NASA's $166M Engineering Services Contract Awarded to The Aerospace Corporation Faces Scrutiny for Lack of Competition

Contract Overview

Contract Amount: $166,340,225 ($166.3M)

Contractor: THE Aerospace Corporation

Awarding Agency: National Aeronautics and Space Administration

Start Date: 2020-10-01

End Date: 2028-09-30

Contract Duration: 2,921 days

Daily Burn Rate: $56.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: NASA-WIDE SPECIALIZED ENGINEERING, EVALUATION AND TEST SERVICES (NSEETS) TO PROVIDE ON/OFF-SITE PROJECT INDEPENDENT MULTIDISCIPLINARY ENGINEERING SERVICES, TESTING, CONSULTING, CONTRACTOR-ON-SITE MONITORING, AND EVALUATION OF PROJECT AND/OR PROGRAMS.

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

National Aeronautics and Space Administration obligated $166.3 million to THE AEROSPACE CORPORATION for work described as: NASA-WIDE SPECIALIZED ENGINEERING, EVALUATION AND TEST SERVICES (NSEETS) TO PROVIDE ON/OFF-SITE PROJECT INDEPENDENT MULTIDISCIPLINARY ENGINEERING SERVICES, TESTING, CONSULTING, CONTRACTOR-ON-SITE MONITORING, AND EVALUATION OF PROJECT AND/OR PROGRAMS. Key points: 1. The contract's value, exceeding $166 million, warrants a close examination of its cost-effectiveness and alignment with NASA's specialized engineering needs. 2. The sole-source award raises concerns about potential price inflation and the absence of competitive pressure to drive innovation and efficiency. 3. Performance context is crucial, as the contract covers a wide range of services including testing, consulting, and project evaluation, impacting multiple NASA programs. 4. Sector positioning within R&D highlights the critical nature of these services for NASA's mission success and technological advancement. 5. Risk indicators include the lack of competitive bidding and the potential for contractor lock-in, necessitating robust oversight.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized engineering services provided. Without competitive bids, it's difficult to assess if NASA received the best possible pricing. The contract's duration and scope suggest a significant investment, and a detailed cost-plus-fixed-fee analysis would be necessary to determine if the fixed fee is reasonable given the risks and effort involved. Comparisons to similar sole-source contracts for specialized engineering support at other federal agencies might offer some insight, but the unique requirements of NASA's aerospace missions limit direct parallels.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning NASA did not conduct a competitive bidding process. This approach is typically justified when only one responsible source is available or authorized by statute. The lack of competition means that potential cost savings and innovative solutions that might arise from a bidding process were not realized. This raises questions about whether NASA explored all avenues for competition or if there were specific circumstances that precluded it.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive pressure. Without multiple bids, there's less assurance that the price reflects the most economical option available in the market.

Public Impact

NASA's research and development programs benefit directly from the specialized engineering, evaluation, and testing services provided. The contract supports the development and assessment of complex aerospace projects, contributing to advancements in space exploration and aeronautics. Services are provided on-site and off-site, indicating a broad geographic reach within NASA's operational footprint. The contract likely supports a highly skilled technical workforce, including engineers and scientists, within The Aerospace Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may reduce incentives for contractor innovation and efficiency.
The specialized nature of services makes independent verification of value challenging.
Long contract duration (nearly 8 years) increases exposure to potential cost overruns or performance issues.

Positive Signals

The Aerospace Corporation is a well-established entity with significant experience in aerospace engineering.
The contract covers a broad range of critical engineering and testing services essential for NASA's mission.
Cost-plus-fixed-fee structure, while requiring oversight, can provide flexibility for evolving project needs.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The aerospace industry is characterized by high R&D investment, complex technological requirements, and often, specialized support services. NASA's spending in this area is critical for maintaining its leadership in space exploration and aeronautics. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of NASA's requirements and the sole-source award, but significant federal investment in specialized engineering support for major R&D programs is common.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business) indicator is also false. This suggests that small businesses are unlikely to be direct beneficiaries of this prime contract. However, the potential for subcontracting opportunities for small businesses exists, depending on the prime contractor's strategy and the specific needs of the services rendered. Without explicit subcontracting plans or goals, the impact on the small business ecosystem remains uncertain.

Oversight & Accountability

Oversight for this contract would primarily fall under NASA's contracting officers and program managers. The 'Cost Plus Fixed Fee' (CPFF) contract type necessitates careful monitoring of costs and performance to ensure the fixed fee remains justified. Transparency is enhanced through contract award databases, but detailed performance reports and cost breakdowns may not be publicly available. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

NASA Engineering and Safety Center (NESC) support services
Aerospace research and development contracts
Federal R&D spending in science and technology
NASA mission support contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns in CPFF contracts
Specialized services with limited market comparables

Frequently Asked Questions

What is this federal contract paying for?

National Aeronautics and Space Administration awarded $166.3 million to THE AEROSPACE CORPORATION. NASA-WIDE SPECIALIZED ENGINEERING, EVALUATION AND TEST SERVICES (NSEETS) TO PROVIDE ON/OFF-SITE PROJECT INDEPENDENT MULTIDISCIPLINARY ENGINEERING SERVICES, TESTING, CONSULTING, CONTRACTOR-ON-SITE MONITORING, AND EVALUATION OF PROJECT AND/OR PROGRAMS.

Who is the contractor on this award?

The obligated recipient is THE AEROSPACE CORPORATION.

Which agency awarded this contract?

Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).

What is the total obligated amount?

The obligated amount is $166.3 million.

What is the period of performance?

Start: 2020-10-01. End: 2028-09-30.

What is the track record of The Aerospace Corporation in delivering similar specialized engineering services to NASA or other federal agencies?

The Aerospace Corporation has a long-standing relationship with NASA and the U.S. Department of Defense, providing a wide array of engineering, analysis, and technical support services. They are known for their expertise in space systems engineering, program management, and advanced technology development. Their historical performance typically involves complex, high-stakes projects where independent technical assessment and specialized expertise are paramount. While specific performance metrics for this particular contract are not detailed here, the company's general reputation suggests a capacity to handle sophisticated engineering challenges. However, the absence of competition in this sole-source award means that NASA's internal evaluations of past performance were the primary basis for the award, rather than a comparative assessment against other potential providers.

How does the pricing structure (Cost Plus Fixed Fee) compare to industry standards for similar specialized engineering services, and what are the implications for value for money?

Cost Plus Fixed Fee (CPFF) contracts are common for research and development or services where the scope of work is not precisely defined at the outset, allowing for flexibility. The 'cost' portion covers allowable direct and indirect costs incurred by the contractor, while the 'fixed fee' represents the contractor's profit. For specialized engineering services, CPFF can be advantageous when project requirements evolve. However, it places a significant burden on the government to meticulously audit costs and ensure they are reasonable and allocable. Industry standards for fixed fees in CPFF contracts typically range from 6% to 15% of the estimated cost, depending on the risk, complexity, and nature of the work. Without access to the specific estimated costs and the negotiated fee for this NASA contract, a direct comparison is difficult. The primary implication for value for money is the need for robust government oversight to prevent cost overruns and ensure the fee is commensurate with the contractor's performance and risk.

What are the primary risks associated with a sole-source award for critical engineering services, and how are they mitigated?

The primary risks associated with a sole-source award for critical engineering services include potential price inflation due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and the risk of contractor lock-in. Without competitive pressure, the contractor may not feel compelled to offer the most cost-effective solutions. Mitigation strategies employed by agencies like NASA typically involve rigorous negotiation of contract terms, including the fee structure, and robust oversight mechanisms. This includes detailed cost analysis, performance monitoring, and regular reviews to ensure the contractor is meeting all requirements and that costs remain reasonable. Agencies may also conduct market research to ensure that a sole-source justification is truly warranted and that no viable alternatives exist. For this contract, NASA would need to actively manage the relationship and performance to ensure value is achieved despite the lack of competition.

How does this contract contribute to NASA's overall mission objectives and strategic goals in space exploration and aeronautics?

This contract, NASA-WIDE SPECIALIZED ENGINEERING, EVALUATION AND TEST SERVICES (NSEETS), directly supports NASA's core mission objectives by providing essential multidisciplinary engineering services, testing, consulting, and evaluation. These services are critical for the design, development, verification, and validation of complex aerospace systems, spacecraft, launch vehicles, and aeronautical technologies. By ensuring the integrity and performance of projects and programs through independent engineering expertise and rigorous testing, the contract helps mitigate technical risks, enhance safety, and improve the reliability of NASA's endeavors. This ultimately contributes to the success of space exploration missions, scientific discoveries, and advancements in aeronautics, aligning with NASA's strategic goals of pushing the boundaries of human knowledge and capability in space and the atmosphere.

What is the historical spending pattern for similar specialized engineering and testing services at NASA, and how does this contract's value compare?

NASA historically spends significant amounts on specialized engineering, evaluation, and testing services due to the complex and high-risk nature of its missions. While precise historical data for 'NSEETS' or directly comparable sole-source contracts isn't provided, NASA frequently awards large contracts in areas like systems engineering, advanced research, and mission support. The $166 million value over approximately eight years ($20.75 million annually on average) is substantial but not necessarily out of line for comprehensive, long-term specialized support required by an agency of NASA's scale and technical demands. To provide a more precise comparison, one would need to analyze historical spending on similar service categories, contract types (especially CPFF), and durations across different NASA centers and programs. However, the sole-source nature of this award makes direct comparisons to competitively bid contracts less meaningful in terms of price benchmarking.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 80GSFC19R0074

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2310 EAST EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $166,340,225

Exercised Options: $166,340,225

Current Obligation: $166,340,225

Actual Outlays: $144,605,851

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $3,466,825

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 80GSFC19D0011

IDV Type: IDC

Timeline