DoD awards $32.9M to General Atomics for Gray Eagle support, raising concerns about competition

Contract Overview

Contract Amount: $32,913,159 ($32.9M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-02-17

End Date: 2024-04-18

Contract Duration: 791 days

Daily Burn Rate: $41.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JOINT TECHNOLOGY CENTER SYSTEM INTEGRATION LAB (JSIL)/GRAY EAGLE MODELING, NAVIGATION AND INTEGRATION (GEMNI) SUPPORT FY22.

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $32.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: JOINT TECHNOLOGY CENTER SYSTEM INTEGRATION LAB (JSIL)/GRAY EAGLE MODELING, NAVIGATION AND INTEGRATION (GEMNI) SUPPORT FY22. Key points: 1. The contract value of $32.9M is significant for aircraft manufacturing support. 2. General Atomics Aeronautical Systems, Inc. is the sole awardee, indicating a lack of competition. 3. The 'NOT COMPETED' status and 'COST PLUS FIXED FEE' contract type present potential risks. 4. This award falls within the Aircraft Manufacturing sector, specifically supporting the Gray Eagle program.

Value Assessment

Rating: questionable

The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed carefully. Benchmarking against similar sole-source contracts for specialized aircraft support is difficult due to limited public data, but the fixed fee component aims to control profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning only one source was solicited. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process. The justification for sole-source is not provided in the data.

Taxpayer Impact: The lack of competition may result in higher costs for taxpayers, as there was no market pressure to drive down the price.

Public Impact

Taxpayers may be paying more than necessary due to the absence of competitive bidding. The Gray Eagle program's reliance on a single contractor could create long-term dependency and reduce flexibility. Lack of transparency in the sole-source award process can erode public trust in government spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of transparency in award justification

Positive Signals

Supports critical DoD program (Gray Eagle)
Awarded to established defense contractor

Sector Analysis

This contract falls under the Aircraft Manufacturing sector, which is crucial for national defense. Spending in this sector can be high due to the complexity and specialized nature of aircraft systems. Benchmarks for similar sole-source support contracts are scarce, making direct comparison challenging.

Small Business Impact

The awardee, General Atomics Aeronautical Systems, Inc., is a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific contract, which is common for large, specialized defense procurements.

Oversight & Accountability

The 'NOT COMPETED' status warrants further oversight to ensure the justification for sole-source procurement was valid and that the pricing is reasonable. Accountability for cost control rests heavily on the Department of the Army's contract management.

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 contract type can lead to cost overruns.
Lack of transparency regarding award justification.
Potential for contractor lock-in.
Limited visibility into small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.9 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. JOINT TECHNOLOGY CENTER SYSTEM INTEGRATION LAB (JSIL)/GRAY EAGLE MODELING, NAVIGATION AND INTEGRATION (GEMNI) SUPPORT FY22.

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 $32.9 million.

What is the period of performance?

Start: 2022-02-17. End: 2024-04-18.

What was the specific justification for awarding this contract on a sole-source basis, and was it reviewed by appropriate oversight bodies?

The provided data does not include the justification for the sole-source award. Typically, such justifications are based on factors like unique capabilities, urgent needs, or lack of viable alternatives. A thorough review by the procuring agency and potentially higher levels of DoD oversight is expected to validate these claims and ensure taxpayer funds are used responsibly.

How does the 'Cost Plus Fixed Fee' structure mitigate risks associated with sole-source procurement in this specialized aircraft support contract?

The 'Fixed Fee' component of the contract aims to provide the contractor with a predetermined profit margin, incentivizing them to control costs to maximize their return. However, the 'Cost Plus' aspect means the government bears the risk of actual costs incurred. Effective oversight is crucial to ensure costs are reasonable and allocable.

What is the long-term strategy for ensuring competitive sourcing or managing potential vendor lock-in for Gray Eagle modeling, navigation, and integration support?

The long-term strategy is not detailed in this data. Agencies typically aim to foster competition where possible, perhaps through future contract vehicles or by developing alternative capabilities. Managing vendor lock-in requires proactive planning, including market research and potentially investing in organic government capabilities or encouraging new entrants.

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: $32,913,159

Exercised Options: $32,913,159

Current Obligation: $32,913,159

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