DoD's $66.8M Minuteman III propulsion engineering contract awarded to ATK Launch Systems LLC

Contract Overview

Contract Amount: $66,844,724 ($66.8M)

Contractor: ATK Launch Systems LLC

Awarding Agency: Department of Defense

Start Date: 2015-11-06

End Date: 2021-09-30

Contract Duration: 2,155 days

Daily Burn Rate: $31.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF THE PURPOSE OF THIS CONTRACT IS TO PROVIDE ENGINEERING SERVICES FOR THE PROPULSION SYSTEM OF THE MINUTEMAN III MISSILE.

Place of Performance

Location: CORINNE, BOX ELDER County, UTAH, 84307

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $66.8 million to ATK LAUNCH SYSTEMS LLC for work described as: IGF::CT::IGF THE PURPOSE OF THIS CONTRACT IS TO PROVIDE ENGINEERING SERVICES FOR THE PROPULSION SYSTEM OF THE MINUTEMAN III MISSILE. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2155 days indicates a long-term need for these specialized engineering services. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure can incentivize contractor efficiency while managing costs. 4. The contract's focus on the Minuteman III missile's propulsion system highlights its critical role in national defense infrastructure. 5. The geographic location of the contractor in Utah may have implications for regional economic impact and workforce development. 6. The absence of small business set-asides suggests the primary contractor is not a small business, and subcontracting opportunities are not explicitly mandated.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without direct comparisons for similar, highly specialized missile propulsion engineering services. The Cost Plus Fixed Fee (CPFF) structure means the final cost is dependent on actual expenses plus a negotiated fixed fee, making a direct price comparison difficult. However, the total award amount of approximately $66.8 million over nearly six years suggests a significant investment in maintaining critical defense assets. Further analysis would require comparing the contractor's fee and overhead rates against industry standards for similar defense engineering work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this specialized engineering service. While multiple bidders are positive, the exact level of competition and its impact on price discovery would depend on the technical qualifications required and the number of capable firms in the market.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions, ensuring the government receives the best value for its investment.

Public Impact

The primary beneficiary is the Department of Defense, ensuring the continued operational readiness of the Minuteman III missile system. Services delivered include critical engineering support for the propulsion system, vital for missile reliability and performance. The geographic impact is primarily centered in Utah, where ATK Launch Systems LLC is located, potentially supporting local jobs and the regional aerospace/defense industry. Workforce implications include the employment of specialized engineers and technical staff required for complex propulsion system analysis and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not closely monitored.
Reliance on a single contractor for critical propulsion system engineering could pose a risk if performance issues arise.
The specialized nature of the work may limit the pool of potential future contractors, impacting future competition.
The long contract duration could lead to technological obsolescence if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Contractor (ATK Launch Systems LLC) likely possesses specialized expertise crucial for Minuteman III propulsion.
The contract addresses a critical national defense asset, ensuring its continued functionality.
The fixed fee component of the CPFF contract provides some cost certainty for the government.
The duration suggests a stable, long-term requirement, allowing for focused engineering efforts.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the aerospace and defense industry. The market for specialized missile system engineering is highly concentrated, with a few key players possessing the necessary expertise and security clearances. Spending in this niche is driven by national security requirements and the lifecycle management of strategic weapon systems. Comparable spending benchmarks would typically involve other contracts for strategic missile maintenance, upgrades, or engineering support, often awarded by agencies like the Department of Defense.

Small Business Impact

This contract was not awarded as a small business set-aside, and the 'sb' field is false, indicating no explicit requirement for small business participation. Consequently, there are no direct subcontracting implications mandated by this award for small businesses. The primary contractor, ATK Launch Systems LLC, is likely a large business, and opportunities for small businesses would depend on their subcontracting decisions rather than a contractual obligation from this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. The Inspector General's office for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Minuteman III Sustainment Program
ICBM Modernization Programs
Aerospace Engineering Services Contracts
Department of Defense Propulsion Systems Maintenance
Strategic Weapons System Support

Risk Flags

Potential for cost growth in CPFF contracts.
Long-term reliance on a single contractor for critical systems.
Aging infrastructure requires continuous, costly sustainment.
Limited competition pool for highly specialized defense engineering.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.8 million to ATK LAUNCH SYSTEMS LLC. IGF::CT::IGF THE PURPOSE OF THIS CONTRACT IS TO PROVIDE ENGINEERING SERVICES FOR THE PROPULSION SYSTEM OF THE MINUTEMAN III MISSILE.

Who is the contractor on this award?

The obligated recipient is ATK LAUNCH SYSTEMS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $66.8 million.

What is the period of performance?

Start: 2015-11-06. End: 2021-09-30.

What is the track record of ATK Launch Systems LLC with the Department of Defense, particularly on missile system contracts?

ATK Launch Systems LLC, now part of Northrop Grumman, has a long and extensive history of supporting U.S. defense programs, including significant contributions to missile systems. Their involvement with the Minuteman III program predates this specific contract, often encompassing manufacturing, integration, and sustainment activities. Historically, the company has demonstrated capability in handling complex, high-stakes defense projects. Performance on previous contracts would be detailed in government performance assessment reports (e.g., CPARS), which are not publicly available in this dataset but are crucial for a full assessment. However, their continued role in defense suggests a generally positive track record, though specific issues or successes on prior missile-related contracts would require deeper investigation into historical performance data.

How does the $66.8 million award compare to other engineering services contracts for similar missile systems?

Directly comparing the $66.8 million award for Minuteman III propulsion engineering services to 'similar' contracts is challenging due to the unique nature of strategic missile systems and the specialized expertise required. Contracts for engineering services on legacy systems like the Minuteman III often involve extensive lifecycle support, upgrades, and sustainment, which can lead to significant long-term investments. The duration of this contract (over 5 years) means the annual average spending was approximately $12-13 million. This figure needs to be contextualized against the complexity of the propulsion system, the specific tasks required (e.g., analysis, testing, design modifications), and the limited number of qualified contractors. Without access to detailed statements of work and performance metrics for comparable contracts, a precise value-for-money assessment is difficult, but the amount reflects the critical and specialized nature of maintaining a strategic deterrent.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure for the government?

The primary risk for the government with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the 'fixed fee' component provides some predictability for the contractor's profit, the 'cost' portion is subject to actual expenses incurred. If the contractor's costs escalate beyond initial estimates due to inefficiencies, unforeseen technical challenges, or poor management, the total contract value can increase significantly. Effective government oversight is crucial to monitor expenditures, ensure costs are reasonable and allocable, and prevent scope creep. The CPFF structure can also incentivize contractors to incur more costs if they believe it will lead to a larger fee base, although the fixed fee mitigates this to some extent compared to pure cost-plus contracts. Robust auditing and performance monitoring are essential to mitigate these risks.

How effective has ATK Launch Systems LLC been in delivering engineering services for critical defense systems based on historical performance?

Assessing the historical effectiveness of ATK Launch Systems LLC (now Northrop Grumman) in delivering engineering services for critical defense systems requires access to Contractor Performance Assessment Reporting System (CPARS) data, which is typically not publicly available. However, the company's sustained role as a prime contractor and key supplier for major defense programs, including the Minuteman III and other strategic systems, suggests a generally positive performance record. Their continued selection for complex and vital projects implies a demonstrated ability to meet stringent technical requirements, manage complex supply chains, and adhere to security protocols. Any specific performance issues or exceptional successes would be documented in detailed government evaluations, but their longevity and continued business in this sector serve as an indicator of consistent capability.

What is the historical spending trend for engineering services related to the Minuteman III missile system?

Historical spending on engineering services for the Minuteman III missile system has been substantial and ongoing, reflecting the system's extended service life and the need for continuous sustainment and modernization. While specific figures for 'engineering services' alone are difficult to isolate without detailed budget breakdowns, the overall sustainment and upgrade costs for the Minuteman III program have run into billions of dollars over the decades. This includes funding for research, development, testing, evaluation, and sustainment engineering. Contracts like the one awarded to ATK Launch Systems LLC represent a portion of this broader investment. Spending fluctuates based on modernization initiatives, component obsolescence issues, and readiness requirements. The trend generally shows consistent, significant investment required to maintain the operational readiness of this aging but critical strategic asset.

What are the implications of awarding this contract through 'full and open competition' versus other methods for taxpayer value?

Awarding this contract through 'full and open competition' generally maximizes taxpayer value. This method allows any responsible source to submit a bid, fostering a competitive environment where multiple companies vie for the contract. This competition typically drives down prices, encourages innovation, and ensures the government selects the offer that provides the best overall value (considering price, technical approach, and past performance). In contrast, methods like sole-source or limited competition often result in higher prices due to the lack of competitive pressure and may limit the pool of innovative solutions available. For a specialized service like missile propulsion engineering, ensuring a robust competitive process, even among a limited number of qualified bidders, is crucial for achieving cost-effectiveness and optimal performance outcomes for the taxpayer.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 9160 N HWY 83, CORINNE, UT, 84307

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: $67,307,733

Exercised Options: $67,307,733

Current Obligation: $66,844,724

Actual Outlays: $2,385,610

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $20,418,020

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline