DoD Army Awards $138M for Gray Eagle Technical Services, Sole-Source Contract
Contract Overview
Contract Amount: $13,810,514 ($13.8M)
Contractor: General Atomics Aeronautical Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2025-05-09
End Date: 2026-09-06
Contract Duration: 485 days
Daily Burn Rate: $28.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: GRAY EAGLE TECHNICAL SERVICES (GETS) FY 24-28.
Place of Performance
Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064
Plain-Language Summary
Department of Defense obligated $13.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: GRAY EAGLE TECHNICAL SERVICES (GETS) FY 24-28. Key points: 1. Significant contract value for technical services related to the Gray Eagle platform. 2. Sole-source award raises questions about competition and potential price discovery. 3. Risk associated with reliance on a single provider for critical technical support. 4. Spending falls within the Aircraft Manufacturing sector, with potential for high unit costs.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar technical support contracts for unmanned aerial systems is difficult without more detailed cost breakdowns.
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 may result in higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for this substantial contract raises concerns about the efficient use of taxpayer funds.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term reliance on a single contractor could impact innovation and service quality. Potential for cost overruns given the Cost Plus Fixed Fee contract type.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
- Potential for cost overruns
Positive Signals
- Essential technical services for a key defense asset
- Defined contract period
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically supporting the Gray Eagle unmanned aerial system. Spending in this sector can be high due to complex technology and specialized support requirements.
Small Business Impact
The contract was awarded to General Atomics Aeronautical Systems, Inc., a large business. There is no indication of small business participation in this specific award, which is common for sole-source, specialized technical services.
Oversight & Accountability
Oversight will be crucial to ensure the contractor meets performance requirements and manages costs effectively under the Cost Plus Fixed Fee structure, especially given the sole-source nature of the award.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type increases cost risk.
- Potential for contractor lock-in.
- Lack of transparency in pricing due to no-bid nature.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.8 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. GRAY EAGLE TECHNICAL SERVICES (GETS) FY 24-28.
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 $13.8 million.
What is the period of performance?
Start: 2025-05-09. End: 2026-09-06.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or urgent needs. For this contract, the specific rationale needs to be thoroughly documented by the agency. To ensure fair pricing, the Department of Defense should conduct rigorous cost analysis, benchmark against similar contracts, and potentially negotiate stricter fee structures or performance incentives.
What are the risks associated with relying solely on General Atomics for Gray Eagle technical services?
The primary risks include a lack of competitive pressure leading to inflated costs, potential stagnation in innovation, and vendor lock-in. If General Atomics faces operational issues or decides to discontinue services, the Army could face significant disruptions in maintaining its Gray Eagle fleet, potentially impacting readiness.
How will the effectiveness of the technical services be measured and ensured under this contract?
Effectiveness will be measured through key performance indicators (KPIs) outlined in the contract, such as response times, system uptime, and successful issue resolution rates. Regular performance reviews, milestone tracking, and potentially independent technical assessments will be employed to ensure the services meet the Army's operational requirements and maintain the Gray Eagle's readiness.
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: $13,810,514
Exercised Options: $13,810,514
Current Obligation: $13,810,514
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $811,612
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
Start Date: 2025-05-09
Current End Date: 2026-09-06
Potential End Date: 2026-09-06 12:09:00
Last Modified: 2025-11-25
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