DoD awards $91.7M for National Security Space Launch Phase 2, with SpaceX as sole provider
Contract Overview
Contract Amount: $91,738,793 ($91.7M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2022-05-26
End Date: 2024-06-11
Contract Duration: 747 days
Daily Burn Rate: $122.8K/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 $91.7 million to SPACE EXPLORATION TECHNOLOGIES CORP. for work described as: NATIONAL SECURITY SPACE LAUNCH PHASE 2 LAUNCH SERVICES Key points: 1. This contract represents a significant investment in critical national security space launch capabilities. 2. The sole awardee suggests a highly specialized service where competition may be limited by technical requirements. 3. Performance is tied to delivery orders, indicating a need for flexible and responsive launch services. 4. The firm-fixed-price structure aims to provide cost certainty for the government. 5. The duration of the contract suggests a long-term strategic partnership for space access. 6. The geographic location of the contractor in California may have implications for workforce and regional economic impact.
Value Assessment
Rating: good
The contract value of $91.7 million for launch services appears reasonable given the specialized nature of national security space missions. Benchmarking against similar large-scale launch contracts is challenging due to the unique requirements and limited market. However, the firm-fixed-price structure provides a degree of cost control. The value should be assessed in the context of the strategic importance and the capabilities provided by the sole awardee.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While the contract is listed as 'FULL AND OPEN COMPETITION', the data indicates a single award to Space Exploration Technologies Corp. This suggests that while the opportunity was open, only one offeror met the stringent requirements for this phase of the National Security Space Launch program. The limited number of qualified bidders for such advanced capabilities is not uncommon in the aerospace sector.
Taxpayer Impact: A full and open competition, even with a single awardee, ensures that the government explored all potential sources. This process helps validate that the selected contractor offers the best value and technical solution for taxpayer funds, preventing potential overpricing that could arise from a less competitive scenario.
Public Impact
This contract directly supports the Department of Defense's ability to launch national security payloads into space, ensuring critical communication, intelligence, and navigation capabilities. The services delivered are essential for maintaining the United States' strategic advantage in space. The primary beneficiaries are national security agencies and the personnel who rely on space-based assets. The contract's impact is primarily on the defense sector and the space industry workforce, particularly in specialized engineering and launch operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential over-reliance on a single provider for critical national security launch services.
- The high cost associated with advanced space launch technology may limit broader access for other government agencies.
- The specialized nature of the contract may not offer significant subcontracting opportunities for a diverse range of small businesses.
Positive Signals
- The contract leverages a proven provider with a track record in successful space launches.
- The firm-fixed-price agreement provides cost predictability for the government.
- The award supports the development and maintenance of advanced space launch infrastructure.
Sector Analysis
The National Security Space Launch (NSSL) program is a critical component of the U.S. space industrial base, ensuring reliable access to space for national security missions. This sector is characterized by high barriers to entry, significant R&D investment, and a limited number of highly specialized contractors. Spending in this area is essential for maintaining technological superiority and national security. The market size is substantial, driven by government demand for assured launch capabilities.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses, and the sole awardee is a large corporation. While large prime contractors often engage small businesses for subcontracting, the specialized nature of advanced space launch services might limit the scope and number of such opportunities. Further analysis would be needed to determine the extent of small business participation through subcontracting.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force, which manages the NSSL program for the DoD. Accountability measures are embedded in the firm-fixed-price contract terms and performance requirements tied to delivery orders. Transparency is generally maintained through contract awards databases and program reviews, though specific operational details may be classified due to national security sensitivities.
Related Government Programs
- National Security Space Launch (NSSL) Program
- Space Force Launch Services
- Commercial Satellite Launch Services
- Department of Defense Space Acquisition
Risk Flags
- Sole source award despite full and open competition listing
- High reliance on a single contractor for critical national security assets
- Potential for cost escalation due to limited competition in future phases
Tags
defense, space-launch, national-security, firm-fixed-price, full-and-open-competition, department-of-defense, space-exploration-technologies-corp, california, air-force, space-force, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $91.7 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 $91.7 million.
What is the period of performance?
Start: 2022-05-26. End: 2024-06-11.
What is the historical spending trend for the National Security Space Launch program under the Department of Defense?
Historical spending on the National Security Space Launch (NSSL) program has been substantial, reflecting the critical need for reliable access to space for national security payloads. The program has evolved through different phases, with significant investments made in both launch vehicle development and mission assurance. Early phases focused on establishing a robust launch capability, while subsequent phases, like NSSL Phase 2, aim to ensure continued access through competition between multiple providers. Spending has been allocated across various contracts for launch services, integration, and sustainment. Analyzing year-over-year expenditures reveals a consistent demand for these services, often in the hundreds of millions of dollars annually, underscoring the program's strategic importance and the ongoing investment required to maintain U.S. space dominance.
How does the cost per launch for Space Exploration Technologies Corp. under this contract compare to other providers in the NSSL program or similar government contracts?
Directly comparing the cost per launch for Space Exploration Technologies Corp. (SpaceX) under this specific $91.7 million contract to other providers in the NSSL program or similar government contracts is complex without detailed breakdowns of launch services included in each delivery order. The NSSL program is designed to foster competition, and different providers may offer varying capabilities, payload capacities, and mission assurance levels, influencing their pricing. SpaceX has historically been known for competitive pricing in the commercial launch market. However, NSSL contracts often include stringent national security requirements that can increase costs compared to purely commercial launches. Benchmarking would require analyzing the specific services rendered per launch, the complexity of the missions, and the associated risk mitigation measures mandated by the government for each provider.
What are the key performance indicators (KPIs) and success metrics for this National Security Space Launch contract?
Key performance indicators (KPIs) and success metrics for this National Security Space Launch Phase 2 contract are primarily centered around mission success and reliability. These would include metrics such as on-time launch performance, successful payload deployment into the designated orbits, adherence to launch windows, and overall mission completion rates. Given the national security implications, stringent requirements for vehicle readiness, safety protocols, and security clearances are also critical. The firm-fixed-price nature of the contract implies that meeting all technical and performance specifications is paramount. Failure to meet these KPIs could result in contractual penalties or impact future award considerations. The government likely monitors these metrics closely through integrated program offices and technical representatives.
What is the track record of Space Exploration Technologies Corp. in fulfilling government contracts, particularly for national security or space-related missions?
Space Exploration Technologies Corp. (SpaceX) has a well-established and generally strong track record in fulfilling government contracts, particularly for space-related missions. They have been a key partner for NASA, successfully executing numerous cargo and crew resupply missions to the International Space Station (ISS) under the Commercial Resupply Services (CRS) and Commercial Crew programs. For national security missions, SpaceX has become a significant player within the National Security Space Launch (NSSL) program, having successfully launched numerous national security payloads for the U.S. Air Force and Space Force. Their performance has been characterized by increasing reliability and a growing capability to meet the demanding requirements of these sensitive missions, often at competitive price points. While occasional delays or technical challenges can occur in complex space operations, their overall performance history demonstrates a capacity to deliver critical space launch services.
What are the potential risks associated with having a single awardee for such a critical national security program?
The primary risk associated with a single awardee for a critical national security program like the National Security Space Launch (NSSL) is the potential for reduced competition driving up future costs or stifling innovation. A sole provider may have significant leverage in future negotiations, potentially leading to higher prices for the government. Furthermore, reliance on a single entity creates a vulnerability; any disruption to that contractor's operations, whether due to technical failures, financial instability, or geopolitical factors, could severely impact national security launch capabilities. This lack of redundancy also means that if the sole provider encounters insurmountable technical challenges, the government may have limited alternative options for fulfilling its launch requirements in the short to medium term.
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: $91,738,793
Exercised Options: $91,738,793
Current Obligation: $91,738,793
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: 2022-05-26
Current End Date: 2024-06-11
Potential End Date: 2024-06-11 00:00:00
Last Modified: 2024-05-07
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