DoD awards $76M contract for Aircraft Manufacturing to General Atomics Aeronautical Systems, Inc

Contract Overview

Contract Amount: $75,988,407 ($76.0M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-02-12

End Date: 2011-02-11

Contract Duration: 364 days

Daily Burn Rate: $208.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: WARRIOR A/O CLS

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $76.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: WARRIOR A/O CLS Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price efficiencies and market responsiveness. 3. A single bid was received, indicating limited market engagement or potential barriers to entry for other firms. 4. The contract duration is one year, suggesting a focused scope of work or a bridge to a larger effort. 5. The North American Industry Classification System (NAICS) code 336411 points to a specialized segment of aircraft manufacturing. 6. The contract was awarded by the Department of the Army, indicating a specific military aviation requirement.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without detailed cost breakdowns and comparison to similar sole-source procurements. The cost-plus-fixed-fee structure necessitates close oversight to ensure costs remain reasonable and do not exceed initial estimates. Given the lack of competition, it's difficult to ascertain if the fixed fee represents a fair profit margin or if the overall cost basis was optimized.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competitive bidding. This typically occurs when only one responsible source is available or authorized by statute. The absence of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.

Taxpayer Impact: Taxpayers may not be receiving the best value due to the lack of competitive pressure, potentially leading to higher costs than if multiple bids were considered.

Public Impact

The primary beneficiary is the Department of Defense, specifically the U.S. Army, which will receive aircraft manufacturing services. The services delivered are related to aircraft manufacturing, likely supporting specific aviation platforms or programs. The geographic impact is centered in California, where General Atomics Aeronautical Systems, Inc. is located. Workforce implications include employment opportunities within General Atomics Aeronautical Systems, Inc. and its supply chain in the aerospace manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Cost-plus-fixed-fee structure requires robust cost monitoring to prevent overruns.
Limited competition may indicate barriers to entry or a lack of market interest in this specific requirement.

Positive Signals

Contract awarded to a known entity in the aerospace industry (General Atomics Aeronautical Systems, Inc.).
Specific NAICS code suggests a focused and specialized manufacturing capability.
Contract duration of one year allows for periodic reassessment of requirements and market conditions.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, significant R&D investment, and complex supply chains. This contract falls under NAICS code 336411, which covers the manufacturing of aircraft. Spending in this sector is often driven by defense procurement, with major players like General Atomics Aeronautical Systems, Inc. holding significant market share. Benchmarking requires comparison to similar sole-source awards for specialized aircraft components or platforms.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the specialized industry, it is unlikely that significant subcontracting opportunities for small businesses will be mandated unless specified by the prime contractor. Further analysis would be needed to determine if any small business subcontracting plan was included.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the cost-plus-fixed-fee terms, requiring detailed reporting and auditing of costs incurred. Transparency may be limited due to the sole-source nature, but contract award data is publicly available.

Related Government Programs

Department of Defense Aircraft Procurement
Aerospace Manufacturing Contracts
General Atomics Aeronautical Systems, Inc. Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. WARRIOR A/O CLS

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 $76.0 million.

What is the period of performance?

Start: 2010-02-12. End: 2011-02-11.

What is the track record of General Atomics Aeronautical Systems, Inc. with sole-source defense contracts?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a significant history of contracting with the U.S. Department of Defense, particularly for unmanned aerial systems (UAS) and related technologies. While many of their contracts are competed, GA-ASI has also been awarded sole-source contracts, often for specialized systems, upgrades, or sustainment services where they are the sole provider or have unique capabilities. Analyzing their past sole-source awards can provide insight into pricing structures, performance, and the justification for non-competitive procurements. Publicly available data suggests a pattern of substantial contract values, reflecting the complexity and advanced nature of their products. However, the specific terms and justifications for each sole-source award would need individual review to assess value for money and adherence to procurement regulations.

How does the cost-plus-fixed-fee (CPFF) pricing structure compare to other contract types for aircraft manufacturing?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used when the scope of work is not precisely defined or when there is significant uncertainty in the cost of performance. In aircraft manufacturing, CPFF can be employed for research and development, prototype creation, or modifications where the final costs are difficult to estimate upfront. Compared to fixed-price contracts, CPFF shifts more cost risk to the government, as the contractor is reimbursed for all allowable costs plus a predetermined fixed fee. While this can facilitate innovation and allow for flexibility, it necessitates robust government oversight to control costs and prevent contractor inefficiencies from inflating the final price. Fixed-price contracts, conversely, offer greater price certainty for the government but may require more detailed initial specifications and can disincentivize scope changes or innovation.

What are the typical justifications for sole-source awards in the aircraft manufacturing sector?

Sole-source awards in the aircraft manufacturing sector are typically justified under specific circumstances outlined in federal acquisition regulations. Common reasons include: 1) Unique capabilities or proprietary technology possessed by only one contractor, making them the only responsible source. 2) Urgent and compelling needs where competition would cause unacceptable delays. 3) Follow-on contracts for sustainment, upgrades, or spare parts for existing platforms where the original manufacturer is the only viable option. 4) Small business set-asides where only one small business is capable. 5) When only one bid is received after a full and open competition, and the government determines it is in its best interest to award to that single bidder. For a contract like this, the justification would likely stem from unique manufacturing capabilities or proprietary technology related to specific aircraft systems.

What is the significance of NAICS code 336411 in the context of federal spending?

NAICS code 336411, 'Aircraft Manufacturing,' signifies federal spending directed towards the production of fixed-wing aircraft, helicopters, and related components. This code encompasses a highly specialized and capital-intensive segment of the manufacturing industry, dominated by a few large prime contractors, particularly in the defense sector. Federal spending under this code often supports national security objectives, including the development and procurement of military aircraft. It also includes civilian aircraft manufacturing, though defense spending is a significant driver. The high concentration of spending and the specialized nature of the industry mean that contracts under this code can represent substantial investments and often involve complex technological requirements and long production cycles.

How does the 'aw' field (DCA) typically relate to contract awards?

The 'aw' field, indicated as 'DCA' in this data, likely refers to the Awarding Agency or Contracting Activity. In this context, DCA might stand for a specific contracting office or directorate within the Department of Defense or Department of the Army responsible for executing this particular procurement. Contracting activities are the organizational units that award and administer contracts. Identifying the specific contracting activity can sometimes provide further context on the type of procurement, the agency's procurement priorities, and the administrative procedures followed. It helps in tracing the contract's lifecycle and understanding which part of the government bureaucracy managed its execution.

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

Solicitation ID: W58RGZ10R0144

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Atomics (UEI: 859181984)

Address: 14200 KIRKHAM WAY, POWAY, CA, 48

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: $75,988,407

Exercised Options: $75,988,407

Current Obligation: $75,988,407

Contract Characteristics

Cost or Pricing Data: NO

Timeline