DoD's Hypersonics Program awarded $46.3M to General Atomics for R&D, facing limited competition
Contract Overview
Contract Amount: $46,263,305 ($46.3M)
Contractor: General Atomics
Awarding Agency: Department of Defense
Start Date: 2019-09-30
End Date: 2023-12-31
Contract Duration: 1,553 days
Daily Burn Rate: $29.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: HYPERSONICS TECHNOLOGY DEMONSTRATION PROGRAM SUPPORT
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35806
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $46.3 million to GENERAL ATOMICS for work described as: HYPERSONICS TECHNOLOGY DEMONSTRATION PROGRAM SUPPORT Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential cost efficiencies. 2. Significant investment in a critical defense technology area, aligning with national security priorities. 3. Long contract duration (over 4 years) suggests a complex, multi-phase research and development effort. 4. Focus on R&D in physical sciences indicates a foundational role in advancing hypersonics capabilities. 5. Limited public information on performance metrics makes a comprehensive value-for-money assessment challenging. 6. The contract's sole-source nature presents a potential risk for overpayment without competitive benchmarking.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is difficult due to its sole-source nature and specialized R&D focus. Without competitive bids, it's hard to ascertain if the pricing reflects market rates or optimal value. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, can incentivize cost escalation if not closely monitored. Comparing it to similar sole-source R&D contracts in advanced defense technologies might offer some context, but a definitive value assessment requires more transparency on cost drivers and performance outcomes.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning General Atomics was the only bidder considered. This approach is typically justified when only one responsible source can provide the required services or when a compelling justification exists for avoiding full and open competition. The lack of multiple bidders limits the government's ability to leverage price competition to achieve the best possible value.
Taxpayer Impact: Taxpayers may not be receiving the most cost-effective solution due to the absence of competitive pressure to drive down prices. The government's negotiating position is inherently weaker in a sole-source scenario.
Public Impact
The Department of Defense benefits from advancements in hypersonics technology, crucial for future military capabilities. General Atomics, a key defense contractor, receives significant funding to conduct critical research and development. The contract supports specialized R&D activities, potentially leading to technological breakthroughs in aerospace and defense. Workforce implications include employment for highly skilled scientists, engineers, and technicians in Alabama. Geographic impact is concentrated in Alabama, where the research and development activities are likely to be performed.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
- Lack of detailed performance metrics makes it difficult to assess the true value for money.
- CPFF contract type can lead to cost overruns if not rigorously managed.
- Limited transparency surrounding the justification for sole-source procurement.
Positive Signals
- Addresses a critical national security technology area (hypersonics).
- Awarded to a known defense contractor with relevant expertise.
- Supports research and development, fostering innovation.
- Long-term contract provides stability for R&D efforts.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on advanced physical sciences. The market for hypersonics technology is highly specialized and dominated by a few key defense contractors. Spending in this area is driven by national security imperatives and the race for technological superiority. Comparable spending benchmarks are difficult to establish due to the classified nature of much of this work and the unique capabilities required.
Small Business Impact
This contract does not appear to have a small business set-aside. Given the specialized nature of hypersonics research and development, it is unlikely that small businesses would be primary contractors, though they may participate as subcontractors. The absence of a set-aside means opportunities for small business participation are not guaranteed and would depend on General Atomics' subcontracting strategy.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The specific Inspector General for the Department of Defense would have jurisdiction over investigations into fraud, waste, or abuse. Transparency is limited due to the sole-source nature and the sensitive R&D focus, making public oversight more challenging.
Related Government Programs
- Hypersonics Weapons System Development
- Advanced Aerospace Research
- Defense Research and Development
- Advanced Materials Research
- Propulsion Systems Development
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns (CPFF)
- Limited transparency on performance metrics
Tags
defense, department-of-defense, department-of-the-army, research-and-development, hypersonics, general-atomics, sole-source, cost-plus-fixed-fee, alabama, advanced-technology, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $46.3 million to GENERAL ATOMICS. HYPERSONICS TECHNOLOGY DEMONSTRATION PROGRAM SUPPORT
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 Army).
What is the total obligated amount?
The obligated amount is $46.3 million.
What is the period of performance?
Start: 2019-09-30. End: 2023-12-31.
What is the specific justification provided for awarding this contract on a sole-source basis?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For advanced R&D like hypersonics, justifications often cite unique capabilities, proprietary technology, or the need for specialized expertise possessed by only one entity. A full understanding would require accessing the contract's justification and approval (J&A) document.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar R&D efforts?
The Cost Plus Fixed Fee (CPFF) contract type is common for research and development efforts where the scope of work is not precisely defined at the outset, or where innovation and exploration are key objectives. It allows the contractor to incur costs deemed reasonable and allocable, plus a predetermined fixed fee representing profit. While it offers flexibility for R&D, it carries a risk of cost overruns if the government's oversight is insufficient, as the contractor is incentivized to incur costs to cover the fixed fee. Other R&D contract types include Cost Plus Incentive Fee (CPIF), which adds performance incentives, or Firm-Fixed-Price (FFP) for well-defined R&D projects, though FFP is less common for exploratory work.
What are the key performance indicators (KPIs) used to measure the success of this hypersonics R&D contract?
The provided data does not specify the key performance indicators (KPIs) for this contract. For R&D contracts, KPIs often relate to achieving specific technical milestones, demonstrating proof-of-concept, successful testing of prototypes, adherence to development schedules, and meeting defined performance parameters (e.g., speed, maneuverability, thermal resistance). Given the sole-source and R&D nature, these KPIs are likely detailed within the contract's Statement of Work (SOW) and are subject to government review and acceptance. Without access to the SOW, a precise understanding of success metrics is not possible.
What is General Atomics' track record in delivering on similar advanced technology R&D contracts for the DoD?
General Atomics has a significant track record in developing advanced technologies for the Department of Defense, particularly in areas such as unmanned aerial systems (e.g., Predator, Reaper), advanced propulsion, and directed energy systems. They are a well-established defense contractor with extensive experience in complex R&D programs. While specific performance details on past contracts are often not publicly disclosed, their continued selection for high-value, technologically advanced projects suggests a history of successful delivery and capability in meeting DoD requirements in demanding R&D domains.
How does the total contract value of $46.3 million compare to overall DoD spending on hypersonics research?
The total contract value of $46.3 million represents a specific investment within the broader Department of Defense (DoD) hypersonics portfolio. The DoD has allocated billions of dollars across multiple services and agencies towards hypersonics research, development, testing, and evaluation over the past several years. This single contract with General Atomics is one component of that larger strategic investment. While significant in its own right, it should be viewed as part of a much larger, multi-faceted national effort to develop and field advanced hypersonic capabilities, which involves numerous other contracts and programs.
What are the potential risks associated with the long contract duration (over 4 years) for this R&D project?
A long contract duration, such as the 1553 days (over 4 years) for this hypersonics R&D project, presents several potential risks. Firstly, technology can rapidly evolve, meaning the initial requirements or technological approaches might become outdated before the project concludes. Secondly, cost estimation becomes more challenging over extended periods, increasing the risk of budget overruns. Thirdly, maintaining consistent government oversight and program management continuity over such a long span can be difficult. Finally, the longer the duration, the greater the potential impact of unforeseen external factors (e.g., shifts in strategic priorities, economic changes) on the project's viability and ultimate success.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W50RAJ19R0001
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 678 DISCOVERY DR, HUNTSVILLE, AL, 35806
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: $46,332,125
Exercised Options: $46,332,125
Current Obligation: $46,263,305
Actual Outlays: $5,988,178
Subaward Activity
Number of Subawards: 21
Total Subaward Amount: $27,433,053
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-09-30
Current End Date: 2023-12-31
Potential End Date: 2023-12-31 00:00:00
Last Modified: 2023-04-11
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