DoD's $39.5M EMALS/AAG Repair Parts Contract Awarded to General Atomics Without Competition
Contract Overview
Contract Amount: $39,482,377 ($39.5M)
Contractor: General Atomics
Awarding Agency: Department of Defense
Start Date: 2015-09-25
End Date: 2019-08-31
Contract Duration: 1,436 days
Daily Burn Rate: $27.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: EMALS&AAG ONBOARD REPAIR PARTS (OBRPS)
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92121
Plain-Language Summary
Department of Defense obligated $39.5 million to GENERAL ATOMICS for work described as: EMALS&AAG ONBOARD REPAIR PARTS (OBRPS) Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential cost savings. 2. Significant spending on repair parts suggests potential for high sustainment costs for the EMALS/AAG systems. 3. The contract duration of over 1400 days indicates a long-term need for these specialized parts. 4. Lack of competition may limit opportunities for innovation and cost reduction through alternative suppliers. 5. The fixed-price contract type offers some cost certainty but doesn't guarantee optimal value without competition. 6. Focus on repair parts highlights the importance of lifecycle support for major defense systems.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized components involved. Without competitive bids, it's difficult to ascertain if the $39.5 million represents a fair market price or if significant savings were forgone. The fixed-price structure provides some predictability, but the absence of competition prevents a direct comparison to market rates for similar repair parts. Further analysis would require understanding the specific components and their criticality to the EMALS/AAG systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology or unique capabilities. The lack of competition means there was no opportunity for price negotiation or discovery through a bidding process, potentially leading to higher costs for the government.
Taxpayer Impact: Taxpayers may have paid a premium for these repair parts due to the absence of competitive pressure to lower prices. The government missed an opportunity to leverage market forces for cost savings.
Public Impact
The primary beneficiaries are the Department of the Navy and its personnel operating the EMALS/AAG systems, ensuring operational readiness. Services delivered include the provision of essential repair parts for complex aircraft launch and recovery equipment. The geographic impact is primarily within naval aviation facilities where these systems are deployed. Workforce implications include ensuring that maintenance personnel have the necessary parts to keep systems operational.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings.
- High value of repair parts contract may indicate significant sustainment costs.
- Lack of transparency in pricing due to non-competitive award.
Positive Signals
- Fixed-price contract provides some cost certainty for the government.
- Award to a known contractor (General Atomics) may ensure familiarity with system requirements.
- Focus on repair parts ensures operational readiness of critical naval systems.
Sector Analysis
The aerospace and defense sector is characterized by complex, high-value systems requiring specialized components and ongoing maintenance. Contracts for repair parts, like this one for the EMALS/AAG systems, are crucial for ensuring the operational readiness and longevity of military platforms. The market for such specialized parts is often concentrated among a few key manufacturers, which can sometimes lead to sole-source procurements. Comparable spending benchmarks are difficult to establish without detailed knowledge of the specific parts and their market dynamics.
Small Business Impact
This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The sole-source nature of the award further limits the potential for small business participation. This contract primarily benefits the prime contractor, General Atomics, and potentially its direct suppliers, which may or may not include small businesses.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract type, which obligates the contractor to deliver specified parts at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, making it difficult for external parties to assess the fairness of the pricing. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Aircraft Launch and Recovery Equipment
- Naval Aviation Sustainment
- Defense Logistics Agency (DLA) Parts Procurement
- Major Defense Acquisition Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for uncompetitive pricing
Tags
defense, department-of-the-navy, general-atomics, sole-source, firm-fixed-price, aircraft-parts, california, major-contract, sustainment, emals, aag
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $39.5 million to GENERAL ATOMICS. EMALS&AAG ONBOARD REPAIR PARTS (OBRPS)
Who is the contractor on this award?
The obligated recipient is GENERAL ATOMICS.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $39.5 million.
What is the period of performance?
Start: 2015-09-25. End: 2019-08-31.
What is the track record of General Atomics with the EMALS/AAG program?
General Atomics is a key contractor for the Electromagnetic Aircraft Launch System (EMALS) and the Advanced Arresting Gear (AAG) program, which are being integrated onto the Navy's new Gerald R. Ford-class aircraft carriers. The company has a long history of developing and producing advanced technologies for defense applications. Their involvement in the EMALS/AAG program suggests a deep understanding of the system's complexities and requirements, including the need for specialized repair parts. The company's performance on this program would be evaluated based on factors such as on-time delivery, quality of components, and adherence to technical specifications. This specific contract for repair parts indicates a continued reliance on General Atomics for sustainment of these critical systems.
How does the $39.5 million value compare to similar repair parts contracts for naval aviation systems?
Direct comparison of the $39.5 million value for EMALS/AAG repair parts to similar contracts is challenging without specific details on the types and quantities of parts included. However, for major naval aviation platforms, sustainment costs, including repair parts, can represent a significant portion of the total lifecycle cost. Contracts for specialized components for advanced systems often run into tens of millions of dollars over their duration. The value of this contract should be assessed in the context of the EMALS/AAG system's complexity, its operational tempo, and the criticality of the parts supplied. Given the sole-source nature, a definitive value-for-money assessment requires internal government cost analysis or benchmarking against similar sole-source awards for highly specialized defense components.
What are the primary risks associated with a sole-source award for critical repair parts?
The primary risk associated with a sole-source award for critical repair parts is the potential for inflated pricing due to the lack of competitive pressure. Without multiple bidders vying for the contract, the government may not achieve the best possible price. Another risk is reduced incentive for the sole-source provider to innovate or improve efficiency, as there is no direct competition to spur such efforts. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain; if the sole-source provider experiences production issues or financial difficulties, it could lead to significant delays in obtaining necessary parts, impacting system readiness. Finally, the lack of transparency in the pricing negotiation process can make it difficult to ensure fair and reasonable costs.
How effective is the fixed-price contract type in managing costs for repair parts?
The Firm Fixed Price (FFP) contract type is generally considered effective in managing costs for repair parts, especially when the scope of work and specifications are well-defined. Under an FFP contract, the contractor assumes the risk of cost overruns, and the government pays a predetermined price. This provides cost certainty for the buyer and incentivizes the contractor to control costs to maximize profit. For standardized or readily available repair parts, FFP can be highly effective. However, for highly specialized or custom-manufactured components, where cost estimation can be more uncertain, the contractor may build in a larger contingency, potentially leading to a higher initial price. In this case, the effectiveness of the FFP is somewhat mitigated by the sole-source nature of the award, as the baseline price itself may not be optimized through competition.
What are historical spending patterns for EMALS/AAG sustainment and repair parts?
Historical spending patterns for EMALS/AAG sustainment and repair parts are intrinsically linked to the program's development and deployment timeline. As a relatively new technology being integrated onto the Ford-class carriers, extensive historical data comparable to legacy systems may be limited. Initial spending would likely focus on development, testing, and initial fielding, with repair parts contracts becoming more significant as the systems accumulate flight hours and require maintenance. The $39.5 million awarded here represents a specific procurement action within the broader sustainment strategy. Analyzing broader trends would require examining total contract obligations for EMALS/AAG sustainment over several fiscal years, including maintenance, upgrades, and spare parts, to understand the overall lifecycle cost trajectory and identify any escalation in repair part expenditures.
What is the potential impact of this contract on the broader aircraft carrier modernization effort?
This contract for EMALS/AAG onboard repair parts is directly integral to the successful modernization and operationalization of the Gerald R. Ford-class aircraft carriers. The EMALS and AAG are foundational technologies enabling the carrier's advanced capabilities, including the launch and recovery of a wider range of aircraft and increased sortie rates. Ensuring the availability of critical repair parts through this contract directly supports the readiness and operational effectiveness of these new carriers. Any disruption or delay in obtaining these parts could impede the training, deployment, and mission execution of the Ford-class carriers, thereby impacting the Navy's overall power projection capabilities. Therefore, this contract plays a vital, albeit specific, role in the broader success of the carrier modernization program.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT LAUNCHING, LANDING, GROUND HANDLING AND SERVICING EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3550 GENERAL ATOMICS CT, SAN DIEGO, CA, 92121
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $39,482,377
Exercised Options: $39,482,377
Current Obligation: $39,482,377
Subaward Activity
Number of Subawards: 118
Total Subaward Amount: $36,542,886
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6833511G0003
IDV Type: BOA
Timeline
Start Date: 2015-09-25
Current End Date: 2019-08-31
Potential End Date: 2019-08-31 00:00:00
Last Modified: 2019-05-29
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