DoD awards $391M for Aircraft Manufacturing, raising concerns about competition and taxpayer impact

Contract Overview

Contract Amount: $391,003,015 ($391.0M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-05-14

End Date: 2015-03-31

Contract Duration: 1,782 days

Daily Burn Rate: $219.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: FY 09 SUPPLEMENTAL (PRTA) HARDWARE, LRIP I AND CERDEC REQUIREMENTS.

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $391.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: FY 09 SUPPLEMENTAL (PRTA) HARDWARE, LRIP I AND CERDEC REQUIREMENTS. Key points: 1. Significant contract value of $391M for aircraft manufacturing. 2. Sole-source award to General Atomics Aeronautical Systems, Inc. limits competition. 3. Potential taxpayer impact due to lack of competitive bidding. 4. Contract duration of 1782 days suggests long-term commitment.

Value Assessment

Rating: questionable

The contract value of $391M is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar aircraft manufacturing contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition raises concerns about the efficient use of taxpayer funds, as a more competitive process could have yielded a lower price.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. Limited visibility into the justification for a sole-source award. Long contract duration could lock in potentially suboptimal pricing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value
Long contract duration

Positive Signals

Definitive contract type
Specific sector focus

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, a critical area for defense spending. Benchmarks for this sector are highly variable based on aircraft type and complexity.

Small Business Impact

The data indicates this contract was not awarded to small businesses, suggesting a focus on large, established aerospace manufacturers.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the justification is sound and that the pricing is fair and reasonable.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competition.
Long contract duration (1782 days) may lock in unfavorable terms.
No indication of small business participation.
High contract value requires strong justification for sole-sourcing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $391.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. FY 09 SUPPLEMENTAL (PRTA) HARDWARE, LRIP I AND CERDEC REQUIREMENTS.

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 Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $391.0 million.

What is the period of performance?

Start: 2010-05-14. End: 2015-03-31.

What was the specific justification for awarding this contract on a sole-source basis, and was a market research conducted to confirm no other capable vendors existed?

The justification for a sole-source award is crucial for understanding the procurement strategy. Without detailed documentation, it's impossible to ascertain if alternative vendors were considered or if unique capabilities necessitated a single source. This information is vital for assessing the value and potential risks associated with the contract.

How does the awarded price of $391M compare to industry benchmarks for similar aircraft manufacturing contracts, especially considering the lack of competition?

Benchmarking the $391M price against similar contracts is challenging without competitive data. However, the absence of competition inherently raises the risk of a non-optimal price. A thorough review would involve comparing specifications, production volumes, and contract terms with publicly available data or expert analysis to identify potential cost deviations.

What are the key performance metrics and oversight mechanisms in place to ensure the effectiveness and efficiency of this long-term, sole-source contract?

For a long-term, sole-source contract, robust oversight is paramount. Key performance metrics should be clearly defined and tracked, focusing on delivery schedules, quality standards, and cost control. Regular reviews and audits by the Department of the Army are essential to ensure the contractor meets obligations and that the investment remains effective and provides good value.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Atomics

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: $391,003,015

Exercised Options: $391,003,015

Current Obligation: $391,003,015

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline