DoD Awards $1.36B Letter Contract to United Launch Services for Satellite Missions
Contract Overview
Contract Amount: $1,363,572,081 ($1.4B)
Contractor: United Launch Services, LLC
Awarding Agency: Department of Defense
Start Date: 2011-05-02
End Date: 2015-02-09
Contract Duration: 1,379 days
Daily Burn Rate: $988.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LETTER CONTRACT FOR MUOS-2, WGS-6, NROL-65
Place of Performance
Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $1.36 billion to UNITED LAUNCH SERVICES, LLC for work described as: LETTER CONTRACT FOR MUOS-2, WGS-6, NROL-65 Key points: 1. Significant investment in critical satellite programs (MUOS-2, WGS-6, NROL-65). 2. Sole-source award to United Launch Services, raising questions about competition. 3. Potential for cost overruns or inefficiencies due to lack of competitive pressure. 4. Focus on space-based communication and intelligence capabilities.
Value Assessment
Rating: questionable
The contract value of $1.36 billion for a letter contract is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar launch service contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to United Launch Services. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition may result in the government paying a premium for these critical launch services, impacting taxpayer funds.
Public Impact
Ensures continued operation and expansion of vital military communication and intelligence networks. Supports national security by providing reliable access to space-based assets. Potential for delays or increased costs if oversight is insufficient due to sole-source nature.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Potential for cost escalation
Positive Signals
- Supports critical national security assets
- Firm fixed price contract type
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, specifically for launch services. Spending in this area is driven by national security and technological advancement, with significant government investment.
Small Business Impact
The data does not indicate any specific provisions or benefits for small businesses in this sole-source contract award.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight from the Department of the Air Force to ensure cost control and performance, despite the absence of competitive pressure.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in cost justification
- Reliance on a single contractor for critical services
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, co, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.36 billion to UNITED LAUNCH SERVICES, LLC. LETTER CONTRACT FOR MUOS-2, WGS-6, NROL-65
Who is the contractor on this award?
The obligated recipient is UNITED LAUNCH SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $1.36 billion.
What is the period of performance?
Start: 2011-05-02. End: 2015-02-09.
What was the justification for awarding this contract on a sole-source basis rather than through a competitive process?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. For critical satellite launches, specific launch vehicles or integration expertise might be proprietary or require extensive lead times, making competition impractical or detrimental to mission timelines. Further investigation into the specific program requirements and market analysis conducted by the agency would clarify the rationale.
What mechanisms are in place to ensure cost reasonableness and prevent potential overruns given the lack of competition?
With a sole-source, firm-fixed-price contract, the government has locked in a price. However, cost reasonableness is still a concern. Robust oversight, including detailed technical reviews, performance monitoring, and potentially audit rights, are crucial. The agency should have conducted thorough cost analyses prior to award and should actively manage contract performance to identify any deviations or potential issues that could impact the final cost.
How does this contract contribute to the overall effectiveness and readiness of the MUOS, WGS, and NROL systems?
This contract is essential for the successful deployment and operation of specific satellites within the MUOS (Mobile User Objective System), WGS (Wideband Global SATCOM), and NROL (National Reconnaissance Office) programs. These systems are critical for secure global communications, intelligence gathering, and command and control. Awarding this contract ensures the continued functionality and expansion of these vital national security assets, directly impacting military readiness and operational effectiveness.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: SPACE VEHICLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: United Launch Alliance, L.L.C (UEI: 601307601)
Address: 9100 E MINERAL CIR, CENTENNIAL, CO, 80112
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,363,572,081
Exercised Options: $1,363,572,081
Current Obligation: $1,363,572,081
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-05-02
Current End Date: 2015-02-09
Potential End Date: 2015-02-09 00:00:00
Last Modified: 2015-10-29
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