Space Force Awards $83.4M Contract to SpaceX for Launch Services, Highlighting Firm Fixed Price Structure
Contract Overview
Contract Amount: $83,350,159 ($83.4M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2021-03-09
End Date: 2025-10-21
Contract Duration: 1,687 days
Daily Burn Rate: $49.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LAUNCH SERVICE FOR UNITED STATES SPACE FORCE MISSION 36
Place of Performance
Location: HAWTHORNE, LOS ANGELES County, CALIFORNIA, 90250
Plain-Language Summary
Department of Defense obligated $83.4 million to SPACE EXPLORATION TECHNOLOGIES CORP. for work described as: LAUNCH SERVICE FOR UNITED STATES SPACE FORCE MISSION 36 Key points: 1. Significant contract value of $83.4 million awarded to a single provider. 2. SpaceX, a major player in the commercial space industry, is the sole awardee. 3. The contract involves launch services, a critical component of national security and space exploration. 4. The sector is characterized by high technological barriers and limited, specialized providers.
Value Assessment
Rating: good
The $83.4 million contract price appears reasonable given the specialized nature of space launch services. Benchmarking against similar government launch contracts would provide further context, but the firm fixed price structure suggests a degree of cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors were eligible. This competitive process is expected to drive fair pricing and ensure the government secures the best value.
Taxpayer Impact: The use of full and open competition aims to maximize taxpayer value by fostering a competitive environment for essential space launch services.
Public Impact
Ensures critical national security missions are supported with reliable space launch capabilities. Supports the advancement of the U.S. commercial space industry by providing significant contracts. Potential for technological advancements and innovation driven by government demand in the space sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Dependence on a single provider for critical launch services.
- Potential for cost overruns if unforeseen technical challenges arise.
- Geopolitical risks associated with launch capabilities.
Positive Signals
- Awarded under full and open competition.
- Firm fixed price contract provides cost predictability.
- Supports national security objectives.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on launch services. Spending in this area is critical for national security, scientific research, and commercial satellite deployment, often involving high-value, complex procurements.
Small Business Impact
The data does not indicate any specific subcontracting or participation by small businesses in this particular award. The nature of space launch services often involves large, specialized prime contractors.
Oversight & Accountability
The Department of the Air Force, under the Department of Defense, is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms are expected to be in place to ensure compliance and performance.
Related Government Programs
- Nonscheduled Chartered Freight Air Transportation
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High contract value concentrated with one provider.
- Dependence on a single launch provider for critical missions.
- Potential for schedule delays due to launch complexities.
- Geopolitical factors impacting launch operations.
Tags
nonscheduled-chartered-freight-air-trans, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $83.4 million to SPACE EXPLORATION TECHNOLOGIES CORP.. LAUNCH SERVICE FOR UNITED STATES SPACE FORCE MISSION 36
Who is the contractor on this award?
The obligated recipient is SPACE EXPLORATION TECHNOLOGIES CORP..
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 $83.4 million.
What is the period of performance?
Start: 2021-03-09. End: 2025-10-21.
What is the historical performance of SpaceX in fulfilling government launch contracts, and how does this inform the risk assessment for this mission?
SpaceX has a strong track record of successful launches for both commercial and government entities, including NASA and the U.S. military. Their reliability and cost-effectiveness have been key factors in their selection. While past performance is a positive indicator, each mission carries unique risks related to payload, trajectory, and launch window. Continuous monitoring and robust contingency planning are essential to mitigate any potential issues.
How does the firm fixed price (FFP) structure mitigate potential cost overruns for the government, considering the inherent complexities of space launches?
The FFP structure shifts the majority of the cost risk to the contractor, SpaceX. This means SpaceX is obligated to complete the work for the agreed-upon price, regardless of unforeseen difficulties. While this provides significant cost certainty for the government, it relies on SpaceX's accurate estimation of costs and risks during the bidding process. Any significant deviations from their estimates would impact their profitability, but the government's liability is capped at the contract price.
What are the long-term implications of awarding such a significant contract to a single provider for critical space launch capabilities?
Awarding a large contract to a single provider like SpaceX can ensure mission success through specialized expertise and streamlined execution. However, it also raises concerns about market concentration and potential future reliance. The government may need to foster competition or explore alternative providers to maintain flexibility and avoid over-dependence. Balancing the benefits of specialized capability with the need for a resilient and competitive launch market is a key strategic consideration.
Industry Classification
NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Freight Air Transportation
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 ROCKET RD, HAWTHORNE, CA, 90250
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: $83,350,159
Exercised Options: $83,350,159
Current Obligation: $83,350,159
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA881120D0002
IDV Type: IDC
Timeline
Start Date: 2021-03-09
Current End Date: 2025-10-21
Potential End Date: 2028-03-31 00:00:00
Last Modified: 2025-06-09
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