DoD's $838M EELV Contract for Launch Capability Awarded to United Launch Services, LLC
Contract Overview
Contract Amount: $837,794,460 ($837.8M)
Contractor: United Launch Services, LLC
Awarding Agency: Department of Defense
Start Date: 2012-10-01
End Date: 2014-02-03
Contract Duration: 490 days
Daily Burn Rate: $1.7M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: EELV FY13 LAUNCH CABABILITY
Place of Performance
Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $837.8 million to UNITED LAUNCH SERVICES, LLC for work described as: EELV FY13 LAUNCH CABABILITY Key points: 1. Significant spending on a critical defense capability. 2. Sole-source award raises questions about price discovery and competition. 3. Potential for cost overruns given the Cost Plus Incentive Fee structure. 4. The contract falls within the Guided Missile and Space Vehicle Manufacturing sector.
Value Assessment
Rating: questionable
The total award amount is substantial. Without competitive bidding, it's difficult to assess if the price is fair and reasonable compared to market alternatives or historical data for similar launch services.
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, LLC. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for this significant expenditure means taxpayers may not be receiving the best possible value, as pricing is not driven by market forces.
Public Impact
Ensures critical launch capabilities for national security missions. Potential for taxpayer funds to be used inefficiently due to sole-source award. Impacts the broader aerospace and defense industry's competitive landscape.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of transparency in pricing
Positive Signals
- Ensures critical launch capability
- Long-term contract provides stability
Sector Analysis
This contract is within the Guided Missile and Space Vehicle Manufacturing sector, which is a high-cost, high-technology area. Spending benchmarks are difficult to establish due to the specialized nature and limited number of providers.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. The prime contractor, United Launch Services, LLC, is a large entity, suggesting limited direct opportunities for small businesses.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure cost control and performance. The Department of the Air Force should actively monitor expenditures and contractor performance against contract requirements.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Incentive Fee structure may lead to cost overruns.
- Lack of transparency regarding the justification for sole-sourcing.
- Potential for inefficient use of taxpayer funds due to non-competitive nature.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, co, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $837.8 million to UNITED LAUNCH SERVICES, LLC. EELV FY13 LAUNCH CABABILITY
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 $837.8 million.
What is the period of performance?
Start: 2012-10-01. End: 2014-02-03.
What was the justification for awarding this contract on a sole-source basis instead of pursuing a competitive process?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternative sources. For EELV launch capability, specific technical requirements or national security imperatives might have precluded a competitive bid, though this should be rigorously documented and justified to ensure taxpayer value.
What are the potential risks associated with the Cost Plus Incentive Fee (CPIF) contract type for this acquisition?
CPIF contracts share costs and profits between the government and contractor, incentivizing performance. However, they can lead to cost overruns if targets are not well-defined or if the contractor has less incentive to control costs. Close monitoring of cost targets and performance metrics is crucial to mitigate these risks.
How does the $838 million expenditure align with historical spending on similar launch capabilities, and what is the projected long-term cost?
Without specific historical data for comparable sole-source EELV launches, it's challenging to benchmark this $838 million figure. The long-term cost will depend heavily on the contract's duration, performance incentives, and any future modifications or follow-on contracts awarded without competition.
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 (UEI: 601307601)
Address: 9501 E PANORAMA 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: $3,361,533,630
Exercised Options: $3,361,533,630
Current Obligation: $837,794,460
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-10-01
Current End Date: 2014-02-03
Potential End Date: 2019-02-03 00:00:00
Last Modified: 2019-12-16
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