DoD Awards $148.5M Contract for UAS ISR Services to General Atomics, Lacking Competition

Contract Overview

Contract Amount: $148,491,919 ($148.5M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-06-15

End Date: 2023-11-15

Contract Duration: 1,979 days

Daily Burn Rate: $75.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF CO/CO GROUP 5 UAS ISR SERVICES

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $148.5 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: IGF::OT::IGF CO/CO GROUP 5 UAS ISR SERVICES Key points: 1. Significant contract value of $148.5 million for Unmanned Aircraft Systems (UAS) Intelligence, Surveillance, and Reconnaissance (ISR) services. 2. Sole-source award to General Atomics Aeronautical Systems, Inc. raises concerns about competitive pricing and market fairness. 3. The contract spans nearly 5 years, indicating a long-term reliance on this specific provider. 4. The primary sector is Defense, with a specific focus on ISR capabilities.

Value Assessment

Rating: questionable

The contract value is substantial at $148.5 million. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar UAS ISR services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition may result in inflated prices, directly impacting taxpayer funds allocated to defense.

Public Impact

Taxpayers may be overpaying for critical ISR services due to the absence of competitive bidding. The reliance on a single provider could create vulnerabilities in the supply chain or service delivery. The long duration of the contract limits opportunities for other companies to offer potentially more innovative or cost-effective solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration
Potential for overpayment

Positive Signals

Essential defense capability
Experienced contractor

Sector Analysis

This contract falls within the Defense sector, specifically for UAS ISR services. Benchmarks for similar services are hard to establish due to the sole-source nature, but ISR is a critical and growing area of defense spending.

Small Business Impact

The contract was awarded to General Atomics Aeronautical Systems, Inc., a large business. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government received the best possible value and that the justification for sole-sourcing was robust.

Related Government Programs

Surveying and Mapping (except Geophysical) Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Limited market research transparency
Long-term reliance on a single vendor
No clear small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $148.5 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. IGF::OT::IGF CO/CO GROUP 5 UAS ISR SERVICES

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $148.5 million.

What is the period of performance?

Start: 2018-06-15. End: 2023-11-15.

What was the specific justification for awarding this contract on a sole-source basis, and was a thorough market research conducted to confirm no other capable vendors existed?

The justification for a sole-source award is critical for ensuring fair competition and taxpayer value. Agencies must demonstrate that only one responsible source can satisfy the agency's needs. This typically involves extensive market research, including identifying potential competitors and assessing their capabilities. Without this justification, the award raises significant concerns about whether the government explored all avenues for competitive pricing and innovation.

How does the per-unit cost or overall pricing of these UAS ISR services compare to publicly available benchmarks or similar contracts awarded competitively?

Without competitive bidding, establishing a precise benchmark is challenging. However, a comparison to industry standards for UAS ISR services, considering factors like platform type, sensor capabilities, and operational tempo, is essential. If pricing appears significantly higher than comparable competitive contracts or industry averages, it suggests potential overpayment and warrants further investigation into the contractor's pricing structure and the agency's negotiation process.

What are the long-term implications of relying on a single provider for such a critical defense capability, particularly regarding technological advancements and potential supply chain disruptions?

Sole-source contracts, especially for extended periods, can stifle innovation by discouraging competitors from investing in developing alternative solutions. It also creates a dependency on one supplier, increasing vulnerability to supply chain disruptions, price hikes, or the contractor's potential exit from the market. Agencies should actively seek opportunities to introduce competition or ensure robust contingency plans are in place.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Surveying and Mapping (except Geophysical) Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001918R0048

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Atomics

Address: 14200 KIRKHAM WAY, POWAY, CA, 92064

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $153,382,582

Exercised Options: $148,491,919

Current Obligation: $148,491,919

Actual Outlays: $11,148,075

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $3,216,313

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline