Army awards $52.1M for MQ-1C Gray Eagle aircraft and support equipment to General Atomics

Contract Overview

Contract Amount: $52,149,547 ($52.1M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-09-13

End Date: 2025-09-30

Contract Duration: 2,574 days

Daily Burn Rate: $20.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 3 LOTS OF MQ-1C GRAY EAGLE EXTENDED RANGE AIRCRAFT UNIQUE INITIAL SPARES AND 3 LOTS OF GROUND SUPPORT EQUIPMENT (GSE)

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $52.1 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: 3 LOTS OF MQ-1C GRAY EAGLE EXTENDED RANGE AIRCRAFT UNIQUE INITIAL SPARES AND 3 LOTS OF GROUND SUPPORT EQUIPMENT (GSE) Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of 2574 days suggests a long-term need for these assets. 3. The contract includes initial spares and ground support equipment, indicating a comprehensive procurement. 4. The aircraft manufacturing sector is characterized by high barriers to entry and specialized production. 5. No small business set-aside was applied, suggesting the prime contractor is a large entity. 6. The firm-fixed-price contract type shifts cost risk to the contractor.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized equipment involved. Without competitive bids, it's difficult to ascertain if the $52.1 million represents the best possible price. However, the inclusion of initial spares and ground support equipment suggests a holistic approach to equipping the aircraft, which could offer some value by ensuring immediate operational readiness. Further analysis would require access to cost breakdowns and comparisons with similar sole-source procurements of advanced unmanned aerial systems.

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 typically occurs when a specific contractor possesses unique capabilities or intellectual property essential for the requirement, or in cases of urgent need. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs for the government compared to a competed procurement.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. The government did not benefit from potential cost savings that could have arisen from multiple vendors vying for the contract.

Public Impact

The primary beneficiaries are the U.S. Army, which will receive advanced unmanned aerial reconnaissance and strike capabilities. The contract delivers MQ-1C Gray Eagle Extended Range aircraft, essential for intelligence, surveillance, and reconnaissance (ISR) missions. It also provides critical ground support equipment necessary for the operation and maintenance of these aircraft. The geographic impact is likely global, supporting military operations in various theaters of operation. Workforce implications include the need for trained pilots, sensor operators, and maintenance personnel for the Gray Eagle system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
High value of contract could indicate significant investment with potential for cost overruns if not managed closely.
Long contract duration requires sustained oversight to ensure performance and value.
Lack of small business participation may limit opportunities for smaller innovative firms in this specialized sector.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor, potentially protecting the government from unexpected cost increases.
Procurement includes essential support equipment, ensuring operational readiness upon delivery.
General Atomics is a known producer of this type of unmanned aerial system, suggesting established expertise.
The contract is for a specific, advanced capability (MQ-1C Gray Eagle ER) critical for modern military operations.

Sector Analysis

The Unmanned Aerial Vehicle (UAV) market, a subset of the broader aerospace and defense industry, is characterized by rapid technological advancement and significant government investment. The MQ-1C Gray Eagle is a well-established platform for intelligence, surveillance, reconnaissance, and light attack missions. Spending in this sector is driven by evolving military requirements for persistent ISR and precision strike capabilities. Comparable spending benchmarks would involve other large UAV procurements or upgrades for similar platforms, often involving multi-year contracts with values in the tens to hundreds of millions of dollars.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by the 'sb' field being false. The prime contractor, General Atomics Aeronautical Systems, Inc., is a large defense contractor. This suggests that the primary contract award did not prioritize small business participation. However, it is possible that the prime contractor may engage small businesses as subcontractors to fulfill portions of the contract, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, with specific oversight likely managed by the Department of the Army. Accountability measures are embedded within the firm-fixed-price contract terms, requiring the contractor to deliver specified goods and services. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

MQ-1 Predator Program
MQ-9 Reaper Program
Unmanned Aerial Systems Procurement
Defense Intelligence, Surveillance, and Reconnaissance (ISR) Platforms
Aerospace Manufacturing Contracts

Risk Flags

Sole-source procurement
Lack of competition
High contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.1 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. 3 LOTS OF MQ-1C GRAY EAGLE EXTENDED RANGE AIRCRAFT UNIQUE INITIAL SPARES AND 3 LOTS OF GROUND SUPPORT EQUIPMENT (GSE)

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 $52.1 million.

What is the period of performance?

Start: 2018-09-13. End: 2025-09-30.

What is the track record of General Atomics Aeronautical Systems, Inc. with the MQ-1C Gray Eagle program?

General Atomics Aeronautical Systems, Inc. (GA-ASI) is the original developer and manufacturer of the MQ-1C Gray Eagle program. They have a long-standing relationship with the U.S. Army for this platform, having supplied numerous aircraft and support systems over the years. Their track record includes delivering these advanced unmanned aerial systems to meet evolving military requirements for ISR and strike capabilities. GA-ASI is known for its expertise in UAV technology and has consistently been a primary provider for the Gray Eagle, indicating a strong, albeit sole-source, partnership.

How does the $52.1 million award compare to previous procurements of the MQ-1C Gray Eagle?

Comparing this specific $52.1 million award requires access to historical contract data for the MQ-1C Gray Eagle program. However, given the nature of defense procurement for complex systems like UAVs, awards can vary significantly based on the quantity of aircraft, scope of support equipment, and specific configurations. Previous awards might have been for different quantities or included different types of services (e.g., training, sustainment). Without direct comparative data for similar lots of aircraft and initial spares, it's difficult to definitively state if this award represents a higher or lower cost per unit or overall value compared to historical procurements. The sole-source nature also complicates direct price comparisons.

What are the primary risks associated with this sole-source contract for the MQ-1C Gray Eagle?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive bidding. Without competing vendors, the government may not achieve the most cost-effective solution. Another risk is contractor dependency; the Army becomes reliant on General Atomics for sustainment, upgrades, and future procurements of this specific platform. Furthermore, if there are unforeseen technical issues or delays, the sole-source nature could limit the government's leverage in seeking alternative solutions or remedies compared to a competitively awarded contract.

How effective is the MQ-1C Gray Eagle platform in fulfilling its intended military missions?

The MQ-1C Gray Eagle Extended Range (ER) is designed to provide persistent intelligence, surveillance, and reconnaissance (ISR) capabilities, as well as precision strike support. It has been operationally deployed by the U.S. Army in various theaters, demonstrating its effectiveness in gathering critical battlefield information and engaging targets. Its longer endurance and enhanced payload capacity compared to earlier variants allow for extended mission coverage. While specific mission effectiveness metrics are often classified, the continued procurement and deployment of the Gray Eagle by the Army suggest it remains a valuable and effective asset for fulfilling its intended roles in modern warfare.

What are the historical spending patterns for the MQ-1C Gray Eagle program within the Department of Defense?

Historical spending on the MQ-1C Gray Eagle program within the Department of Defense has been substantial, reflecting its role as a key ISR and strike asset. Over its lifecycle, the Army has invested billions of dollars in acquiring the aircraft, associated ground control stations, data links, and support services. Spending typically occurs through multi-year procurement contracts, sustainment contracts, and modernization efforts. The total program cost has evolved over time with upgrades and fleet expansion. Analyzing specific annual spending requires detailed budget and contract award data, but the program represents a significant and ongoing investment in unmanned aviation capabilities for the Army.

What is the significance of the 'initial spares and ground support equipment' included in this award?

The inclusion of 'initial spares and ground support equipment' (GSE) in this $52.1 million award is significant because it ensures the aircraft are operationally ready from the outset. Initial spares are crucial for immediate maintenance and repair needs, minimizing downtime and maximizing aircraft availability. Ground support equipment, such as launch and recovery systems, maintenance tools, and power units, is essential for the deployment, operation, and upkeep of the Gray Eagle aircraft. Bundling these items with the aircraft procurement streamlines the acquisition process and ensures the Army receives a complete, deployable system rather than just the airframes.

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: W58RGZ18R0199

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $52,149,547

Exercised Options: $52,149,547

Current Obligation: $52,149,547

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $4,407,987,820

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline