DHS awards $211.7M to General Atomics for air transportation support, with limited competition

Contract Overview

Contract Amount: $211,663,836 ($211.7M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2012-10-19

End Date: 2024-09-14

Contract Duration: 4,348 days

Daily Burn Rate: $48.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::CL,CT::IGF--OPERATIONAL AND MAINTENANCE SUPPORT SERVICES

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $211.7 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: IGF::CL,CT::IGF--OPERATIONAL AND MAINTENANCE SUPPORT SERVICES Key points: 1. The contract's value represents a significant investment in operational and maintenance support for air transportation. 2. Limited competition raises questions about potential price overruns and the best value achieved for taxpayers. 3. The long duration of the contract (over 10 years) suggests a need for sustained support, but also warrants scrutiny of ongoing costs. 4. The cost-plus-fixed-fee structure may incentivize cost increases, requiring robust oversight to manage expenses. 5. Performance context is critical, as the effectiveness of air transportation support directly impacts border security operations. 6. This contract falls within the 'Other Support Activities for Air Transportation' sector, indicating specialized services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and comparable service agreements. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can lead to higher costs if not managed tightly. The extended duration suggests a potentially high lifetime cost, necessitating careful monitoring of expenditures against delivered value. Without detailed cost breakdowns or comparisons to similar support contracts, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed openly, indicating a limited procurement approach. The specific reasons for this limitation are not detailed, but it suggests that only a select number of vendors were considered or approached. A limited competition can result in less competitive pricing compared to full and open competition, potentially leading to higher costs for the government.

Taxpayer Impact: The lack of broad competition means taxpayers may not have benefited from the most cost-effective solutions available in the market. This could translate to higher overall spending for the services rendered.

Public Impact

Benefits U.S. Customs and Border Protection (CBP) by ensuring the operational readiness of air assets. Delivers essential maintenance and operational support services for critical air transportation infrastructure. Geographic impact is primarily within California, where the contractor is based, but supports national border security operations. Workforce implications include employment for specialized technical and support personnel within General Atomics Aeronautical Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure may lead to cost overruns without strict oversight.
Limited competition could result in suboptimal pricing and reduced value for taxpayer funds.
Long contract duration necessitates continuous evaluation of necessity and cost-effectiveness.
Lack of detailed performance metrics makes it difficult to assess true value for money.

Positive Signals

Contract ensures continued operational support for critical air assets, vital for border security.
General Atomics Aeronautical Systems is a known entity in aerospace and defense, suggesting technical capability.
The contract has a defined end date, providing a framework for future procurement reviews.

Sector Analysis

This contract operates within the broader aerospace and defense sector, specifically focusing on support services for air transportation. The market for such specialized maintenance and operational support is often concentrated among a few key industry players. Comparable spending benchmarks would typically involve analyzing other government contracts for similar aviation support, factoring in aircraft types, service scope, and contract duration. The 'Other Support Activities for Air Transportation' NAICS code (488190) encompasses a range of services crucial for maintaining aviation infrastructure and operations.

Small Business Impact

The data indicates that small business participation (ss and sb fields) is not a stated requirement or focus for this contract. There is no indication of small business set-asides or subcontracting plans. This suggests that the primary contractor, General Atomics Aeronautical Systems, Inc., is expected to perform the majority of the work, with limited direct benefit or opportunity for the small business ecosystem in this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting and program management offices. Given the cost-plus-fixed-fee structure, rigorous financial oversight and performance monitoring are essential to ensure funds are used efficiently and effectively. Transparency may be limited due to the nature of defense-related contracts and the 'limited competition' designation. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Homeland Security Operational Support Contracts
Air Transportation Services Procurement
Aerospace Maintenance and Support Services
Border Security Technology and Services

Risk Flags

Limited competition procurement
Cost-plus-fixed-fee contract type
Long contract duration
Lack of publicly available performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $211.7 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. IGF::CL,CT::IGF--OPERATIONAL AND MAINTENANCE SUPPORT SERVICES

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 Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $211.7 million.

What is the period of performance?

Start: 2012-10-19. End: 2024-09-14.

What is the historical spending trend for this specific contract or similar services provided by General Atomics Aeronautical Systems to DHS?

Analyzing historical spending requires access to detailed contract databases and financial records beyond the provided summary. However, the current award of $211.7 million over a period extending to September 2024 suggests a substantial and ongoing financial commitment. To understand trends, one would need to examine annual obligations and expenditures for this contract since its inception in 2012. Comparing this to previous contracts for similar air support services, both with General Atomics and other potential vendors, would reveal if spending has increased, decreased, or remained stable relative to inflation and service scope. Without this granular historical data, it's difficult to ascertain specific spending patterns or identify significant deviations.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar air transportation support services in terms of overall cost efficiency?

Cost-Plus-Fixed-Fee (CPFF) contracts are often used when the scope of work is complex or uncertain, allowing for flexibility. The 'fixed fee' provides the contractor with a predetermined profit margin, while the government covers allowable costs. Compared to fixed-price contracts, CPFF can potentially lead to higher overall costs for the government if costs escalate significantly, as the government bears the risk of cost overruns. However, it can be more efficient than other cost-reimbursement types like Cost-Plus-Incentive-Fee (CPIF) if performance incentives are not well-defined or achievable. For routine, well-defined services, fixed-price contracts are generally considered more cost-efficient. The efficiency of CPFF in this case heavily depends on the government's ability to closely monitor and control the contractor's costs and the appropriateness of the fixed fee.

What specific performance metrics are used to evaluate the effectiveness of General Atomics Aeronautical Systems' support services under this contract?

The provided data does not include specific performance metrics. Typically, for operational and maintenance support services, metrics might include aircraft availability rates, response times for maintenance requests, turnaround times for repairs, adherence to safety standards, and mission capable rates. The effectiveness of the services is crucial for U.S. Customs and Border Protection's (CBP) ability to conduct surveillance and interdiction operations. Without defined metrics and associated performance evaluations, it is challenging to objectively assess whether the government is receiving optimal value and performance for the $211.7 million investment. A thorough review would require access to the contract's Performance Work Statement (PWS) and associated Quality Assurance Surveillance Plans (QASPs).

Given the limited competition, what steps has the Department of Homeland Security taken to ensure fair pricing and prevent potential contractor overreach?

When a contract is awarded under limited competition, agencies are expected to justify the procurement approach and take measures to ensure fair and reasonable pricing. This might involve conducting market research to understand price ranges, negotiating aggressively with the sole or limited bidders, and potentially seeking independent cost estimates. The Department of Homeland Security (DHS) would likely rely on its contracting officers and technical experts to scrutinize the proposed costs, including labor rates, material costs, and the fixed fee. However, the inherent limitation of having fewer bidders reduces the government's leverage in price negotiations compared to a full and open competition scenario. Transparency regarding the specific justification for limited competition and the pricing negotiation process is often limited.

What is the strategic importance of these air transportation support services to the overall mission of U.S. Customs and Border Protection?

Air transportation support services are strategically vital for U.S. Customs and Border Protection (CBP) as they underpin the operational readiness and effectiveness of CBP's aviation assets. These assets, which include manned and unmanned aircraft, are critical for border surveillance, drug interdiction, search and rescue operations, and responding to threats along U.S. borders. Reliable maintenance and operational support ensure that these aircraft are available when needed, maximizing their utility and contributing directly to national security and border integrity. The long-term nature of this contract suggests a sustained need for these capabilities, highlighting their ongoing importance to CBP's mission execution and its ability to adapt to evolving border security challenges.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

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: $220,182,531

Exercised Options: $212,192,619

Current Obligation: $211,663,836

Actual Outlays: $119,416

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $42,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline