DoD's $8.3M EMALS/AAG F35 Baseline Updates Contract Awarded to General Atomics
Contract Overview
Contract Amount: $8,356,335 ($8.4M)
Contractor: General Atomics
Awarding Agency: Department of Defense
Start Date: 2023-05-03
End Date: 2026-07-31
Contract Duration: 1,185 days
Daily Burn Rate: $7.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: EMALS AND AAG F35 COMPATIBILITY BASELINE UPDATES
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92101
Plain-Language Summary
Department of Defense obligated $8.4 million to GENERAL ATOMICS for work described as: EMALS AND AAG F35 COMPATIBILITY BASELINE UPDATES Key points: 1. Contract focuses on critical compatibility updates for aircraft launch and recovery systems. 2. Sole-source award raises questions about potential price overruns and lack of competitive pressure. 3. Long performance period (over 3 years) suggests a complex and potentially evolving scope. 4. Contractor General Atomics has a significant presence in defense aerospace. 5. Geographic concentration in California may indicate specific industrial base strengths or limitations. 6. Fixed-price contract type aims to control costs, but sole-source nature limits its effectiveness.
Value Assessment
Rating: questionable
Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The $8.3 million price tag for baseline updates needs careful scrutiny against historical spending on similar system modifications and the contractor's cost structure. Without competition, it's difficult to ascertain if the government secured the best possible price or if efficiencies could have been achieved through a more open bidding process. The fixed-price nature provides some cost control, but the absence of alternatives limits the government's leverage.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, General Atomics, was considered. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they inherently reduce price discovery and can lead to higher costs for the government compared to a fully competed contract. The lack of competition here means taxpayers did not benefit from potential cost savings that could arise from a bidding war.
Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium. Without competitive bids, there's less assurance that the price reflects the lowest reasonable cost for the required services.
Public Impact
The primary beneficiaries are the Department of the Navy and the F35 program, ensuring operational readiness. Services delivered include essential baseline updates for the EMALS (Electromagnetic Aircraft Launch System) and AAG (Advanced Arresting Gear). The contract's performance is geographically concentrated in California, potentially impacting the local aerospace workforce. Successful completion supports the Navy's carrier aviation capabilities, crucial for national defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings.
- Long contract duration could lead to scope creep or cost overruns if not managed tightly.
- Lack of transparency in the sole-source justification process.
Positive Signals
- Fixed-price contract type helps to cap costs.
- Contractor General Atomics is an established defense contractor with relevant expertise.
- Updates are critical for maintaining F35 operational readiness.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft launch and recovery systems. The market for such specialized equipment is relatively concentrated, with a few key players like General Atomics dominating. Spending in this niche is driven by military modernization programs and the need to maintain and upgrade existing platforms. Comparable spending benchmarks would likely involve other large, complex defense system integration and upgrade contracts, often characterized by high R&D costs and long development cycles.
Small Business Impact
This contract does not appear to involve a small business set-aside, nor is there explicit information regarding subcontracting opportunities for small businesses. The sole-source nature further reduces the likelihood of broad subcontracting. This means the direct economic impact on the small business ecosystem from this specific award is likely minimal, unless General Atomics voluntarily engages small businesses for specific components or services not detailed in the award notice.
Oversight & Accountability
Oversight for this contract will primarily reside with the Department of the Navy's contracting and program management officials. Accountability measures are embedded within the fixed-price contract terms, requiring delivery of specified updates. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's performance or execution.
Related Government Programs
- F35 Program Support Contracts
- Naval Aviation Systems Procurement
- Aircraft Launch and Recovery Equipment
- Defense Contractor Services
Risk Flags
- Sole Source Justification
- Potential for Cost Overruns
- Limited Competition
Tags
defense, department-of-the-navy, general-atomics, sole-source, fixed-price, aircraft-parts, california, f35, emals, aag, baseline-updates, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $8.4 million to GENERAL ATOMICS. EMALS AND AAG F35 COMPATIBILITY BASELINE UPDATES
Who is the contractor on this award?
The obligated recipient is GENERAL ATOMICS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $8.4 million.
What is the period of performance?
Start: 2023-05-03. End: 2026-07-31.
What is General Atomics' track record with similar EMALS/AAG contracts or modifications?
General Atomics has a significant history with the EMALS and AAG programs, having been a primary contractor for their development and integration onto naval vessels. Their track record includes delivering these complex systems for aircraft carriers like the USS Gerald R. Ford. While their technical expertise is established, specific details on past performance regarding cost overruns, schedule adherence, or quality issues on similar modification contracts would require deeper analysis of contract performance reports and historical data. The current sole-source award suggests a perceived necessity for their unique capabilities or a lack of viable alternatives for this specific baseline update.
How does the $8.3 million cost compare to similar baseline update contracts for naval aviation systems?
Directly comparing the $8.3 million cost is difficult without access to proprietary data or specific contract details for comparable baseline updates. However, contracts for specialized aerospace systems, especially those involving critical compatibility and integration for advanced platforms like the F35, often run into millions of dollars. The value is influenced by factors such as the complexity of the required modifications, the engineering effort involved, testing, and the specific expertise needed. Given the sole-source nature, a robust benchmark against competitively bid contracts is absent, making it hard to definitively state if this represents optimal value for money.
What are the primary risks associated with this sole-source contract award?
The primary risks associated with this sole-source contract are financial and performance-related. Financially, the lack of competition increases the risk of paying a premium price, as General Atomics faces no direct pressure to offer the lowest possible cost. Performance-wise, while General Atomics is an experienced contractor, sole-source awards can sometimes lead to complacency or less rigorous adherence to schedules and quality standards compared to a competitive environment. There's also a risk of scope creep if the 'baseline updates' are not precisely defined and managed, potentially leading to cost increases beyond the initial $8.3 million.
How effective are fixed-price contracts in mitigating cost risks for sole-source defense procurements?
Fixed-price contracts are designed to mitigate cost risks by establishing a ceiling price for the work. In theory, the contractor assumes the risk of cost overruns. However, in a sole-source scenario, the effectiveness is diminished. While the government won't pay more than the agreed price, the initial price itself might be inflated due to the lack of competition. Furthermore, if the scope is not rigidly defined, change orders or contract modifications can still increase the total cost. Therefore, while fixed-price offers some protection, its benefit is significantly reduced when competition is absent.
What is the historical spending trend for EMALS/AAG related contracts within the Department of the Navy?
Historical spending on EMALS and AAG within the Department of the Navy has been substantial, reflecting the significant investment in modernizing carrier aviation capabilities. These programs represent major acquisition efforts, involving not just the initial procurement but also ongoing sustainment, upgrades, and integration with new aircraft. Annual spending can fluctuate based on program milestones, production rates, and modernization initiatives. Analyzing past spending would reveal multi-year trends showing significant capital outlays for these complex systems, often involving large, multi-billion dollar contracts over the life cycle of the systems.
Are there any alternative technologies or contractors that could have provided these baseline updates?
The determination of 'alternative technologies or contractors' is central to the justification for a sole-source award. For highly specialized systems like EMALS and AAG, particularly concerning baseline compatibility updates for specific aircraft like the F35, the number of capable contractors may indeed be limited. General Atomics has been a key player in the development and implementation of these systems. A thorough review would typically involve market research to identify any other firms possessing the requisite technical knowledge, security clearances, and manufacturing capabilities. The absence of such alternatives, or perceived lack thereof, underpins the sole-source decision.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Diazyme Laboratories, Inc.
Address: 3550 GENERAL ATOMICS CT, SAN DIEGO, CA, 92121
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: $8,831,817
Exercised Options: $8,356,335
Current Obligation: $8,356,335
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $166,009
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0001921G0014
IDV Type: BOA
Timeline
Start Date: 2023-05-03
Current End Date: 2026-07-31
Potential End Date: 2026-07-31 00:00:00
Last Modified: 2025-12-09
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