DoD Awards $29.9M for Gray Eagle Engineering Services to General Atomics, Raising Oversight Concerns

Contract Overview

Contract Amount: $29,889,395 ($29.9M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-05-27

End Date: 2023-08-31

Contract Duration: 1,191 days

Daily Burn Rate: $25.1K/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 $29.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: GRAY EAGLE ENGINEERING SERVICES Key points: 1. Significant contract value of $29.9 million awarded. 2. Sole-source award to General Atomics Aeronautical Systems, Inc. limits competition. 3. Potential oversight challenges due to cost-plus-fixed-fee contract type. 4. Aircraft manufacturing sector with implications for defense readiness.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, while allowing flexibility, can lead to higher costs compared to fixed-price contracts. Benchmarking against similar engineering services contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This significantly impacts price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The sole-source nature of this award may result in taxpayers paying a premium for these engineering services due to the absence of competitive pressure.

Public Impact

Taxpayers may be overpaying for specialized engineering services due to lack of competition. The Department of the Army's reliance on a single contractor could impact long-term cost-efficiency. Potential for reduced innovation and service quality without competitive market forces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of transparency in pricing

Positive Signals

Supports critical defense aircraft manufacturing
Long-term contract duration provides stability

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical area for national defense. Spending benchmarks in this specialized sector are often high due to complex R&D and production requirements.

Small Business Impact

The contract data indicates no specific set-aside for small businesses. This sole-source award to a large corporation like General Atomics suggests limited opportunities for small business participation.

Oversight & Accountability

The sole-source nature and cost-plus-fixed-fee structure warrant close oversight to ensure cost control and prevent potential overruns. Robust monitoring by the Department of the Army is crucial.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition and price discovery.
Cost-plus-fixed-fee contract type increases risk of cost overruns.
Lack of small business participation.
Potential for reduced innovation due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.9 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 $29.9 million.

What is the period of performance?

Start: 2020-05-27. End: 2023-08-31.

What specific engineering services are being procured under this contract, and how do they justify a sole-source award?

The contract is for Gray Eagle engineering services, likely encompassing design, development, testing, and sustainment for the Gray Eagle unmanned aerial system. A sole-source justification would typically cite unique capabilities, proprietary technology, or critical program needs that only General Atomics can fulfill, though the specifics require further documentation review.

What measures are in place to control costs and ensure value for money with a cost-plus-fixed-fee contract?

With a cost-plus-fixed-fee contract, cost control relies heavily on detailed audits, performance metrics, and effective negotiation of the fixed fee. The government must diligently monitor expenditures, ensure efficiency, and verify that the contractor's costs are reasonable and allocable to the contract to prevent excessive spending.

How does this sole-source award impact the long-term competitive landscape for Gray Eagle engineering and sustainment services?

A sole-source award can stifle competition by consolidating expertise and infrastructure with one provider. This may create a barrier to entry for potential competitors in the future, potentially leading to sustained higher prices and reduced innovation for subsequent contracts related to the Gray Eagle platform.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: $29,889,395

Exercised Options: $29,889,395

Current Obligation: $29,889,395

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $648,108

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