DoD Awards $325.7M for Gray Eagle LRIP II to General Atomics, Sole Source

Contract Overview

Contract Amount: $325,711,659 ($325.7M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-04-08

End Date: 2023-08-22

Contract Duration: 4,519 days

Daily Burn Rate: $72.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: GRAY EAGLE LOW RATE INITIAL PRODUCTION II

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $325.7 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: GRAY EAGLE LOW RATE INITIAL PRODUCTION II Key points: 1. Significant contract value of $325.7 million awarded. 2. Sole-source award to General Atomics Aeronautical Systems, Inc. raises competition concerns. 3. Contract duration of 4519 days suggests long-term program commitment. 4. Focus on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' indicates specialized needs.

Value Assessment

Rating: questionable

The contract value of $325.7 million for LRIP II is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar aircraft parts contracts.

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 lack of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive pressure.

Public Impact

Taxpayers may be overpaying for critical aircraft components due to a lack of competition. The long contract duration could indicate a reliance on a single supplier for an extended period. The specific nature of the parts manufactured could impact the operational readiness of military aircraft.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration

Positive Signals

Awarded to a known entity in the aerospace sector
Supports critical defense capabilities

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. Spending benchmarks in this area are highly variable based on technology and program phase.

Small Business Impact

The contract was awarded to General Atomics Aeronautical Systems, Inc., a large business. There is no indication of small business participation in this specific award, suggesting limited opportunities for smaller enterprises.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential cost overruns. Accountability for performance and cost management is crucial given the lack of competition.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition and price discovery.
Potential for higher costs to taxpayers due to lack of competition.
Long contract duration may indicate vendor lock-in.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $325.7 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. GRAY EAGLE LOW RATE INITIAL PRODUCTION II

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 $325.7 million.

What is the period of performance?

Start: 2011-04-08. End: 2023-08-22.

What is the justification for the sole-source award, and has a market research report been conducted to confirm the lack of viable alternatives?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of other qualified sources. A thorough market research report is essential to validate these claims and ensure that no other vendors could meet the requirements. Without this, the government risks not obtaining competitive pricing.

How does the per-unit cost of these aircraft parts compare to similar components procured competitively by the DoD or other agencies?

Benchmarking the per-unit cost against competitively procured similar items is crucial for assessing value. If this contract's pricing is significantly higher, it indicates potential overpayment due to the sole-source nature. Detailed cost analysis and comparison with industry standards are necessary to determine if the price is fair and reasonable.

What are the performance metrics and delivery schedules, and how will they be monitored to ensure effective program execution?

Effective program execution relies on clearly defined performance metrics and robust monitoring. For this contract, the Army must establish stringent oversight mechanisms to track delivery schedules and quality standards. Regular performance reviews and clear communication channels with General Atomics are vital to ensure the program meets its objectives and taxpayer funds are used efficiently.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ11R0058

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

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: $325,711,659

Exercised Options: $325,711,659

Current Obligation: $325,711,659

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline