DoD's $13.9M software support contract for Gray Eagle drones awarded to General Atomics without competition

Contract Overview

Contract Amount: $13,916,171 ($13.9M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-09-23

End Date: 2023-10-20

Contract Duration: 757 days

Daily Burn Rate: $18.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK ORDER IN SUPPORT OF TECHNICAL SERVICE MEMORANDUM (TSM) GA-ASI 21-007 DROP 3, "GRAY EAGLE POST PRODUCTION SOFTWARE SUPPORT (PPSS) 2021 DROP 3", DATED 30 JULY 2021.

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $13.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: TASK ORDER IN SUPPORT OF TECHNICAL SERVICE MEMORANDUM (TSM) GA-ASI 21-007 DROP 3, "GRAY EAGLE POST PRODUCTION SOFTWARE SUPPORT (PPSS) 2021 DROP 3", DATED 30 JULY 2021. Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract's cost-plus-fixed-fee structure may incentivize higher spending without strict cost controls. 3. A significant duration of 757 days suggests a long-term reliance on this specific vendor. 4. The contract falls under R&D in physical, engineering, and life sciences, indicating a focus on advanced technological support. 5. The absence of small business involvement raises questions about broader economic participation. 6. The contract's value, while substantial, needs benchmarking against similar post-production support services.

Value Assessment

Rating: questionable

Benchmarking the value of this specific software support contract is challenging without comparable sole-source agreements for the Gray Eagle platform. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can lead to cost overruns if not meticulously managed. The fixed fee component provides some predictability, but the cost reimbursement aspect requires robust oversight to ensure efficiency and prevent unnecessary expenditures. Without competitive bidding, it's difficult to ascertain if the government received the best possible price.

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. The justification for this approach is not provided but is typically due to proprietary technology, unique capabilities, or the need for continuity of support for a specific platform. The lack of competition means there was no opportunity for other vendors to offer their services, potentially leading to higher prices than if a competitive process had been employed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, the government lacked leverage to negotiate the lowest possible price for these critical software support services.

Public Impact

The primary beneficiary is the Department of Defense, ensuring continued operational readiness of the Gray Eagle Unmanned Aircraft System (UAS). Services delivered include post-production software support, crucial for maintaining the functionality and security of the drone's complex systems. The geographic impact is likely concentrated where Gray Eagle drones are deployed or maintained, potentially globally. Workforce implications include specialized technical roles for software engineers and support staff at General Atomics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost-plus-fixed-fee structure can incentivize higher spending if not closely monitored.
Lack of transparency regarding the justification for sole-source award.
Absence of small business participation in a significant contract.

Positive Signals

Ensures continuity of essential software support for a critical defense asset (Gray Eagle UAS).
General Atomics likely possesses unique expertise for this specific platform's software.
Contract duration suggests a recognized need for ongoing, specialized support.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on software support for advanced aerospace technology. The market for UAS software support is specialized, with a few key players like General Atomics dominating specific platforms. Comparable spending benchmarks would involve analyzing other post-production support contracts for similar complex unmanned systems, which are often awarded on a sole-source or limited-competition basis due to technical expertise requirements.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the provided data. The sole-source nature of the award to a large aerospace company limits the potential for small business participation. This could mean missed opportunities to foster innovation and economic growth within the small business defense contracting ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring compliance with contract terms and conditions. Accountability measures are inherent in the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is limited by the sole-source nature, but contract award data is publicly available through federal procurement databases.

Related Government Programs

Gray Eagle Unmanned Aircraft System (UAS) Program
Defense Software Development and Maintenance Contracts
Aerospace R&D Support Services

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. TASK ORDER IN SUPPORT OF TECHNICAL SERVICE MEMORANDUM (TSM) GA-ASI 21-007 DROP 3, "GRAY EAGLE POST PRODUCTION SOFTWARE SUPPORT (PPSS) 2021 DROP 3", DATED 30 JULY 2021.

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $13.9 million.

What is the period of performance?

Start: 2021-09-23. End: 2023-10-20.

What is General Atomics Aeronautical Systems, Inc.'s track record with the Gray Eagle program?

General Atomics Aeronautical Systems, Inc. (GA-ASI) is the original designer and manufacturer of the Gray Eagle Unmanned Aircraft System (UAS). Their track record with the program is extensive, encompassing development, production, and sustainment. This sole-source contract for post-production software support (PPSS) is a continuation of their integral role in maintaining the platform's operational capabilities. GA-ASI's deep institutional knowledge and proprietary access to the Gray Eagle's software architecture make them a logical, albeit non-competitively selected, provider for such specialized support services. Their history with the platform suggests a strong understanding of its technical requirements and potential issues.

How does the $13.9M value compare to similar software support contracts for UAS platforms?

Directly comparing the $13.9 million value of this specific task order (GA-ASI 21-007 DROP 3) to similar software support contracts for other UAS platforms is challenging due to several factors. Firstly, the Gray Eagle is a specific type of medium-altitude, long-endurance UAS, and its software complexity and support needs may differ significantly from smaller tactical drones or larger strategic platforms. Secondly, this contract was awarded on a sole-source basis, which inherently lacks the price discovery mechanism of competitive bidding. Therefore, a direct cost-per-year or cost-per-system comparison might not be indicative of true market value. To provide a robust comparison, one would need to analyze sole-source contracts for comparable platforms or competitive contracts for similar support services, adjusting for system complexity, contract duration, and scope of work.

What are the primary risks associated with this sole-source, cost-plus-fixed-fee contract?

The primary risks associated with this sole-source, cost-plus-fixed-fee (CPFF) contract are related to cost control and potential inefficiencies. Being a sole-source award, there is an inherent risk of paying a premium due to the lack of competitive pressure. The CPFF structure, while providing flexibility for R&D, carries the risk that the contractor may not be sufficiently incentivized to control costs, as the government reimburses allowable expenses plus a fixed fee. This could lead to cost overruns if the contractor's estimates are inaccurate or if scope creep occurs without adequate oversight. Additionally, reliance on a single vendor for critical software support can create vendor lock-in and reduce the government's leverage in future negotiations.

How effective is the cost-plus-fixed-fee structure in ensuring value for money in R&D contracts?

The effectiveness of the Cost-Plus-Fixed-Fee (CPFF) structure in ensuring value for money for R&D contracts is a subject of ongoing debate and depends heavily on contract administration. On the positive side, the fixed fee provides the contractor with a predictable profit margin, which can encourage them to undertake high-risk, innovative R&D projects that might not be feasible under other contract types. It also allows for flexibility in scope, which is often necessary in R&D where requirements can evolve. However, the 'cost-plus' element means the government bears the risk of cost overruns. Value for money is maximized when the government exercises rigorous oversight, clearly defines milestones, and ensures that the fixed fee is reasonable relative to the effort and risk involved. Without strong oversight, CPFF contracts can lead to inflated costs and reduced incentive for efficiency.

What are the historical spending patterns for Gray Eagle software support?

Analyzing historical spending patterns for Gray Eagle software support requires access to detailed contract databases beyond the single task order provided. However, it's reasonable to infer that spending on software support for a complex, long-serving platform like the Gray Eagle would be consistent and potentially increasing over its lifecycle. Initial support costs might be lower, but as the system ages, software updates, cybersecurity patches, and integration with new systems often necessitate more intensive and costly support. The fact that this is 'DROP 3' of a 2021 task order suggests a recurring need for such support, likely funded annually or through multi-year contracts. Without broader data, it's difficult to establish specific trends, but the nature of defense systems implies sustained investment in software sustainment.

What are the implications of the contract's duration (757 days) for long-term sustainment?

The contract duration of 757 days (approximately two years) for post-production software support indicates a significant, planned need for ongoing maintenance and updates for the Gray Eagle UAS. This duration suggests that the software is critical to the platform's operations and requires continuous attention beyond initial development or deployment phases. For long-term sustainment, such contracts are essential to address evolving threats, incorporate new functionalities, ensure cybersecurity, and maintain compatibility with other systems. A duration of this length also implies a degree of stability in the support requirements, but it necessitates careful management to ensure that the contractor remains efficient and that the government is not locked into potentially suboptimal terms for an extended period without review.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

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: $14,214,413

Exercised Options: $14,214,413

Current Obligation: $13,916,171

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q15D0003

IDV Type: IDC

Timeline