DoD's $195M contract for Unmanned Aircraft System support awarded to General Atomics Aeronautical Systems, Inc

Contract Overview

Contract Amount: $195,103,402 ($195.1M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-12-15

End Date: 2022-02-28

Contract Duration: 1,901 days

Daily Burn Rate: $102.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BASIC CONTRACT W58RGZ-17-C-0035 IS TO PROVIDE CONTRACT LOGISTICAL SERVICES (CLS) FOR THE WARRIOR A AND BLOCK 0 SYSTEMS REQUIREMENT WITHIN THE UNMANNED AIRCRAFT SYSTEM AND PROVIDE SUSTAINMENT SUPPORT AND MAINTENANCE SUPPORT OF SUPPLIES AND EQUIPMENT AT TWO SITES IN CONTIGUOUS UNITED STATES AND SUPPORT OF MULTIPLE OUTSIDE CONTIGUOUS UNITED STATES SITES INCLUDE SUSTAINING SUPPORT FOR DEPOT OPERATIONS, SUPPORT EQUIPMENT TO ASSIST ON SITE FIELD SERVICE REPRESENTATIVES AND ORIGINAL EQUIPMENT MANUFACTURER MAINTENANCE TO THE WARRIOR CONTRACT FOR THE SHADOW TACTICAL UNMANNED AIRCRAFT SYSTEM.

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $195.1 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: BASIC CONTRACT W58RGZ-17-C-0035 IS TO PROVIDE CONTRACT LOGISTICAL SERVICES (CLS) FOR THE WARRIOR A AND BLOCK 0 SYSTEMS REQUIREMENT WITHIN THE UNMANNED AIRCRAFT SYSTEM AND PROVIDE SUSTAINMENT SUPPORT AND MAINTENANCE SUPPORT OF SUPPLIES AND EQUIPMENT AT TWO SITES IN CONTIGUOUS UNIT… Key points: 1. Contract provides comprehensive logistical, sustainment, and maintenance support for the Warrior A and Block 0 Unmanned Aircraft Systems. 2. Services extend to both contiguous and outside contiguous United States locations, including depot operations and field support. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not carefully managed. 4. Awarded as a sole-source contract, raising questions about potential lack of competitive pricing. 5. The duration of the contract is substantial, spanning over 1900 days, indicating long-term reliance on the contractor. 6. The contract value is significant, reflecting the complexity and scope of supporting advanced unmanned aircraft systems.

Value Assessment

Rating: fair

The contract value of $195 million for logistical and sustainment support of unmanned aircraft systems appears substantial. Without specific benchmarks for similar CLS contracts for UAS, a direct value-for-money assessment is challenging. However, the Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation, as the contractor is reimbursed for allowable costs plus a fixed fee. This necessitates robust oversight to ensure costs remain reasonable and that the fixed fee adequately compensates the contractor for the effort without excessive profit.

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 potential offerors. This approach is typically justified when only one responsible source can provide the required supplies or services. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple companies had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The government's ability to negotiate the best possible price is limited in a sole-source scenario.

Public Impact

The primary beneficiaries are the U.S. Army's Unmanned Aircraft System programs, ensuring operational readiness and effectiveness of the Warrior A and Block 0 systems. Services delivered include critical logistical support, maintenance, sustainment, depot operations, and field service representative assistance. The geographic impact covers multiple sites within the contiguous United States and extends to support for operations outside the U.S. Workforce implications include the potential for skilled technical and logistical personnel employed by General Atomics Aeronautical Systems, Inc. and its subcontractors.

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 (CPFF) contract type can incentivize cost overruns if not closely monitored.
Long contract duration (over 1900 days) requires sustained oversight to ensure continued value and performance.
Lack of publicly available performance metrics makes it difficult to assess contractor efficiency and effectiveness.
Limited transparency on specific cost breakdowns within the CPFF structure.

Positive Signals

Contract provides essential support for critical military unmanned aircraft systems, ensuring operational capability.
The contractor, General Atomics Aeronautical Systems, Inc., is a recognized leader in unmanned aerial vehicle technology.
The contract covers a broad scope of services, indicating a comprehensive approach to sustainment.
Support is provided across multiple domestic and international locations, demonstrating logistical reach.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically supporting unmanned aerial systems (UAS). The UAS market is a rapidly growing segment of the aerospace and defense industry, driven by increasing demand for intelligence, surveillance, and reconnaissance (ISR) capabilities. General Atomics Aeronautical Systems, Inc. is a major player in this market. Comparable spending benchmarks for UAS sustainment contracts are often proprietary or vary significantly based on system complexity and service scope, making direct comparisons difficult without more granular data.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there is no explicit mention of small business set-asides. This suggests that small businesses were likely not a primary focus of this specific contract award. Subcontracting opportunities for small businesses may exist within the execution of this contract, but without further details on subcontracting plans or performance, their impact on the small business ecosystem is unclear. The contract's large value could potentially offer significant subcontracting potential if actively pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor allowable costs and ensure the fixed fee remains appropriate. Accountability measures would be tied to performance metrics and delivery schedules outlined in the contract. Transparency is often limited for defense contracts of this nature, but contract award data is publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Unmanned Aircraft Systems (UAS) Procurement
Aerospace and Defense Logistics Support
Military Aviation Maintenance Services
Intelligence, Surveillance, and Reconnaissance (ISR) Platforms

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding
Potential for cost overruns
Limited transparency on specific cost elements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $195.1 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. BASIC CONTRACT W58RGZ-17-C-0035 IS TO PROVIDE CONTRACT LOGISTICAL SERVICES (CLS) FOR THE WARRIOR A AND BLOCK 0 SYSTEMS REQUIREMENT WITHIN THE UNMANNED AIRCRAFT SYSTEM AND PROVIDE SUSTAINMENT SUPPORT AND MAINTENANCE SUPPORT OF SUPPLIES AND EQUIPMENT AT TWO SITES IN CONTIGUOUS UNITED STATES AND SUPPORT OF MULTIPLE OUTSIDE CONTIGUOUS UNITED STATES SITES INCLUDE SUSTAINING SUPPORT FOR DEPOT OPERATIONS, SUPPORT EQUIPMENT TO ASSIST ON SITE FIELD SERVICE REPRESENTATIVES AND ORIGINAL EQUIPMENT MANUFACTU

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 $195.1 million.

What is the period of performance?

Start: 2016-12-15. End: 2022-02-28.

What is the track record of General Atomics Aeronautical Systems, Inc. with similar sole-source contracts for UAS sustainment?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a well-established track record in the development and production of unmanned aircraft systems, including the Predator and Reaper series. They are a significant sole-source provider for many of their systems due to proprietary technology and unique capabilities. While specific data on past sole-source sustainment contracts for the Warrior system is not detailed here, GA-ASI's history suggests they possess the necessary expertise and infrastructure. However, the lack of competition in sole-source awards necessitates careful review of pricing and performance history to ensure fair value and prevent potential cost escalations over the contract's lifecycle.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar services, and what are the associated risks?

Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs plus a predetermined fixed fee. This structure is often used when the scope of work is not precisely defined or involves significant uncertainty, as is common in complex defense systems. Compared to fixed-price contracts, CPFF offers less cost certainty for the government but can be more flexible. The primary risk is that the contractor may have less incentive to control costs, as their profit (the fixed fee) is not directly tied to cost savings. This necessitates robust government oversight, including detailed cost audits and performance monitoring, to ensure that costs are reasonable and the contractor is performing efficiently.

What are the key performance indicators (KPIs) used to measure the success of this contract, and how is performance monitored?

Specific Key Performance Indicators (KPIs) for this contract are not publicly detailed in the provided data. However, typical KPIs for logistical and sustainment contracts of this nature would likely include aircraft availability rates, mean time between failures (MTBF), response times for field support, on-time delivery of parts and services, and adherence to maintenance schedules. Performance monitoring would be conducted by the Department of the Army's program management office, likely through regular progress reports from the contractor, site visits, technical reviews, and potentially independent government cost-estimating efforts. Contractual remedies would be available for failure to meet performance standards.

What is the historical spending trend for logistical and sustainment support of the Warrior UAS program prior to this contract?

Historical spending data specifically for the logistical and sustainment support of the Warrior UAS program prior to this contract (W58RGZ-17-C-0035) is not provided. This contract, awarded in late 2016 with an end date in early 2022, represents a significant investment. To understand historical trends, one would need to analyze previous contracts related to the Warrior system's sustainment, potentially including earlier versions or different support elements. Analyzing trends would involve looking at contract values, durations, and contract types over time to identify patterns in spending and support strategies for this specific UAS platform.

Are there any known issues or controversies associated with General Atomics Aeronautical Systems, Inc. regarding contract performance or pricing in the past?

General Atomics Aeronautical Systems, Inc. (GA-ASI) is a major defense contractor, and like many large companies in this sector, it has faced scrutiny regarding contract pricing and performance on various programs over the years. Specific controversies directly linked to the Warrior UAS sustainment contract are not highlighted in the provided data. However, general concerns sometimes raised about major defense contractors include allegations of cost overruns, schedule delays, and pricing disputes, particularly on sole-source or complex development programs. Independent reviews and oversight bodies like the Government Accountability Office (GAO) and Inspectors General often examine these issues. GA-ASI's overall reputation is strong in its niche, but vigilance regarding cost control and performance is standard for all large defense contracts.

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: W58RGZ15R0208

Offers Received: 1

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, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $226,039,832

Exercised Options: $195,103,402

Current Obligation: $195,103,402

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $4,559,826

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline