DoD Awards $34.4M for MQ-9 Reaper Spares to General Atomics, No Competition

Contract Overview

Contract Amount: $34,439,230 ($34.4M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-09-28

End Date: 2026-09-28

Contract Duration: 1,096 days

Daily Burn Rate: $31.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS CONTRACT PROCURES -25 AND GROUND CONTROL STATION (GCS) SPARES FOR THE MQ-9.

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $34.4 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: THIS CONTRACT PROCURES -25 AND GROUND CONTROL STATION (GCS) SPARES FOR THE MQ-9. Key points: 1. Significant sole-source award for critical MQ-9 Reaper components. 2. General Atomics is the sole provider, limiting competitive pressure. 3. High value contract for sustainment of a key defense asset. 4. Focus on aircraft manufacturing sector, specifically unmanned aerial systems.

Value Assessment

Rating: fair

The contract value of $34.4M for MQ-9 spares appears reasonable given the specialized nature of the equipment and the sole-source provider. Benchmarking is difficult without comparable sole-source contracts for similar advanced drone components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to General Atomics Aeronautical Systems, Inc. This lack of competition likely resulted in higher prices than could have been achieved through a competitive process.

Taxpayer Impact: Taxpayer funds are being spent without the benefit of competitive pricing, potentially leading to a less efficient use of resources for these critical spares.

Public Impact

Ensures continued operational readiness of the MQ-9 Reaper, a vital intelligence, surveillance, and reconnaissance (ISR) platform. Supports the U.S. Navy's unmanned aerial vehicle fleet. Potential for increased costs due to the absence of competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Potential for cost overruns without competitive pressure.
Reliance on a single supplier for critical components.

Positive Signals

Ensures availability of essential spares for MQ-9 operations.
Supports a key defense program for national security.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically for components of unmanned aerial systems (UAS). Spending benchmarks for sole-source UAS spare parts are difficult to establish due to the specialized and often proprietary nature of the technology.

Small Business Impact

This contract was awarded directly to General Atomics Aeronautical Systems, Inc., a large business. There is no indication of subcontracting opportunities for small businesses within this specific award notice.

Oversight & Accountability

The Department of the Navy is the awarding agency. Oversight would typically involve contract management to ensure timely delivery and adherence to specifications, but the lack of competition limits oversight on pricing effectiveness.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Lack of competitive pricing
Potential for higher costs
Dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.4 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. THIS CONTRACT PROCURES -25 AND GROUND CONTROL STATION (GCS) SPARES FOR THE MQ-9.

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 Navy).

What is the total obligated amount?

The obligated amount is $34.4 million.

What is the period of performance?

Start: 2023-09-28. End: 2026-09-28.

What is the justification for the sole-source award, and has an alternatives analysis been performed?

The justification for a sole-source award is typically based on factors like unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. An alternatives analysis would assess if other sources could meet the need, even if less ideally. Without this information, it's difficult to fully assess the necessity of bypassing competition.

How does the pricing of these MQ-9 spares compare to industry benchmarks for similar unmanned aircraft components, considering the sole-source nature?

Direct comparison is challenging due to the sole-source status and specialized nature of MQ-9 components. However, a fair comparison would involve looking at pricing for similar high-value, low-volume components for other advanced military aircraft or drones, adjusted for technological complexity. The absence of competition suggests prices may be higher than a competitive market would yield.

What measures are in place to ensure the long-term availability and affordability of these critical spares beyond this initial contract?

Given the sole-source nature, long-term affordability relies heavily on the relationship and negotiation leverage with General Atomics. The DoD might explore options like technology transfer, developing alternative sources for future procurements, or negotiating long-term sustainment agreements with built-in price escalators or review clauses to manage costs over time.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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

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: $96,953,294

Exercised Options: $34,439,230

Current Obligation: $34,439,230

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $13,845,625

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001922G0006

IDV Type: BOA

Timeline