DoD's $41.8M National Security Space Launch contract awarded to SpaceX for launch services
Contract Overview
Contract Amount: $41,869,305 ($41.9M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2021-08-19
End Date: 2022-08-18
Contract Duration: 364 days
Daily Burn Rate: $115.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: NATIONAL SECURITY SPACE LAUNCH PHASE 2 LAUNCH SERVICES
Place of Performance
Location: HAWTHORNE, LOS ANGELES County, CALIFORNIA, 90250
Plain-Language Summary
Department of Defense obligated $41.9 million to SPACE EXPLORATION TECHNOLOGIES CORP. for work described as: NATIONAL SECURITY SPACE LAUNCH PHASE 2 LAUNCH SERVICES Key points: 1. Contract awarded to a single provider, indicating potential for limited competition. 2. Firm Fixed Price contract type suggests cost certainty for the government. 3. Short duration of 364 days may indicate a need for interim or specific mission support. 4. The contract falls under nonscheduled chartered freight air transportation, a broad category. 5. Awarded by the Department of the Air Force, highlighting its role in space operations. 6. No small business set-aside, suggesting the primary contractor is not a small business.
Value Assessment
Rating: good
The contract value of $41.8 million for launch services appears reasonable given the nature of space launch operations, which are inherently complex and expensive. Benchmarking against similar National Security Space Launch (NSSL) contracts would provide a more precise value-for-money assessment. However, the firm fixed-price structure offers predictability in costs. The specific services rendered under this delivery order will determine the ultimate value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. However, the data indicates a single award to Space Exploration Technologies Corp. (SpaceX). Further details on the number of bids received and the evaluation process would clarify the extent of actual competition and its impact on pricing.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovation. Even with a single award, the initial competitive process helps ensure the government secures services at a fair market price.
Public Impact
Benefits the Department of Defense by providing essential launch services for national security space assets. Enables the deployment of critical payloads into orbit, supporting intelligence, surveillance, and reconnaissance missions. The services are delivered from California, a key hub for aerospace and launch activities. Supports the aerospace workforce involved in launch operations, engineering, and mission control.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for over-reliance on a single provider if future contracts continue to be awarded solely to SpaceX.
- Limited visibility into the specific performance metrics and success of individual launches under this contract.
- The broad classification of 'Nonscheduled Chartered Freight Air Transportation' may obscure the specialized nature of space launch services.
Positive Signals
- Awarded through full and open competition, indicating a structured procurement process.
- Firm Fixed Price contract provides cost certainty for the government.
- SpaceX is a known entity in the space launch industry, suggesting a degree of established capability.
Sector Analysis
This contract falls within the broader aerospace and defense sector, specifically focusing on launch services for national security payloads. The National Security Space Launch (NSSL) program is a critical government initiative to ensure reliable access to space for national security missions. Spending in this area is substantial, driven by the need to maintain a robust space architecture. Comparable spending benchmarks would involve analyzing other NSSL contracts and commercial launch service agreements.
Small Business Impact
The data indicates that this contract was not set aside for small businesses, and the primary awardee, SpaceX, is a large business. There is no explicit information on subcontracting plans for small businesses within this specific award. The impact on the small business ecosystem would depend on whether SpaceX engages small businesses as subcontractors for support services.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified launch services. Transparency is facilitated through contract award databases, though detailed performance reports may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- National Security Space Launch (NSSL)
- Space Launch Services
- Department of Defense Space Programs
- Air Force Satellite Programs
Risk Flags
- Potential for single-source dependency in future procurements.
- Inherent risks associated with space launch operations (failure, delays).
Tags
defense, space-launch, national-security, department-of-defense, air-force, firm-fixed-price, full-and-open-competition, california, large-contract, aerospace
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.9 million to SPACE EXPLORATION TECHNOLOGIES CORP.. NATIONAL SECURITY SPACE LAUNCH PHASE 2 LAUNCH SERVICES
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 $41.9 million.
What is the period of performance?
Start: 2021-08-19. End: 2022-08-18.
What is the track record of Space Exploration Technologies Corp. (SpaceX) in fulfilling government launch contracts, particularly within the NSSL program?
SpaceX has a significant and growing track record with government launch contracts, including within the National Security Space Launch (NSSL) program. They have successfully executed numerous launches for NASA, the Department of Defense, and other government agencies. Within the NSSL framework, SpaceX has become a key provider, demonstrating capability in delivering payloads to orbit reliably. Their performance has often been characterized by innovation and cost-effectiveness compared to traditional providers. However, like any complex operation, there have been instances of launch delays or anomalies, which are inherent risks in spaceflight. The specific performance metrics for this $41.8 million contract would be detailed in internal government performance reports, assessing mission success, timeliness, and adherence to requirements.
How does the $41.8 million value of this contract compare to other similar NSSL launch service awards?
The $41.8 million value for this specific delivery order under the NSSL program provides a data point for comparison. However, NSSL contracts are complex and can vary significantly based on the payload's mass, destination orbit, launch vehicle requirements, and associated mission assurance activities. Early NSSL contracts often saw higher price points. SpaceX's entry and subsequent success have generally introduced more competitive pricing dynamics. To accurately benchmark this $41.8 million award, one would need to compare it against other NSSL awards for similar mission profiles and launch vehicles, considering factors like the specific launch provider, the complexity of the payload integration, and the required launch window. Without direct comparison data for identical missions, it's challenging to definitively state if this represents a premium or a discount, but it falls within the expected range for a single national security space launch.
What are the primary risks associated with this contract, and how are they being mitigated?
The primary risks associated with this contract include launch failure, schedule delays, and potential cost overruns (though mitigated by the firm fixed-price structure). Launch failures, while rare, can result in the loss of valuable national security payloads and significant financial investment. Schedule delays can arise from technical issues, supply chain disruptions, range availability, or weather. Mitigation strategies employed by the government and SpaceX typically involve rigorous testing, robust mission assurance protocols, redundancy in critical systems, detailed launch planning, and contingency planning. The firm fixed-price nature of the contract incentivizes SpaceX to manage costs effectively. Furthermore, the government's oversight and regular communication with the contractor help identify and address potential issues proactively.
How effective is the firm fixed-price (FFP) contract type in ensuring value for money for this national security launch service?
The Firm Fixed Price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work is well-defined and risks are understood. For a service like space launch, where the objective is to deliver a payload to a specific orbit, FFP provides cost certainty to the government. It places the risk of cost overruns on the contractor (SpaceX in this case), incentivizing them to manage their resources efficiently and control costs. This structure helps prevent unexpected budget increases for the government. However, for highly complex or R&D-intensive services where scope may evolve, FFP can sometimes lead to contractors being less willing to incorporate changes or innovations if they impact cost. For established launch services, FFP is a suitable mechanism for achieving predictable spending and driving contractor efficiency.
What is the historical spending trend for national security space launch services, and how does this contract fit within that trend?
Historical spending on national security space launch services has been substantial, driven by the critical need for reliable access to space for defense and intelligence missions. For decades, this market was dominated by a few providers, often resulting in high costs. The introduction of new providers like SpaceX, coupled with government initiatives like the NSSL program aiming for increased competition and cost reduction, has begun to reshape the spending landscape. This $41.8 million contract represents a single delivery order within a larger program. While specific historical spending figures for this exact type of service are extensive, the trend has been towards leveraging competitive procurements to achieve better value. This award, being under full and open competition, aligns with the government's strategy to manage and potentially reduce overall spending on space launch by fostering a more dynamic market.
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: $41,869,305
Exercised Options: $41,869,305
Current Obligation: $41,869,305
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: 2021-08-19
Current End Date: 2022-08-18
Potential End Date: 2022-08-18 00:00:00
Last Modified: 2022-09-16
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