Department of Energy's $12.8M contract with General Atomics for aircraft services awarded without competition
Contract Overview
Contract Amount: $12,880,641 ($12.9M)
Contractor: General Atomics
Awarding Agency: Department of Energy
Start Date: 1999-10-15
End Date: 2001-03-31
Contract Duration: 533 days
Daily Burn Rate: $24.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Place of Performance
Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90001
Plain-Language Summary
Department of Energy obligated $12.9 million to GENERAL ATOMICS for work described as: Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns. 2. The contract was not competed, raising questions about potential overpayment and lack of market price discovery. 3. A long performance period of 533 days suggests a significant scope of work. 4. The contract was awarded to a single source, potentially limiting opportunities for other qualified vendors. 5. The absence of competition may indicate a specialized need or a lack of market availability. 6. The contract's value, while substantial, needs to be benchmarked against similar services to assess value for money.
Value Assessment
Rating: questionable
Benchmarking the value for money on this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and comparisons to similar aircraft services. The lack of competition means there's no market-driven price discovery to assess if the $12.8 million represents a fair price. Without competitive bids, it's difficult to ascertain if the government secured the best possible value or if costs were inflated due to the sole-source nature of the award. Further analysis of the fixed fee component and the contractor's historical performance on similar contracts would be necessary for a more definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed. The Department of Energy likely determined that only General Atomics could provide the required aircraft services, possibly due to proprietary technology, unique capabilities, or existing infrastructure. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the most cost-effective solution. This approach bypasses the standard procurement process designed to solicit offers from multiple vendors.
Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive bidding. Without multiple offers, there is less assurance that the price reflects the lowest achievable market rate, potentially leading to less efficient use of public funds.
Public Impact
The Department of Energy benefits from specialized aircraft services essential for its operations. The contract supports critical functions likely related to energy research, development, or national security. Services are being delivered in California, indicating a specific geographic focus for this contract. The contract likely supports a specialized workforce within General Atomics, including pilots, maintenance crews, and support staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential value for money.
- Cost-plus-fixed-fee contract structure can incentivize cost increases.
- Lack of transparency in the justification for sole-source award.
- Long contract duration without competition raises concerns about sustained pricing.
- Absence of small business subcontracting opportunities due to sole-source nature.
Positive Signals
- Award to a known contractor with potential specialized expertise.
- Contract addresses a specific, potentially unique, requirement for the Department of Energy.
- Fixed fee component provides some level of cost predictability for the government.
Sector Analysis
This contract falls within the aerospace and defense services sector, specifically focusing on aircraft operations and support. The market for specialized aircraft services is often characterized by high barriers to entry due to technological requirements, regulatory hurdles, and the need for specialized personnel. While the exact market size for this niche is difficult to pinpoint, it is a critical component of national security and scientific research infrastructure. This contract represents a specific instance of federal spending within this sector, supporting the Department of Energy's unique mission requirements.
Small Business Impact
As a sole-source award, this contract does not appear to include specific small business set-aside provisions. Consequently, there are likely no direct subcontracting opportunities mandated for small businesses under this particular award. This approach bypasses the typical mechanisms for engaging small businesses in federal contracting, potentially limiting their participation and the broader economic benefits associated with federal spending.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Energy's contracting officers and program managers. Accountability measures would be defined within the contract terms, focusing on performance deliverables and adherence to the cost-plus-fixed-fee structure. Transparency regarding the justification for the sole-source award and the detailed cost elements would be crucial for public scrutiny, though such details are often not fully disclosed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Energy Aircraft Operations
- Department of Defense Aircraft Services
- Federal Aviation Administration Support Contracts
- National Science Foundation Research Flights
Risk Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
Tags
department-of-energy, general-atomics, aircraft-services, cost-plus-fixed-fee, sole-source, not-competed, california, aerospace, defense, federal-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $12.9 million to GENERAL ATOMICS. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is GENERAL ATOMICS.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $12.9 million.
What is the period of performance?
Start: 1999-10-15. End: 2001-03-31.
What specific aircraft services are being provided under this contract?
The provided data does not specify the exact nature of the aircraft services. However, given the contractor (General Atomics) and the awarding agency (Department of Energy), these services likely pertain to specialized aerial support for energy-related research, development, or potentially national security missions. This could include aerial surveillance, data collection, specialized flight operations, or support for experimental aircraft. The 'Aircraft Services' designation is broad and requires further detail from the contract's statement of work to understand the precise mission and deliverables.
What is the justification for awarding this contract on a sole-source basis?
The data indicates the contract was awarded as 'NOT COMPETED' (CT: NOT COMPETED). This typically means a sole-source justification was approved by the agency. Common reasons for sole-source awards include the availability of only one responsible source, urgent and compelling needs where competition is not feasible, or when the services require unique capabilities or proprietary technology possessed by a single contractor. For General Atomics, this could relate to their specific expertise in certain types of aircraft or related technologies that the Department of Energy requires for its unique mission objectives.
How does the Cost Plus Fixed Fee (CPFF) contract type impact cost control?
A Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is not. This structure can incentivize contractors to incur costs, as their profit is not directly tied to cost savings. For the government, it offers less cost certainty compared to fixed-price contracts. Effective oversight and robust cost accounting are crucial to manage potential cost overruns and ensure the government only pays for legitimate, allowable expenses.
What is the historical spending pattern for similar aircraft services by the Department of Energy?
The provided data only includes details for this single contract. To assess historical spending patterns, one would need to analyze the Department of Energy's procurement history over several fiscal years, identifying contracts for similar aircraft services, their values, contract types, and competition levels. This would involve querying federal procurement databases (like FPDS or USASpending) for relevant keywords and agencies. Without access to that broader dataset, it's impossible to establish a historical spending trend for these specific services within the DOE.
What is General Atomics' track record with the Department of Energy and similar contracts?
General Atomics is a well-known defense and energy contractor with a significant history of working with various government agencies, including the Department of Energy and the Department of Defense. Their expertise often lies in areas such as unmanned aerial systems (UAS), advanced materials, and energy technologies. While this specific contract data doesn't detail their performance, General Atomics generally has a substantial track record. A deeper dive would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) and other contracts awarded to them by the DOE to assess their reliability, quality of work, and adherence to budget and schedule.
Are there any performance risks associated with this contract given its sole-source nature and CPFF structure?
Yes, there are inherent performance risks. The sole-source nature can reduce the contractor's incentive to perform optimally, as there is no immediate threat of losing future business to competitors. The CPFF structure, while providing flexibility, can also lead to less stringent cost management by the contractor if oversight is weak. Risks include potential cost overruns beyond the initial estimate, schedule delays if cost is prioritized over timely completion, and potentially lower quality of service if the contractor focuses on maximizing allowable costs rather than delivering the most efficient or effective outcome.
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Business Categories: Category Business, Not Designated a Small Business
Timeline
Start Date: 1999-10-15
Current End Date: 2001-03-31
Potential End Date: 2001-03-31 00:00:00
Last Modified: 2009-05-01
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