundreds of millions of dollars, depending on complexity, duration, and the specific capabilities being developed. DARPA projects, in particular, often involve high-risk, high-reward research pushing technological boundaries. Compared to programs focused on incremental upgrades, this contract for a novel air-launch/recovery system likely represents a significant investment. Further context on the number of phases and expected milestones would allow for a more precise comparison.

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

The primary risk with a CPFF contract for R&D is that the contractor may have less incentive to control costs compared to fixed-price contracts, as the government agrees to pay all allowable costs incurred. While the fixed fee provides a profit margin, the variable cost component means that cost overruns directly increase the total contract price. For R&D, where the scope and technical challenges can be uncertain, this structure can lead to significant cost growth if not managed with stringent oversight. The government bears the brunt of cost uncertainty, while the contractor is assured a profit on incurred costs.

What does 'Full and Open Competition After Exclusion of Sources' imply about the bidding process?

The 'Full and Open Competition After Exclusion of Sources' designation suggests a nuanced procurement approach. It implies that the initial solicitation was intended to be open to all responsible sources. However, specific sources were subsequently excluded from consideration, or the exclusion was a condition from the outset for certain types of entities. This could be due to specialized capabilities, proprietary technology, or national security concerns that limit the pool of eligible contractors. While it aims for openness, the exclusion inherently reduces the number of potential bidders, potentially impacting the level of competition and the resulting price discovery.

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

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a well-established and extensive track record with the Department of Defense, particularly in the development and production of unmanned aerial systems. They are renowned for platforms like the Predator and Reaper. While their primary success lies in production and sustainment, GA-ASI also engages in significant R&D efforts, often funded by DARPA and other military branches, to enhance existing platforms or develop new capabilities. Their history includes numerous contracts for advanced avionics, sensor integration, and aerodynamic improvements for UAVs, demonstrating a strong capacity for complex R&D projects within the defense sector.

What are the potential long-term implications of the Longshot UAV program for future military operations?

The Longshot UAV program has the potential to significantly alter future military operational concepts. By enabling manned aircraft to deploy and recover UAVs at extended ranges, it could dramatically increase the effective combat radius and persistence of aerial assets without increasing the risk to manned platforms. This could lead to more flexible and distributed air operations, enhanced intelligence, surveillance, and reconnaissance (ISR) capabilities, and the ability to employ specialized payloads in contested environments. It represents a step towards more autonomous and networked air power, potentially reducing the need for large, vulnerable manned aircraft in certain roles.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HR001120S0037

Offers Received: 1

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: $95,144,047

Exercised Options: $94,291,379

Current Obligation: $94,291,379

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $13,428,871

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline