DoD Awards $62.3M for Gray Eagle Engineering Services to General Atomics, Sole Source

Contract Overview

Contract Amount: $62,374,609 ($62.4M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-05-20

End Date: 2023-09-30

Contract Duration: 1,594 days

Daily Burn Rate: $39.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: GRAY EAGLE ENGINEERING SERVICES

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $62.4 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: GRAY EAGLE ENGINEERING SERVICES Key points: 1. Significant contract value of $62.3M awarded. 2. Sole-source award indicates limited competition. 3. Potential risk associated with single-vendor reliance. 4. Aircraft Manufacturing sector spending benchmark. 5. Contract duration spans over 4 years.

Value Assessment

Rating: questionable

The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to cost overruns if not managed carefully. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to market rates for similar engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may result in higher costs for the government compared to a fully competed contract.

Taxpayer Impact: The lack of competition for this $62.3M contract raises concerns about taxpayer value, as the government may be paying a premium without exploring potentially more cost-effective alternatives.

Public Impact

Taxpayers may be overpaying due to the sole-source nature of the award. Reliance on a single contractor for critical engineering services could pose a supply chain risk. The long contract duration suggests a sustained need for these services, highlighting the importance of competitive pricing. Lack of transparency in the procurement process could undermine public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of small business participation indicated
Long contract duration

Positive Signals

Supports critical aircraft manufacturing capabilities
Long-term engagement with a known contractor

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, which is a significant area of defense spending. Benchmarks for engineering services in this sector can vary widely based on specialization and contract type.

Small Business Impact

The data indicates that small business participation was not a factor in this award (ss: false, sb: false). This sole-source contract did not leverage small businesses, potentially missing opportunities for innovation and economic impact.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets requirements. Accountability for cost control within the CPFF structure is crucial.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition and potentially increases costs.
Cost Plus Fixed Fee contract type carries inherent cost overrun risks.
Lack of small business participation noted.
Long contract duration increases exposure to potential performance issues.
Absence of competitive pricing benchmarks makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.4 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. GRAY EAGLE ENGINEERING SERVICES

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 $62.4 million.

What is the period of performance?

Start: 2019-05-20. End: 2023-09-30.

What specific justification was provided for the sole-source award of this $62.3M contract, and how does it align with FAR regulations for non-competitive procurements?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. This often occurs due to unique capabilities, proprietary technology, or urgent needs. The justification must be documented and approved according to Federal Acquisition Regulation (FAR) Part 6. Without the specific justification, it's impossible to assess its validity or adherence to regulatory requirements, which is critical for ensuring fair and open competition principles are upheld.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract incentivize General Atomics to control costs and ensure efficient delivery of engineering services?

CPFF contracts aim to provide flexibility for complex projects where costs are uncertain. The 'cost plus' portion covers allowable costs, while the 'fixed fee' represents the contractor's profit. Incentives for cost control are limited, as the government bears most of the cost risk. While the fixed fee provides some profit certainty, it doesn't strongly motivate cost reduction beyond what's necessary to meet performance standards. Effective oversight is key to managing potential cost escalations.

What are the potential long-term implications of awarding a sole-source, multi-year contract for critical aircraft engineering services to a single provider?

Sole-source, multi-year contracts can lead to vendor lock-in, reduced bargaining power for the government, and stifle innovation from potential competitors. While it ensures continuity with a known entity, it also creates a dependency that could be problematic if the contractor underperforms or faces financial instability. This approach may also prevent the government from benefiting from potentially lower prices or more advanced solutions that could emerge from a competitive environment.

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

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Atomics

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: $62,374,609

Exercised Options: $62,374,609

Current Obligation: $62,374,609

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $1,331,981

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ18D0138

IDV Type: IDC

Timeline