DoD's $123.5M Engineering Services Contract with General Atomics: A Cost Plus Fixed Fee Award

Contract Overview

Contract Amount: $123,543,981 ($123.5M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-01-31

End Date: 2010-06-30

Contract Duration: 881 days

Daily Burn Rate: $140.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AADSF

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $123.5 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: AADSF Key points: 1. The contract awarded to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for Engineering Services represents a significant investment. 2. The 'NOT COMPETED' status raises questions about the procurement process and potential missed opportunities for competitive pricing. 3. The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not carefully managed. 4. The sector is dominated by large, established defense contractors, making it challenging for smaller firms to compete.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure, while common in complex projects, offers less incentive for cost control compared to fixed-price contracts. Benchmarking against similar engineering services contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This limits price discovery and may result in higher costs for the government compared to a fully competitive process.

Taxpayer Impact: The lack of competition could lead to taxpayers paying a premium for these engineering services.

Public Impact

Taxpayers may be paying more than necessary due to the non-competitive award. The duration and cost of the contract suggest a critical need for these engineering services within the Department of the Army. The specific engineering services provided are not detailed, making it hard to assess their direct impact on public programs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee contract type
Long contract duration

Positive Signals

Awarded to a known entity in the defense sector
Contract addresses specific engineering needs

Sector Analysis

Engineering services within the defense sector are highly specialized and often involve complex, long-term projects. Spending benchmarks vary widely based on the specific nature of the engineering required, but this contract's value is substantial.

Small Business Impact

The 'NOT COMPETED' status and the nature of the services suggest this contract was likely not structured to encourage small business participation. Large defense contracts often favor established prime contractors.

Oversight & Accountability

The Cost Plus Fixed Fee structure necessitates robust oversight to ensure costs are reasonable and the fixed fee is justified. The Department of Defense's internal audit and contract management processes are crucial here.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns with CPFF
Limited transparency on specific services
High contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $123.5 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. AADSF

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 Army).

What is the total obligated amount?

The obligated amount is $123.5 million.

What is the period of performance?

Start: 2008-01-31. End: 2010-06-30.

What specific engineering services were procured under this contract, and how do they align with the Army's strategic objectives?

The provided data indicates 'Engineering Services' under NAICS code 541330. However, the specific nature of these services (e.g., design, testing, research, development) is not detailed. Understanding the precise scope is crucial to assess their alignment with the Department of the Army's mission and whether alternative, potentially more cost-effective solutions were overlooked.

What justification was provided for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The 'NOT COMPETED' designation implies a sole-source award. The justification for this would typically involve factors like unique capabilities, urgent need, or lack of other sources. Without this justification, it's difficult to assess if fair and reasonable pricing was achieved, as competitive pressure was absent.

How effectively was the Cost Plus Fixed Fee structure managed to control costs and ensure value for the taxpayer over the contract's duration?

The CPFF structure requires diligent oversight to prevent cost escalation. Assessing the effectiveness involves reviewing the government's cost audits, change order management, and final negotiated costs against initial estimates. The 'br' (budgeted rate) of $140,232 suggests an estimated cost, but the final expenditure relative to this benchmark is key.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $123,543,981

Exercised Options: $123,543,981

Current Obligation: $123,543,981

Contract Characteristics

Cost or Pricing Data: NO

Timeline