Navy awards $8.69M for aircraft parts, with no competition and a fixed price

Contract Overview

Contract Amount: $8,686,144 ($8.7M)

Contractor: General Atomics

Awarding Agency: Department of Defense

Start Date: 2025-08-29

End Date: 2026-10-30

Contract Duration: 427 days

Daily Burn Rate: $20.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FOR THE PROCUREMENT OF SERDS, SUPPORT EQUIPMENT TOOLS, LOGISTICS SUPPORT AND TDP IN SUPPORT OF THE DEPOT STAND UP FOR EMALS FORD CLASS.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92121

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $8.7 million to GENERAL ATOMICS for work described as: FOR THE PROCUREMENT OF SERDS, SUPPORT EQUIPMENT TOOLS, LOGISTICS SUPPORT AND TDP IN SUPPORT OF THE DEPOT STAND UP FOR EMALS FORD CLASS. Key points: 1. The contract's fixed-price structure aims to control costs, but the lack of competition limits price discovery. 2. Procurement of support equipment and logistics for aircraft systems suggests a critical operational need. 3. The contract duration of over a year indicates a sustained requirement for these specialized parts. 4. Sole-source awards can sometimes lead to higher prices compared to competitive bids. 5. The specific part number '336413' points to a niche manufacturing sector. 6. The award to General Atomics suggests reliance on established suppliers for specialized defense components.

Value Assessment

Rating: questionable

The contract is a firm fixed price delivery order valued at $8.69 million. Without competitive bidding, it is difficult to benchmark the value for money. The price is set, but the absence of multiple offers means there's no market validation to ensure it's the best possible price. Comparisons to similar contracts for specialized aircraft parts would be necessary to assess if the pricing is reasonable, but such data is not readily available for this sole-source award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The data explicitly states 'NOT COMPETED'. This means only one vendor, General Atomics, was solicited or considered for this procurement. The lack of competition means there were no other bidders to drive down the price through a bidding process, potentially impacting price discovery and the government's ability to secure the most cost-effective solution.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive pressure. The government's negotiating position is weakened when only one supplier is available.

Public Impact

The U.S. Navy benefits from the procurement of essential support equipment and logistics for its aircraft fleet. Services delivered include the provision of support equipment, tools, and logistics support for depot stand-up. The geographic impact is primarily in California, where the depot operations are likely located. The contract supports specialized manufacturing and logistics roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars.
Sole-source awards can create dependency on a single contractor, limiting future flexibility.
The absence of a competitive process makes it harder to assess the contractor's performance against market alternatives.

Positive Signals

Firm fixed price contract type helps to establish cost certainty for the government.
The award is to a known entity, General Atomics, suggesting a level of trust and established relationship.
The contract supports critical defense systems (EMALS), indicating alignment with national security priorities.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The North American Industry Classification System (NAICS) code 336413 covers 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' This sector is characterized by high technological requirements, stringent quality standards, and often long production lead times. Spending in this area is driven by military readiness and modernization programs. Comparable spending benchmarks would typically involve analyzing other Navy or Air Force procurements for similar specialized aircraft components or support equipment.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. The award is made directly to General Atomics, a large defense contractor. Therefore, this specific award does not appear to directly benefit small businesses through set-asides. The implications for small business subcontracting are unknown without further details on the contractor's subcontracting plan, if any.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the lack of competition. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the performance or execution of this contract.

Related Government Programs

Naval Air Systems Command (NAVAIR) Procurements
Aircraft Parts and Components Manufacturing
Defense Logistics Support Contracts
EMALS Program Support
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.7 million to GENERAL ATOMICS. FOR THE PROCUREMENT OF SERDS, SUPPORT EQUIPMENT TOOLS, LOGISTICS SUPPORT AND TDP IN SUPPORT OF THE DEPOT STAND UP FOR EMALS FORD CLASS.

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 $8.7 million.

What is the period of performance?

Start: 2025-08-29. End: 2026-10-30.

What is the justification for this contract being sole-sourced?

The provided data does not include the specific justification for this contract being sole-sourced. Typically, sole-source procurements are justified under circumstances such as when only one responsible source is available, or when a public exigency requires immediate contract award. For defense procurements, justifications often relate to unique technical capabilities, proprietary data, or urgent operational needs that cannot be met by other vendors. Without the official justification document (e.g., a Justification and Approval or J&A), it is impossible to definitively state why this contract was not competed. Further investigation into the Federal Procurement Data System (FPDS) or agency records would be required to obtain this information.

How does the $8.69 million value compare to similar aircraft parts procurements?

Benchmarking the $8.69 million value against similar aircraft parts procurements is challenging without more specific details on the exact nature of the 'support equipment tools, logistics support and TDP' and the specific aircraft systems (EMALS). However, for specialized, high-technology components or support packages within the defense sector, $8.69 million can represent a significant investment. Contracts for major aircraft systems or their unique support infrastructure can range from millions to billions of dollars. Given this is a sole-source award for specialized support, it is plausible that the price reflects unique manufacturing requirements or limited supplier availability. A detailed comparison would require identifying contracts with identical or highly similar NAICS codes (336413) and service descriptions, preferably those that were competitively procured to establish a price baseline.

What are the primary risks associated with a sole-source award for critical aircraft parts?

The primary risks associated with a sole-source award for critical aircraft parts include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of market validation for the price. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future options and increasing long-term costs. Furthermore, without competition, it can be more difficult to assess the contractor's overall performance and value proposition against potential alternatives. This can also raise concerns about transparency and fairness in the procurement process, potentially leading to perceptions of favoritism or inefficiency.

What is General Atomics' track record with the Department of the Navy?

General Atomics is a well-established defense contractor with a significant track record of providing advanced technologies and services to the Department of the Navy and other military branches. They are known for their work in areas such as unmanned aerial systems (e.g., Predator, Reaper), naval aviation components, and advanced electronics. Their involvement in programs like the Electromagnetic Aircraft Launch System (EMALS) for the Ford-class carriers, which this contract supports, indicates a deep understanding of naval aviation requirements. While specific performance metrics for individual contracts are not detailed here, their continued selection for complex defense programs suggests a generally positive or at least acceptable performance history with the Navy.

What is the historical spending pattern for NAICS code 336413 by the Department of the Navy?

Historical spending by the Department of the Navy under NAICS code 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing) would likely show consistent investment in maintaining and upgrading its fleet. This sector is crucial for ensuring aircraft readiness and incorporating new technologies. Spending patterns would fluctuate based on modernization programs, fleet size, and specific platform requirements. While the total annual spending for this code by the Navy isn't provided, it's reasonable to assume it represents a substantial portion of the Navy's MRO (Maintenance, Repair, and Overhaul) budget for aviation. The Navy often procures specialized parts and components that are unique to its platforms, leading to a mix of competitive and sole-source awards within this category.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT LAUNCHING, LANDING, GROUND HANDLING AND SERVICING EQUIPMENT

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: $25,482,904

Exercised Options: $8,686,144

Current Obligation: $8,686,144

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001921G0014

IDV Type: BOA

Timeline