DoD awards $1.07B for Predator UAV airframes and spares to General Atomics Aeronautical Systems, Inc

Contract Overview

Contract Amount: $107,336,098 ($107.3M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 1998-03-13

End Date: 2009-06-30

Contract Duration: 4,127 days

Daily Burn Rate: $26.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: 199811!1700!0926!AT722!NAVAL AIR SYSTEMS COMMAND !N0001998C0072 !A!*!* !19980313!20000812!824684229!809717598!859181984!N!0YJB5!GENERAL ATOMICS AERONAUTICAL S!16761 VIA DEL CAMPO CT !SAN DIEGO !CA!92127!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!0001!+000053668049!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2DAA!PREDATOR UAV !3728!1!*!*!*!B!A!*!D !N!L!1!001!N!1A!A!N!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92127

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $107.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: 199811!1700!0926!AT722!NAVAL AIR SYSTEMS COMMAND !N0001998C0072 !A!*!* !19980313!20000812!824684229!809717598!859181984!N!0YJB5!GENERAL ATOMICS AERONAUTICAL S!16761 VIA DEL CAMPO CT !SAN DIEGO !CA!92127!66000!073!06!SAN DIEGO !SAN DI… Key points: 1. Contract awarded for critical components of the Predator Unmanned Aerial Vehicle (UAV) program. 2. Significant investment in airframes and spares indicates ongoing operational needs and potential future expansion. 3. Sole-source award raises questions about competition and potential cost efficiencies. 4. Long contract duration suggests a sustained requirement for these specialized components. 5. The award falls under the broader category of Aircraft Fixed Wing, highlighting its role in aviation procurement. 6. Geographic concentration of the contractor in California may have regional economic implications.

Value Assessment

Rating: fair

The total award amount of $1.07 billion for airframes and spares for the Predator UAV is substantial. Without specific unit costs or detailed breakdowns of the spares included, a direct value-for-money assessment is challenging. However, the nature of specialized defense procurement, particularly for advanced systems like UAVs, often involves higher costs due to research, development, and stringent quality requirements. Benchmarking against similar sole-source contracts for advanced aerospace components would be necessary for a more precise evaluation of pricing.

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 Aeronautical Systems, Inc., was considered. This approach is typically used when a single source possesses unique capabilities, proprietary technology, or when urgency and national security considerations preclude a competitive process. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bids had been solicited.

Taxpayer Impact: For taxpayers, a sole-source award means that the government did not benefit from competitive bidding, which could have driven down prices. The absence of competition limits the government's leverage in negotiating the best possible price.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other branches utilizing the Predator UAV for intelligence, surveillance, and reconnaissance (ISR) missions. The contract delivers essential airframes and spare parts, ensuring the operational readiness and sustainment of the Predator UAV fleet. The geographic impact is concentrated in San Diego, California, where the contractor is located, potentially supporting local jobs and the aerospace industry. Workforce implications include the need for skilled labor in manufacturing, engineering, and logistics at General Atomics Aeronautical Systems, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration could mask inefficiencies if not closely monitored.
Lack of transparency in sole-source justifications requires careful review.
Dependence on a single supplier for critical components poses supply chain risks.

Positive Signals

Award to a known, specialized contractor for a critical defense system.
Ensures continued operational capability of the Predator UAV fleet.
Supports a key defense technology provider and its associated workforce.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on unmanned aerial vehicles (UAVs). The market for UAVs is a rapidly growing segment of the defense industry, driven by increasing demand for intelligence, surveillance, and reconnaissance capabilities. General Atomics Aeronautical Systems is a major player in this market. Comparable spending benchmarks would involve analyzing other large contracts for UAV platforms and their associated sustainment and spare parts.

Small Business Impact

This contract does not appear to have a specific small business set-aside component. As a sole-source award to a large prime contractor, the primary focus is on the capabilities of General Atomics Aeronautical Systems. Subcontracting opportunities for small businesses may exist within the supply chain managed by the prime contractor, but these are not explicitly detailed in the provided data. The impact on the small business ecosystem is indirect, depending on the subcontracting practices of the awardee.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Naval Air Systems Command (NAVAIR) and the Department of Defense's contracting and program management offices. Accountability measures would be embedded in the contract's terms and conditions, including performance metrics and delivery schedules. Transparency is limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Predator UAV Program
Unmanned Aerial Vehicle Procurement
Aerospace and Defense Manufacturing
Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Department of Defense Aircraft Procurement

Risk Flags

Sole-source award
Long contract duration
Lack of detailed cost breakdown
Potential for cost overruns in fixed-price incentive contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $107.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. 199811!1700!0926!AT722!NAVAL AIR SYSTEMS COMMAND !N0001998C0072 !A!*!* !19980313!20000812!824684229!809717598!859181984!N!0YJB5!GENERAL ATOMICS AERONAUTICAL S!16761 VIA DEL CAMPO CT !SAN DIEGO !CA!92127!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!0001!+000053668049!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2DAA!PREDATOR UAV !3728!1!*!*!*!B!A!*!D !N!L!1!0

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 Air Force).

What is the total obligated amount?

The obligated amount is $107.3 million.

What is the period of performance?

Start: 1998-03-13. End: 2009-06-30.

What is the historical spending trend for the Predator UAV program with General Atomics Aeronautical Systems, Inc.?

The provided data represents a single award of $1.07 billion for airframes and spares, with a contract period from March 13, 1998, to June 30, 2009. To understand the historical spending trend, one would need to examine all contract actions awarded to General Atomics Aeronautical Systems, Inc. for the Predator program across its lifecycle. This would involve querying contract databases for all related awards, modifications, and task orders. Analyzing these records would reveal the total investment over time, identify periods of increased or decreased spending, and potentially highlight major program milestones or shifts in procurement strategy. Without access to the complete contract history, it's impossible to establish a comprehensive spending trend beyond this specific award.

How does the per-unit cost of Predator UAV airframes compare to similar platforms?

Determining the precise per-unit cost of Predator UAV airframes from this award is challenging due to the inclusion of 'spares' and the fixed-price incentive contract type, which can adjust final costs based on performance. The total award is $1.07 billion over a duration of approximately 11 years. To establish a per-unit cost, we would need the exact number of airframes procured under this specific contract and a clear separation of costs for spares. Furthermore, a meaningful comparison would require benchmarking against the per-unit costs of other medium-altitude, long-endurance (MALE) UAVs, such as the MQ-9 Reaper (an evolution of the Predator), or even comparable manned aircraft if their mission sets overlap. Such data is often sensitive and not publicly available in detail, making direct per-unit cost comparisons difficult without access to classified or proprietary information.

What are the key performance indicators (KPIs) associated with this contract, and how has the contractor performed against them?

The provided data indicates the contract type is 'FIXED PRICE INCENTIVE' (FPI), which suggests that performance incentives related to cost, schedule, or technical objectives were likely established. However, the specific Key Performance Indicators (KPIs) are not detailed in this summary. For an FPI contract, the government and contractor agree on target costs, target profits, and ceiling prices, with adjustments made based on actual costs incurred and performance achieved. To assess contractor performance, one would need to review contract performance reports, delivery records, quality assurance data, and any documented incentive payouts or penalties. Without access to these performance metrics and historical reports, it is not possible to evaluate how General Atomics Aeronautical Systems, Inc. has performed against the KPIs for this specific award.

What is the risk profile of General Atomics Aeronautical Systems, Inc. as a sole-source provider for critical UAV components?

As a sole-source provider for critical Predator UAV components, General Atomics Aeronautical Systems, Inc. holds a significant position, which inherently carries risks for the government. The primary risk is the lack of competition, potentially leading to higher prices and reduced innovation incentives. There's also a dependency risk; if the contractor faces production issues, financial instability, or geopolitical challenges, the supply chain for these vital defense assets could be disrupted. However, General Atomics is a well-established and specialized company with a proven track record in UAV development and manufacturing, which mitigates some risks related to technical capability and reliability. The government's mitigation strategy likely involves robust contract management, close monitoring of performance, and potentially maintaining alternative sourcing options or internal capabilities for critical technologies where feasible.

How has the funding for the Predator UAV program evolved over the years, and what does this award represent in that context?

This specific award of $1.07 billion represents a significant, but likely not the entirety, of the funding for the Predator UAV program during its operational life. The contract spans from 1998 to 2009, a period crucial for the development and widespread deployment of UAVs in military operations. The evolution of funding would show an initial investment in R&D and procurement, followed by sustained funding for sustainment, upgrades, and spare parts, as exemplified by this award. Analyzing the total obligated amounts and outlays over the program's history would reveal peaks and troughs corresponding to fleet expansion, modernization efforts, and operational tempo. This award signifies a substantial commitment to maintaining and supporting the Predator fleet during a critical phase of its service life.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Contractor Details

Parent Company: General Atomics (UEI: 859181984)

Address: 16761 VIA DEL CAMPO CT, SAN DIEGO, CA, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline