DoD's $78M replenishment spares contract for aircraft manufacturing awarded to General Atomics Aeronautical Systems, Inc

Contract Overview

Contract Amount: $78,058,119 ($78.1M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-09-29

End Date: 2013-06-30

Contract Duration: 640 days

Daily Burn Rate: $122.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PROGRAM OF RECORD REPLENISHMENT SPARES

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $78.1 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: PROGRAM OF RECORD REPLENISHMENT SPARES Key points: 1. Value for money is difficult to assess due to the lack of competition and limited transparency on cost drivers. 2. The contract was not competed, raising questions about potential price overruns and missed opportunities for cost savings. 3. Risk indicators include the sole-source nature of the award and the cost-plus-fixed-fee pricing structure, which can incentivize higher costs. 4. Performance context is limited, as the contract is for replenishment spares, suggesting ongoing operational needs rather than new development. 5. The contract falls within the Aircraft Manufacturing sector, a critical area for defense readiness.

Value Assessment

Rating: questionable

The contract's value is difficult to benchmark due to its sole-source nature and the specific nature of replenishment spares. The cost-plus-fixed-fee (CPFF) structure, while allowing for flexibility, can lead to higher overall costs compared to fixed-price contracts if not managed rigorously. Without competitive bids, it's challenging to determine if the $78 million awarded represents a fair market price for the spares provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition limits price discovery and may result in higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium for these spares due to the absence of competitive bidding, which typically drives down prices.

Public Impact

The primary beneficiaries are the Department of the Army and potentially the end-users of the aircraft requiring these replenishment spares. The services delivered include the provision of essential spare parts for aircraft, ensuring operational readiness. The geographic impact is primarily within California, where General Atomics Aeronautical Systems, Inc. is located. Workforce implications include the potential for continued employment at General Atomics Aeronautical Systems, Inc. related to the manufacturing and supply of these spares.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost-plus-fixed-fee contract type can lead to cost overruns if not closely monitored.
Lack of transparency in cost breakdown for replenishment spares.

Positive Signals

Ensures availability of critical aircraft spares for defense operations.
Supports a key defense contractor, maintaining specialized manufacturing capabilities.

Sector Analysis

This contract operates within the broader Aircraft Manufacturing sector, specifically focusing on the supply of replenishment spares. This sector is characterized by high technological complexity, significant R&D investment, and often long production cycles. Comparable spending benchmarks for replenishment spares can vary widely depending on the specific aircraft platform and the criticality of the components. The total contract value of $78 million is moderate within the context of major defense procurement.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false indicates it is not a small business prime award. There is no explicit information on subcontracting plans for small businesses within the provided data, which could limit opportunities for the small business ecosystem in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring the contractor to provide detailed cost reporting. Transparency is limited due to the sole-source nature and the specific details of replenishment spares, but contract modifications and performance reports would be subject to internal government review and potentially Inspector General oversight if issues arise.

Related Government Programs

Aircraft Manufacturing
Defense Procurement
Replenishment Spares
Department of the Army Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.1 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. PROGRAM OF RECORD REPLENISHMENT SPARES

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 $78.1 million.

What is the period of performance?

Start: 2011-09-29. End: 2013-06-30.

What is the track record of General Atomics Aeronautical Systems, Inc. in delivering aircraft manufacturing components to the DoD?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a significant track record with the Department of Defense, particularly in the development and production of unmanned aerial systems (UAS) like the Predator and Reaper. They are a major defense contractor with extensive experience in aircraft design, manufacturing, and sustainment. Their work often involves complex systems integration and advanced technologies. While this specific contract is for replenishment spares, GA-ASI's broader history suggests a capability to produce and deliver critical components. However, the performance on this particular contract, especially given its sole-source nature, would require a deeper dive into specific delivery schedules, quality metrics, and cost performance data beyond the initial award information.

How does the $78 million contract value compare to similar replenishment spares contracts for aircraft?

Comparing the $78 million value of this replenishment spares contract requires context regarding the specific aircraft platform and the types of spares procured. Replenishment spares can range from minor components to major sub-assemblies. For high-value, complex aircraft platforms (e.g., fighter jets, large transport aircraft), annual spending on replenishment spares can easily reach tens or hundreds of millions of dollars. Without knowing the specific aircraft type and the criticality of the spares provided by General Atomics Aeronautical Systems, Inc., a direct comparison is difficult. However, $78 million is a substantial amount, suggesting these are likely critical or high-demand components for a significant defense asset.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for replenishment spares?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for replenishment spares are multifaceted. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated prices as the government lacks alternative sourcing options. Secondly, the CPFF structure, while providing flexibility, shifts much of the cost risk to the government. The contractor is reimbursed for allowable costs plus a fixed fee, which can create less incentive for cost control compared to fixed-price contracts. If cost estimation is inaccurate or if unforeseen issues arise, the total cost to the government can escalate significantly. For replenishment spares, ensuring timely delivery and quality is crucial for operational readiness, and any delays or quality issues under a sole-source CPFF arrangement can be particularly challenging to rectify.

What is the historical spending pattern for this specific program or similar replenishment spares for the Department of the Army?

The provided data indicates this contract (ID: DCA) was awarded on September 29, 2011, with an end date of June 30, 2013, and a value of $78,058,119. This suggests a specific period of replenishment for certain aircraft spares. To understand historical spending patterns, one would need to examine prior contracts for the same or similar spares for the specific aircraft platform, as well as subsequent contracts if the need persisted beyond 2013. Analyzing the duration (640 days) and the number of awards (1) provides a snapshot. A comprehensive view would involve aggregating spending data over several years to identify trends, seasonality, or significant spikes in demand for replenishment spares within the Army's aviation programs.

How does the contract's duration and value suggest the criticality or volume of the spares being procured?

The contract had a duration of 640 days (approximately 21 months) and a value of $78 million. This combination suggests a significant, but not indefinite, need for these replenishment spares. A duration of under two years for a contract of this value implies either a concentrated period of high demand or a steady, substantial requirement for parts that are either costly individually or needed in considerable quantities. It's not indicative of a long-term sustainment program that might span many years, but rather a focused effort to replenish a specific set of spares. The value suggests these are likely critical components for operational aircraft, where downtime due to lack of spares would be highly detrimental to mission readiness.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: HARDWARE AND ABRASIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ11R0223

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: $78,058,119

Exercised Options: $78,058,119

Current Obligation: $78,058,119

Contract Characteristics

Cost or Pricing Data: YES

Timeline