DoD awards $74.4M for National Security Space Launch Phase 2, with SpaceX as sole awardee
Contract Overview
Contract Amount: $74,387,820 ($74.4M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2022-08-19
End Date: 2023-08-18
Contract Duration: 364 days
Daily Burn Rate: $204.4K/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 $74.4 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 award to SpaceX highlights the evolving landscape of space launch providers for government services. 3. The firm-fixed-price structure aims to provide cost certainty for the Department of Defense. 4. The duration of the contract suggests a need for sustained launch services over a defined period. 5. The absence of small business set-asides indicates a focus on specialized, large-scale launch capabilities. 6. The contract's value, while substantial, needs to be benchmarked against the cost of similar complex launch missions.
Value Assessment
Rating: good
The contract value of $74.4 million for a one-year period for launch services appears reasonable given the specialized nature of national security space missions. Benchmarking against historical National Security Space Launch (NSSL) contracts, which often involve multi-year, multi-billion dollar agreements for multiple launches, this specific delivery order represents a segment of a larger program. Without detailed cost breakdowns, a precise value-for-money assessment is challenging, but the firm-fixed-price type suggests the government has negotiated a set price for the services, mitigating cost overrun risks.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. However, the data specifies this as a 'DELIVERY ORDER' under a larger program (likely NSSL Phase 2), and the awardee is listed as SPACE EXPLORATION TECHNOLOGIES CORP. (SpaceX). It's crucial to understand if this specific delivery order was competed among multiple NSSL Phase 2 awardees or if it represents a direct award to SpaceX within the broader framework. The number of bidders for this specific delivery order is not explicitly stated, but the 'full and open' designation suggests a competitive process was intended.
Taxpayer Impact: A full and open competition, even for a delivery order, is generally favorable for taxpayers as it encourages competitive pricing and potentially drives down costs through market forces. This process helps ensure that the government is obtaining services at a fair market value.
Public Impact
The primary beneficiaries are the agencies within the Department of Defense requiring secure and reliable access to space for national security missions. The services delivered include launch operations for satellites and other payloads critical for intelligence, surveillance, reconnaissance, and communication. The geographic impact is primarily centered around launch facilities, likely in the United States, and the orbital destinations of the launched payloads. Workforce implications include highly skilled personnel in aerospace engineering, launch operations, and mission control, supporting the contractor's operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Dependence on a single contractor for a critical delivery order could pose a risk if unforeseen issues arise with the contractor's operations.
- The specific nature of national security payloads requires stringent security protocols, and any lapse could have significant implications.
- The long-term sustainability and evolution of launch capabilities are crucial; reliance on current providers needs continuous assessment.
Positive Signals
- SpaceX has a demonstrated track record of successful launches, indicating a high level of operational reliability.
- The firm-fixed-price contract structure provides cost predictability for this specific service.
- The award contributes to the operational readiness of national security space assets.
Sector Analysis
This contract falls within the Aerospace and Defense sector, specifically focusing on launch services. The National Security Space Launch (NSSL) program is a critical government initiative to ensure continued U.S. access to space for national security missions. The market for space launch services is increasingly competitive, with established players and new entrants vying for government and commercial contracts. Spending in this area is driven by the need to deploy and maintain vital space-based assets for defense, intelligence, and scientific purposes. Comparable spending benchmarks would involve analyzing the cost per launch for similar payloads across different providers and contract types within the NSSL program and potentially commercial launch markets.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This is typical for large-scale, complex launch services where specialized capabilities and significant infrastructure are required, often possessed by larger, established aerospace companies. Subcontracting opportunities for small businesses may exist within the broader NSSL program or through SpaceX's supply chain, but this specific delivery order does not appear to be directly targeted at small business prime contractors. The impact on the small business ecosystem is indirect, relying on their ability to compete for subcontracts.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force, which manages the NSSL program for the DoD. Accountability measures are embedded in the contract terms, including performance requirements and delivery schedules. Transparency is facilitated through contract awards databases and reporting requirements. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.
Related Government Programs
- National Security Space Launch (NSSL) Program
- Space Launch Services
- Satellite Deployment
- Aerospace and Defense Contracting
- Department of Defense Procurement
Risk Flags
- Potential for schedule delays impacting national security operations.
- Risk of launch failure, though mitigated by contractor's track record.
- Dependence on a single provider for specific mission requirements.
- Need for continuous monitoring of technological advancements and market dynamics.
Tags
defense, space-launch-services, national-security, department-of-defense, air-force, california, firm-fixed-price, full-and-open-competition, delivery-order, space-exploration-technologies-corp, aerospace, satellite-deployment
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $74.4 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 $74.4 million.
What is the period of performance?
Start: 2022-08-19. End: 2023-08-18.
What is SpaceX's track record with National Security Space Launch missions prior to this award?
SpaceX has a significant and growing track record with the National Security Space Launch (NSSL) program. Prior to this specific delivery order in August 2022, SpaceX had successfully executed multiple NSSL missions, demonstrating its capability to meet the stringent requirements for launching national security payloads. These missions have included deploying critical assets for intelligence, defense, and other government agencies. The company's consistent performance and reliability in launching these high-value payloads have been key factors in its selection as a primary provider within the NSSL framework, alongside other established contractors. Their success has contributed to increased competition and innovation within the space launch sector.
How does the cost of this delivery order compare to other NSSL Phase 2 launch services?
Directly comparing the cost of this single $74.4 million delivery order to other NSSL Phase 2 services requires careful consideration, as NSSL contracts are typically structured as indefinite-delivery/indefinite-quantity (IDIQ) agreements covering multiple launches over several years, often with total values in the billions. This $74.4 million likely represents the cost for a specific launch or a set of services within a broader mission. Benchmarking would involve looking at the cost per launch for similar payload classes and mission complexities across different providers within the NSSL program. While specific per-launch costs are often sensitive, SpaceX has generally been perceived as a competitive force, potentially driving down costs through its innovative approach and reusable rocket technology. However, the 'value' is not solely cost-based but also includes reliability, schedule assurance, and mission success.
What are the primary risks associated with relying on SpaceX for this national security launch?
The primary risks associated with relying on SpaceX for this national security launch include potential launch failures, although SpaceX has a strong track record. Another risk is schedule delays, which can occur due to technical issues, weather, or range availability. Dependence on a single provider for a critical mission segment could also pose a risk if unforeseen operational or business challenges arise for SpaceX. Furthermore, the evolving geopolitical landscape and potential supply chain disruptions could impact launch operations. The government mitigates these risks through robust contract oversight, performance requirements, and maintaining multiple launch providers within the broader NSSL program to ensure redundancy and competition.
What is the expected program effectiveness and impact of these launch services?
The expected program effectiveness and impact of these launch services are directly tied to the successful deployment of national security payloads into orbit. These payloads are critical for a wide range of functions, including intelligence gathering, missile warning, secure communications, navigation, and space domain awareness. Effective launch services ensure that these vital assets are placed on orbit reliably and on schedule, thereby maintaining and enhancing the United States' strategic advantage and operational capabilities. The impact is far-reaching, supporting military readiness, diplomatic efforts, and national security decision-making by providing essential space-based information and services.
How has historical spending on space launch services evolved, and how does this contract fit?
Historical spending on space launch services by the U.S. government has evolved significantly, moving from a reliance on government-owned launch vehicles and facilities to a more diversified approach involving commercial partnerships. Early spending was dominated by large, government-led programs. In recent decades, the focus has shifted towards leveraging commercial capabilities, exemplified by the NSSL program, which aims to ensure access to space through competition among multiple providers. This $74.4 million delivery order fits within this modern paradigm, representing a specific procurement action under a larger, competitively awarded NSSL contract. It reflects the government's strategy to utilize commercial launch services for national security missions, balancing cost, capability, and assured access to space.
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: $74,387,823
Exercised Options: $74,387,823
Current Obligation: $74,387,820
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: 2022-08-19
Current End Date: 2023-08-18
Potential End Date: 2023-08-18 00:00:00
Last Modified: 2023-09-29
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