DoD's $865M National Security Space Launch Services contract awarded to SpaceX for critical satellite deployment
Contract Overview
Contract Amount: $86,513,655 ($86.5M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2023-06-15
End Date: 2026-06-30
Contract Duration: 1,111 days
Daily Burn Rate: $77.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: NATIONAL SECURITY SPACE LAUNCH SERVICES
Place of Performance
Location: HAWTHORNE, LOS ANGELES County, CALIFORNIA, 90250
Plain-Language Summary
Department of Defense obligated $86.5 million to SPACE EXPLORATION TECHNOLOGIES CORP. for work described as: NATIONAL SECURITY SPACE LAUNCH SERVICES Key points: 1. Contract awarded to a single, highly capable provider, indicating specialized needs. 2. Fixed-price contract structure aims to control costs and incentivize performance. 3. Long duration suggests a sustained need for these launch services. 4. Focus on national security highlights the critical nature of the services. 5. Geographic concentration in California may point to launch site proximity or operational hubs.
Value Assessment
Rating: good
The contract value of $865 million over approximately three years represents a significant investment in space launch capabilities. While specific per-unit cost benchmarks for national security space launches are highly proprietary and complex, the firm-fixed-price nature of this award suggests an effort to establish predictable costs. Benchmarking against historical national security launch contracts would be necessary for a definitive value assessment, but the award to a leading provider in the field implies a competitive bid process that likely yielded a fair market price for the services rendered.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified vendors were solicited and had the opportunity to bid. The specific number of bidders is not provided, but the award to a single entity suggests that SpaceX was deemed the most advantageous offer. Full and open competition is generally expected to drive competitive pricing and ensure the government receives the best value.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it fosters a competitive environment, potentially leading to lower prices and higher quality services through the selection of the most capable and cost-effective provider.
Public Impact
National security agencies benefit from reliable and timely deployment of critical space assets. Services delivered include the launch of national security payloads into orbit. Geographic impact is primarily centered around launch facilities and mission control centers, likely in California. Workforce implications include highly skilled jobs in aerospace engineering, launch operations, and support services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in due to the specialized nature of space launch services.
- Reliance on a single provider for critical national security assets could pose a risk if performance issues arise.
Positive Signals
- Award to a proven provider with a strong track record in successful launches.
- Firm-fixed-price contract provides cost certainty for the government.
- Long-term nature of the contract indicates a stable and predictable demand for these services.
Sector Analysis
The National Security Space Launch (NSSL) program is a critical component of the U.S. defense and intelligence infrastructure, ensuring the reliable delivery of national security payloads to orbit. This sector is characterized by high barriers to entry, significant technological complexity, and substantial government investment. Spending in this area is driven by the need to maintain space superiority and protect national interests in an increasingly contested domain. The market is dominated by a few key players capable of meeting the stringent requirements for national security launches.
Small Business Impact
This contract does not appear to have a specific small business set-aside. Given the highly specialized and capital-intensive nature of national security space launch services, the primary contractors are typically large, established aerospace companies. Subcontracting opportunities may exist for smaller businesses providing components, specialized materials, or support services, but the prime contract itself is not geared towards small business participation.
Oversight & Accountability
Oversight for this contract would likely fall under the Department of Defense's contracting and program management offices, with potential involvement from the Air Force's Space Force component. Accountability measures are embedded in the firm-fixed-price contract terms, performance metrics, and delivery schedules. Transparency is generally limited for national security contracts due to the sensitive nature of the payloads and launch operations, though reporting requirements would exist.
Related Government Programs
- National Security Space Launch (NSSL)
- Space Systems Command (SSC) Contracts
- Satellite Deployment Services
- Orbital Launch Services
Risk Flags
- Critical National Security Asset
- Single Source Reliance
- High Technology Sector
- Long Duration Contract
Tags
defense, department-of-defense, air-force, space-exploration-technologies-corp, spacex, national-security-space-launch, delivery-order, firm-fixed-price, full-and-open-competition, california, aerospace, space-transportation
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $86.5 million to SPACE EXPLORATION TECHNOLOGIES CORP.. NATIONAL SECURITY SPACE 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 $86.5 million.
What is the period of performance?
Start: 2023-06-15. End: 2026-06-30.
What is SpaceX's track record with national security space launches prior to this award?
Space Exploration Technologies Corp. (SpaceX) has a well-established and successful track record with national security space launches. Prior to this specific contract, SpaceX had been a key player in the National Security Space Launch (NSSL) program, successfully launching numerous national security payloads for the Department of Defense and other government agencies. Their consistent performance, including achieving orbital insertion and mission success for various satellites, has demonstrated their capability to meet the stringent requirements of national security missions. This history of reliability and successful mission execution likely contributed significantly to their selection for this substantial contract.
How does the pricing of this contract compare to similar national security launch contracts?
Direct comparison of pricing for national security space launch contracts is challenging due to the proprietary nature of specific bid data and the unique mission requirements for each launch. However, SpaceX has historically been recognized for offering competitive pricing within the NSSL program, often attributed to their innovative launch vehicle designs and operational efficiencies. The firm-fixed-price structure of this award aims to provide cost certainty. While specific per-launch costs are not publicly detailed, the award to SpaceX suggests their bid was deemed advantageous compared to other potential providers, reflecting market dynamics and technological capabilities.
What are the primary risks associated with this contract and how are they being mitigated?
The primary risks associated with this contract include potential launch failures, schedule delays, and reliance on a single provider for critical national security assets. Launch failures, though infrequent, can result in the loss of expensive payloads and significant program setbacks. Schedule delays can impact the deployment of essential space capabilities. Mitigation strategies likely include rigorous pre-launch testing, robust quality assurance processes, contingency planning, and performance incentives built into the firm-fixed-price contract. The government also maintains oversight and may have contractual clauses for addressing performance deficiencies or failures.
How effective is the current competition landscape in the national security space launch sector?
The competition landscape in the national security space launch sector has evolved significantly. Historically dominated by a few established players, it has seen the emergence of new, highly capable providers like SpaceX. While the number of companies capable of meeting the stringent requirements for national security launches remains limited due to high technical and financial barriers, the presence of multiple qualified bidders in recent NSSL procurements has fostered increased competition. This competition is crucial for driving innovation, improving reliability, and ensuring cost-effectiveness for taxpayer-funded missions.
What is the historical spending trend for national security space launch services by the Department of Defense?
Historical spending on national security space launch services by the Department of Defense has been substantial, reflecting the critical importance of space-based assets for intelligence, surveillance, reconnaissance, and communication. Over the past decade, spending has fluctuated based on program needs, technological advancements, and the introduction of new launch providers. The NSSL program, in particular, represents a significant and ongoing investment. The trend has been towards ensuring assured access to space through a mix of providers, with increasing emphasis on cost efficiency and launch cadence, driven partly by the success and competitive pricing offered by newer entrants.
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: $86,818,655
Exercised Options: $86,818,655
Current Obligation: $86,513,655
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: 2023-06-15
Current End Date: 2026-06-30
Potential End Date: 2026-08-30 00:00:00
Last Modified: 2026-01-15
More Contracts from Space Exploration Technologies Corp.
- THE Commercial Crew Program (CCP) Commercial Crew Transportation Capability (cctcap) Contract Will Provide Completion of the Design, Development, Test, Evaluation, and Certification of an Integrated Crew Transportation System (CTS) Capable of Transporting Nasa Crew to and From the ISS, in Accordance With the Design Reference Missions and Nasa's Certification Standards and Requirements. Certification of the CTS Will BE Determined by Nasa. Nasa Plans to Issue Task Orders for Post Certification Missions (PCM) to and From ISS That Include Ground, Launch, Lifeboat, On-Orbit, Return and Recovery Operations. the Minimum Quantity of Missions to BE Ordered IS TWO (2) and the Maximum Potential Quantity of Missions Which MAY BE Ordered IS SIX (6). in Addition, Nasa MAY Issue Task Orders for Special Studies Used for Risk Reduction and Other Purposes Related to the CTS. Nasa Certification Under Clin 001 IS Complete When the Contractor's Crew Transportation System (CTS) HAS MET Nasa's Requirements for Safely Transporting Crew to and From the International Space Station (ISS) in Accordance With Documents Identified in Section C.1, Specifications/Statement of Work. Subclins 001A and 001B, Identified in Table B.3,Ddte/Certification Subclins, ARE Delivery Milestones That Represent Completion of Required Work Necessary to Achieve Nasa Certification. Delivery Payment for the ISS Design Certification Review (DCR) for the Crewed Flight to the ISS Includes ALL Work Under This Clin That Occurs From the Contract Effective Date Through the ISS DCR Completion. the Delivery Payment for the Certification Review (CR) Will Include ALL Work That Occurs From the ISS DCR Delivery Date Through the END of the Ddte/Certification Clin 001. in Accordance With Clause C.1, Specification/Statement of Work, the Task Ordering Procedures and Other Terms and Conditions in the Contract, the Contracting Officer MAY Issue Post Certification Mission (PCM) Task Orders. the Contractor Shall USE the Mission Pricing Rates Shown in Table B.4.1, Post Certification Mission Prices. the PER Mission Prices ARE for a Single Order AT the Price Stated PER the Calendar Year (CY) Based on the Number of Missions Ordered. CTS Full Mission Capability Prices Shall BE Based on (1) Fulfillment of the Design Reference Mission to the ISS Found in Cct-Drm-1110, Crew Transportation System Design Reference Missions, Attachment J-03, Contract Performance Work Statement, and Other Terms and Conditions in the Contract and (2) ALL Inherent CTS Capabilities That ARE Within the Proposed Mission Prices. in Accordance With Attachment J-03, Contract Performance Work Statement, the Task Ordering Procedures and Other Terms and Conditions in the Contract, the Contractor Shall Perform Special Studies, Test and Analyses, AS Initiated by Written Direction From the Contracting Officer. Spacex Cctcap Post Certification Missions 3-6(PCM-3-6) Task Order Against Nnk14ma74c Clin 002, AS Described in Clause B.4 Post Certification Missions (idiq)(clin 002) and ALL Other Applicable Terms and Conditions — $3.0B (National Aeronautics and Space Administration)
- Work Required for the Design, Development, Manufacture, Test, Launch, Demonstration, and Engineering Support of the Human Landing System (HLS) Integrated Lander — $3.0B (National Aeronautics and Space Administration)
- Design, Develop, Manufacture, Test, Integrate, Achieve Nasa Acceptance, Deliver, and Sustain ITS United States Deorbit Vehicle (usdv) Such That the Usdv CAN Perform the Final Deorbit of the International Space Station (ISS) — $425.6M (National Aeronautics and Space Administration)
- Evolved Expendable Launch Vehicle 1A-6 Launch Services — $313.8M (Department of Defense)
- National Security Space Launch Phase 3 Lane 1 — $307.7M (Department of Defense)
View all Space Exploration Technologies Corp. federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)