DoD Awards $50.3M for Gray Eagle Technical Services, Sole-Source Contract

Contract Overview

Contract Amount: $50,322,043 ($50.3M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-15

End Date: 2027-09-29

Contract Duration: 1,171 days

Daily Burn Rate: $43.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: GRAY EAGLE TECHNICAL SERVICES (GETS) 2 STARSHIELD SERVICES GROUND AND FLIGHT VERIFICATION (PHASE 3).

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $50.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: GRAY EAGLE TECHNICAL SERVICES (GETS) 2 STARSHIELD SERVICES GROUND AND FLIGHT VERIFICATION (PHASE 3). Key points: 1. Significant award to General Atomics Aeronautical Systems, Inc. for aircraft manufacturing. 2. Contract is a sole-source delivery order, raising questions about competition. 3. High value award with a long performance period (over 3 years). 4. Focus on ground and flight verification for the Gray Eagle program.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar sole-source contracts for technical services is difficult due to the lack of competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to drive down prices.

Taxpayer Impact: The lack of competition for this significant award means taxpayers may be paying a premium for these services.

Public Impact

Taxpayers may be overpaying due to the sole-source nature of the contract. Lack of transparency in pricing due to no competitive bidding process. Potential for cost overruns with a Cost Plus Fixed Fee contract type. Impact on the operational readiness and effectiveness of the Gray Eagle program.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition
High dollar value

Positive Signals

Supports critical aircraft technical services
Long-term contract provides stability

Sector Analysis

This award falls within the Aircraft Manufacturing sector, specifically supporting the Department of the Army's aviation assets. Spending in this sector is critical for national defense, but competitive procurement is essential to ensure value for money.

Small Business Impact

The awardee is General Atomics Aeronautical Systems, Inc., a large business. There is no indication of subcontracting opportunities for small businesses in the provided data, which could be a missed opportunity for economic inclusion.

Oversight & Accountability

Oversight will be crucial to ensure that the Cost Plus Fixed Fee structure does not lead to excessive costs and that the contractor meets all performance requirements within the specified timeline.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition and potentially increases cost.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Lack of transparency in pricing due to no competitive bidding.
Potential for contractor to not meet performance expectations without strong oversight.
No clear indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.3 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. GRAY EAGLE TECHNICAL SERVICES (GETS) 2 STARSHIELD SERVICES GROUND AND FLIGHT VERIFICATION (PHASE 3).

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 $50.3 million.

What is the period of performance?

Start: 2024-07-15. End: 2027-09-29.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that cannot be met by other vendors. Without further details, it's difficult to assess if these criteria were met, but it warrants scrutiny to ensure fair and open competition principles were considered.

How will the Department of the Army ensure cost control with a Cost Plus Fixed Fee contract?

The Department of the Army must implement robust oversight mechanisms, including detailed cost tracking, regular performance reviews, and clear milestones. Establishing a realistic fixed fee based on thorough cost analysis and incentivizing efficiency can help mitigate the risk of cost overruns inherent in CPFF contracts.

What is the expected impact of these technical services on the Gray Eagle program's effectiveness?

Effective ground and flight verification are critical for ensuring the Gray Eagle drones are operational, safe, and meet mission requirements. Successful completion of Phase 3 should enhance the program's reliability and readiness, contributing to the overall effectiveness of the platform in its intended roles.

Industry Classification

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

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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

Financial Breakdown

Contract Ceiling: $50,322,043

Exercised Options: $50,322,043

Current Obligation: $50,322,043

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $618,130

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ24D0038

IDV Type: IDC

Timeline