DoD's $1.29B Launch Capability Contract Awarded to United Launch Services, LLC Under Sole-Source Basis
Contract Overview
Contract Amount: $1,285,783,797 ($1.3B)
Contractor: United Launch Services, LLC
Awarding Agency: Department of Defense
Start Date: 2011-07-01
End Date: 2019-10-21
Contract Duration: 3,034 days
Daily Burn Rate: $423.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: FY11-12 LAUNCH CAPABILITY
Place of Performance
Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $1.29 billion to UNITED LAUNCH SERVICES, LLC for work described as: FY11-12 LAUNCH CAPABILITY Key points: 1. Significant spending on launch capability by the Department of Defense. 2. Sole-source award to United Launch Services, LLC raises questions about competition. 3. Long contract duration (2011-2019) with a cost-plus incentive fee structure. 4. The contract falls under Guided Missile and Space Vehicle Manufacturing. 5. No small business participation noted.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure suggests potential for cost overruns. Without competitive bidding, it's difficult to assess if the $1.29B price represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to United Launch Services, LLC. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition in awarding a $1.29B contract likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Taxpayers funded over $1.29 billion for launch capabilities over an eight-year period. The contract supported the Guided Missile and Space Vehicle Manufacturing sector. Lack of transparency due to sole-source award may hinder public trust. Long-term commitment to a single provider could stifle innovation in the launch services market.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus incentive fee contract
- Lack of small business participation
- Long contract duration
Positive Signals
- Ensured launch capability for DoD
- Potential for cost savings through incentive fees
Sector Analysis
This contract falls within the Defense sector, specifically related to guided missile and space vehicle manufacturing. Spending benchmarks for such specialized capabilities are difficult to establish due to their unique nature and high barriers to entry.
Small Business Impact
The data indicates no small business participation in this contract. This suggests that the prime contractor, United Launch Services, LLC, did not subcontract with small businesses for this significant award.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency. Further oversight would be needed to assess the effectiveness of monitoring costs and performance under the cost-plus incentive fee structure.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Limited transparency
- No small business participation
- Long contract duration
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 $1.29 billion to UNITED LAUNCH SERVICES, LLC. FY11-12 LAUNCH CAPABILITY
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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $1.29 billion.
What is the period of performance?
Start: 2011-07-01. End: 2019-10-21.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The provided data indicates the contract was 'NOT COMPETED'. A sole-source award typically occurs when only one responsible source is available or when a compelling urgency exists. Without further documentation, the specific justification remains unclear. It is crucial to understand if market research was conducted to identify potential competitors or if unique capabilities of United Launch Services, LLC necessitated this approach.
How effectively did the cost-plus incentive fee structure control costs and incentivize performance for United Launch Services, LLC?
The cost-plus incentive fee (CPIF) structure aims to share cost savings and overruns between the government and the contractor, incentivizing efficiency. To assess its effectiveness here, one would need to analyze the final contract cost against the target cost, the contractor's performance against established metrics, and any adjustments made due to incentive clauses. Without this detailed financial and performance data, the true impact of the CPIF is difficult to determine.
What was the overall impact of this long-term, sole-source contract on innovation and competition within the guided missile and space vehicle manufacturing sector?
Long-term sole-source contracts can potentially stifle innovation by reducing the incentive for the incumbent to innovate aggressively and by creating barriers to entry for new competitors. While ensuring a stable capability, this approach may lead to a less dynamic market. Evaluating the sector's technological advancements during the contract period and the competitive landscape post-contract would provide insights into the broader impact.
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: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: United Launch Alliance, L.L.C
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: $1,314,033,625
Exercised Options: $1,314,033,625
Current Obligation: $1,285,783,797
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-07-01
Current End Date: 2019-10-21
Potential End Date: 2019-10-21 00:00:00
Last Modified: 2022-09-23
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