Navy Awards $1.69 Billion for MQ-9A Reaper Drone Conversions to General Atomics

Contract Overview

Contract Amount: $16,909,654 ($16.9M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-08-02

End Date: 2026-12-31

Contract Duration: 1,247 days

Daily Burn Rate: $13.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MQ9A -25 CONVERSION

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $16.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: MQ9A -25 CONVERSION Key points: 1. Significant investment in advanced drone technology for naval operations. 2. Sole-source award to General Atomics, a key defense contractor. 3. Long-term contract duration suggests sustained need and potential for future modifications. 4. Focus on aircraft manufacturing sector, a critical component of defense spending.

Value Assessment

Rating: questionable

The total award value of $1.69 billion for 1 MQ-9A conversion is substantial. Without specific details on the scope of work and the baseline cost for a single conversion, it's difficult to assess value. Benchmarking against similar complex aircraft modification contracts is needed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to General Atomics. This limits price discovery and competitive pressure, potentially leading to higher costs for the government.

Taxpayer Impact: The lack of competition raises concerns about taxpayer value, as the government may not be securing the best possible price for this significant expenditure.

Public Impact

Enhances naval intelligence, surveillance, and reconnaissance capabilities. Supports modernization of the U.S. military's unmanned aerial vehicle fleet. Potential impact on global drone market dynamics and technological advancements. Job creation within the aerospace and defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
High contract value
Sole-source award

Positive Signals

Critical defense capability enhancement
Long-term contract provides stability

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically for unmanned aerial systems. Defense spending in this area is substantial, driven by evolving geopolitical landscapes and the need for advanced surveillance and strike capabilities.

Small Business Impact

The awardee is a large defense contractor, General Atomics. There is no indication of small business participation in this specific contract, which is common for sole-source, high-value sole-prime awards.

Oversight & Accountability

The Department of the Navy is the contracting agency. Oversight will focus on contract performance, delivery schedules, and adherence to the firm-fixed-price terms. The lack of competition warrants close scrutiny of cost justification.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits competitive pricing.
High contract value requires robust oversight.
Potential for cost overruns without competitive pressure.
Dependence on a single contractor for critical capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. MQ9A -25 CONVERSION

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 $16.9 million.

What is the period of performance?

Start: 2023-08-02. End: 2026-12-31.

What is the specific justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves factors like unique capabilities, proprietary technology, or urgent need where only one source can meet requirements. The Department of the Navy should have conducted a thorough price analysis, potentially using historical pricing, cost data, or independent government cost estimates, to ensure the negotiated price was fair and reasonable despite the lack of competition.

What are the key performance metrics and deliverables for the MQ-9A conversion, and how will their successful completion be measured?

Key performance metrics likely include successful conversion of the airframes to MQ-9A standard, integration of specified avionics and sensor packages, and adherence to stringent quality control standards. Deliverables would encompass the converted aircraft, associated documentation, and potentially training or support packages. Success will be measured against contract specifications, acceptance testing, and delivery timelines.

What is the projected operational impact and cost-effectiveness of the MQ-9A conversions compared to alternative platforms or upgrades?

The MQ-9A offers significant ISR and strike capabilities, potentially providing a cost-effective solution compared to manned platforms for certain missions. Its long endurance and payload capacity are key advantages. However, a detailed cost-benefit analysis comparing it to other unmanned systems or upgrades to existing platforms would be necessary to fully assess its operational impact and long-term cost-effectiveness.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: $16,909,654

Exercised Options: $16,909,654

Current Obligation: $16,909,654

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $1,187,096

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