Naval Air Warfare Center awards $928M contract for aircraft landing equipment to General Atomics

Contract Overview

Contract Amount: $928,163,902 ($928.2M)

Contractor: General Atomics

Awarding Agency: Department of Defense

Start Date: 2003-07-28

End Date: 2023-07-31

Contract Duration: 7,308 days

Daily Burn Rate: $127.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200310!000495!1700!A8050 !NAVAL AIR WARFARE CENTER, AIRCRA!N6833503C0205 !A!N! !N! !20030728!20041028!067638957!067638957!859181984!N!GENERAL ATOMICS !3550 GENERAL ATOMICS COURT!SAN DIEGO !CA!92121!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000004883000!N!N!000107026822!1710!AIRCRAFT LANDING EQUIPMENT !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !336413!E! !3! ! ! ! ! !99990909!B! ! !A! !A!Y!U!2!002!B! !A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92121

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $928.2 million to GENERAL ATOMICS for work described as: 200310!000495!1700!A8050 !NAVAL AIR WARFARE CENTER, AIRCRA!N6833503C0205 !A!N! !N! !20030728!20041028!067638957!067638957!859181984!N!GENERAL ATOMICS !3550 GENERAL ATOMICS COURT!SAN DIEGO !CA!92121!66000!073!06!SAN DIEGO !SAN D… Key points: 1. Contract awarded for aircraft landing equipment, a critical component for naval aviation operations. 2. The contract value of over $928 million indicates a significant investment in maintaining and upgrading naval air capabilities. 3. General Atomics, a major defense contractor, is the sole awardee, suggesting specialized capabilities or a competitive bidding process that favored them. 4. The contract duration of approximately 20 years (7308 days) points to a long-term need for these services or equipment. 5. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 6. The primary place of performance is San Diego, California, aligning with major naval aviation hubs.

Value Assessment

Rating: fair

The contract value of $928,163,902.44 for aircraft landing equipment over a period of roughly 20 years suggests a substantial, long-term investment. Benchmarking this against similar contracts is challenging without more specific details on the exact equipment and services provided. However, the extended duration implies a need for sustained support or a phased acquisition. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation if the contractor's costs exceed initial estimates. The fixed fee component provides some incentive for efficiency, but the overall value proposition depends heavily on the contractor's cost management and the government's oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The data shows two bids were received. While the specific details of the competition are not provided, a full and open process generally promotes competitive pricing and encourages a wider range of potential suppliers to participate. The fact that only two bids were submitted might suggest a specialized market or high barriers to entry for potential competitors.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, is generally favorable for taxpayers as it aims to secure the best value through market forces. It helps prevent sole-source situations where pricing could be less competitive.

Public Impact

Naval aviation operations benefit from the supply of critical landing equipment, ensuring aircraft can operate safely and efficiently. The contract supports the U.S. Navy's readiness and modernization efforts for its air fleet. The primary geographic impact is in San Diego, California, a major hub for naval aviation activities and defense contracting. The contract likely supports jobs within the aerospace and defense manufacturing sector, particularly at General Atomics and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
Long contract duration (approx. 20 years) increases the risk of obsolescence or changing technological requirements.
Limited number of bidders (2) in a full and open competition could indicate a niche market or potential consolidation.
The specific nature of 'aircraft landing equipment' is broad and may encompass various complex systems requiring specialized maintenance and upgrades.

Positive Signals

Awarded under full and open competition, suggesting an effort to achieve competitive pricing.
General Atomics is an established defense contractor with a track record in complex aerospace systems.
The contract addresses a critical need for naval aviation infrastructure.
Long-term contract provides stability and predictability for both the government and the contractor.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft components and equipment. The market for specialized aircraft landing systems is likely dominated by a few key players due to the high technical expertise, stringent quality control, and regulatory requirements involved. Spending in this sub-sector is driven by military modernization programs, fleet readiness, and the lifecycle management of existing aircraft. Comparable spending benchmarks would typically be found within the Department of Defense's procurement of aviation support equipment and systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-value contract awarded to a major defense contractor, it is unlikely that small businesses would be the primary awardees. However, General Atomics may engage small businesses as subcontractors for specialized components or services, contributing to the small business ecosystem indirectly. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Air Systems Command (NAVAIR) and the Department of Defense's contracting oversight bodies. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, but specific details of cost breakdowns and performance metrics may be sensitive. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Aviation Maintenance
Aircraft Component Manufacturing
Defense Procurement
Aerospace Equipment
Military Logistics
Air Systems Command Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Long-Term Contract Obsolescence
Limited Competition Concerns
Potential for Inefficiencies in CPFF

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $928.2 million to GENERAL ATOMICS. 200310!000495!1700!A8050 !NAVAL AIR WARFARE CENTER, AIRCRA!N6833503C0205 !A!N! !N! !20030728!20041028!067638957!067638957!859181984!N!GENERAL ATOMICS !3550 GENERAL ATOMICS COURT!SAN DIEGO !CA!92121!66000!073!06!SAN DIEGO !SAN DIEGO !CALIFORNIA!+000004883000!N!N!000107026822!1710!AIRCRAFT LANDING EQUIPMENT !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !336413!E! !3! ! ! ! ! !99990909!B

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 $928.2 million.

What is the period of performance?

Start: 2003-07-28. End: 2023-07-31.

What specific types of aircraft landing equipment are covered under this contract, and what is their criticality to naval aviation operations?

The contract specifies 'Aircraft Landing Equipment' (PSC: 1710, NAICS: 336413 - Other Aircraft Parts and Auxiliary Equipment Manufacturing). This broad category likely encompasses a range of components essential for aircraft takeoff and landing, such as landing gear systems, arrestor gear, catapult systems, guidance lighting, and potentially associated maintenance and support equipment. These systems are critical for the safe and effective operation of naval aircraft, particularly on aircraft carriers where space is limited and operational tempo is high. Failures or deficiencies in landing equipment can lead to mission aborts, aircraft damage, or severe safety incidents, underscoring their high criticality.

How does the awarded price of $928M compare to similar contracts for aircraft landing equipment, considering the contract's duration and scope?

Directly comparing the $928M award to similar contracts is challenging without granular data on the specific components and services included. However, the duration of approximately 20 years (7308 days) suggests a comprehensive, long-term support or production agreement. Contracts of this magnitude for specialized defense equipment often span many years and involve significant research, development, production, and sustainment costs. The value reflects the complexity and strategic importance of the equipment to naval aviation. A more precise comparison would require identifying contracts with identical or highly similar Product Service Codes (PSCs) and North American Industry Classification System (NAICS) codes, as well as similar contract types and scopes of work.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks with a CPFF contract of this scale and duration revolve around cost control and potential inefficiencies. While the fixed fee provides a ceiling for the contractor's profit, the government bears the risk of cost overruns. If General Atomics' actual costs significantly exceed projections, the total contract value could escalate substantially. This necessitates robust government oversight to scrutinize costs, ensure they are reasonable and allocable, and prevent scope creep. The long duration also introduces risks related to technological obsolescence, changing operational requirements, and potential contractor performance degradation over time. Effective contract management and performance monitoring are crucial to mitigate these risks.

What is General Atomics' track record with the Naval Air Warfare Center and similar defense contracts?

General Atomics is a well-established defense contractor with a significant history of working with the U.S. military, including the Navy. They are particularly known for their work in unmanned aerial systems (UAS), such as the Predator and Reaper drones, as well as advanced technologies like electromagnetic aircraft launch systems (EMALS) and carrier-based recovery systems. Their involvement with the Naval Air Warfare Center likely extends to various aviation-related programs. While this specific contract focuses on landing equipment, General Atomics' broader experience in complex aerospace systems suggests they possess the technical capability and infrastructure to handle such a requirement. Their past performance on similar large-scale defense contracts would be a key factor in the award decision.

How does the competition level (2 bidders) for this contract potentially impact pricing and innovation compared to a more competitive scenario?

A competition with only two bidders, even under a 'full and open' designation, presents a mixed outlook for pricing and innovation. On one hand, having at least two entities vying for the contract introduces some level of competitive pressure, which can help drive down prices and encourage efficiency compared to a sole-source award. However, a market with only two significant players might indicate high barriers to entry (e.g., specialized technology, high capital investment, long qualification processes) or market consolidation. This limited competition could potentially reduce the incentive for aggressive pricing or radical innovation compared to a scenario with numerous bidders. The government's negotiation strategy and the specific capabilities of the two bidders would be critical in determining the ultimate value achieved.

What are the implications of this contract for the broader defense industrial base, particularly concerning aircraft landing systems?

This contract signifies a substantial commitment by the Navy to its aviation infrastructure, particularly in the area of landing systems. For General Atomics, it represents a significant revenue stream and reinforces their position in the naval aviation supply chain. The long duration suggests a stable demand for these systems, which can encourage investment in production capabilities and workforce development within the company and its supply chain. It may also influence the direction of technological development in landing systems, as the awarded contractor will be responsible for meeting the Navy's evolving needs over two decades. The limited number of bidders could also signal a trend towards consolidation or specialization within this niche segment of the defense industrial base.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 3550 GENERAL ATOMICS COURT, SAN DIEGO, CA, 92121

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $669,584,696

Exercised Options: $669,404,695

Current Obligation: $928,163,902

Actual Outlays: $29,703,341

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline