NASA's $2.38B Boeing SLS Stages Contract Faces Scrutiny Amidst Limited Competition
Contract Overview
Contract Amount: $2,382,243,189 ($2.4B)
Contractor: THE Boeing Company
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2019-10-16
End Date: 2028-07-01
Contract Duration: 3,181 days
Daily Burn Rate: $748.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: SPACE LAUNCH SYSTEM (SLS) STAGES PRODUCTION AND EVOLUTION CONTRACT (SPEC)
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35824
State: Alabama Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $2.38 billion to THE BOEING COMPANY for work described as: SPACE LAUNCH SYSTEM (SLS) STAGES PRODUCTION AND EVOLUTION CONTRACT (SPEC) Key points: 1. Significant investment in a critical component for NASA's Artemis program. 2. Sole-source nature raises questions about cost-effectiveness and potential for overruns. 3. High-risk contract type (Cost Plus Incentive Fee) requires robust oversight. 4. Focus on advanced aerospace manufacturing within the guided missile and space vehicle sector.
Value Assessment
Rating: questionable
The contract's value of $2.38 billion for SLS stages production is substantial. Without competitive bidding, it's difficult to benchmark pricing against similar large-scale aerospace manufacturing efforts, raising concerns about potential overpayment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for such a large contract could result in taxpayers bearing a higher financial burden than if multiple bidders had vied for the work.
Public Impact
Impacts the Artemis program's ability to reach the Moon and beyond. Affects the aerospace industry's supply chain and workforce. Potential for cost overruns could divert funds from other scientific endeavors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Incentive Fee contract type can incentivize cost overruns.
- Long duration of the contract increases exposure to risks.
- Lack of clear performance metrics for incentive fees.
Positive Signals
- Supports a critical national space exploration initiative.
- Leverages established contractor expertise in complex aerospace manufacturing.
- Contract aims to ensure production continuity for a vital program.
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a high-cost, high-technology area. Benchmarks are difficult due to the unique nature of space launch systems, but significant government investment is typical for such programs.
Small Business Impact
The contract is awarded to a large prime contractor, The Boeing Company. There is no explicit information provided regarding subcontracting opportunities for small businesses within this specific contract data.
Oversight & Accountability
Given the sole-source nature and cost-plus contract type, robust oversight by NASA is crucial to manage costs, ensure performance, and hold the contractor accountable for delivering the SLS stages.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- National Aeronautics and Space Administration Contracting
- National Aeronautics and Space Administration Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost-plus contract type is susceptible to cost overruns.
- Long contract duration increases exposure to unforeseen risks.
- Dependence on a single contractor for critical components.
- Potential for schedule delays impacting program milestones.
Tags
guided-missile-and-space-vehicle-manufac, national-aeronautics-and-space-administr, al, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $2.38 billion to THE BOEING COMPANY. SPACE LAUNCH SYSTEM (SLS) STAGES PRODUCTION AND EVOLUTION CONTRACT (SPEC)
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
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 $2.38 billion.
What is the period of performance?
Start: 2019-10-16. End: 2028-07-01.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or critical program timelines. NASA should provide detailed documentation supporting this decision. To ensure fair pricing, rigorous cost analysis, independent government estimates, and strong negotiation tactics are essential, alongside continuous monitoring of expenditures and performance metrics.
How will NASA mitigate the risks associated with a Cost Plus Incentive Fee contract for such a large-scale, long-term project?
Mitigation strategies include clearly defined performance metrics tied to incentive fees, robust independent cost estimation, stringent oversight of contractor expenditures, and regular performance reviews. NASA must ensure that the incentive structure genuinely rewards efficiency and cost control, rather than simply covering increased costs, and maintain open communication channels with the contractor.
What is the projected cost per unit for the SLS stages, and how does this compare to alternative launch systems or historical data?
Specific per-unit cost data for SLS stages is often proprietary or not publicly disclosed in detail. However, estimates suggest a very high cost per launch due to the complexity and scale of the system. Comparisons to other heavy-lift rockets, both current and historical, indicate SLS is among the most expensive, necessitating strong justification for its continued investment.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 499 BOEING BLVD SW, HUNTSVILLE, AL, 35824
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: $3,660,903,974
Exercised Options: $3,660,903,974
Current Obligation: $2,382,243,189
Actual Outlays: $1,982,494,462
Subaward Activity
Number of Subawards: 1438
Total Subaward Amount: $985,208,520
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-10-16
Current End Date: 2028-07-01
Potential End Date: 2028-07-01 00:00:00
Last Modified: 2026-04-13
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