DoD's $160M National Security Space Launch Services contract awarded to SpaceX, highlighting significant investment in space capabilities
Contract Overview
Contract Amount: $159,541,543 ($159.5M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2023-08-19
End Date: 2024-08-18
Contract Duration: 365 days
Daily Burn Rate: $437.1K/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 $159.5 million to SPACE EXPLORATION TECHNOLOGIES CORP. for work described as: NATIONAL SECURITY SPACE LAUNCH SERVICES Key points: 1. Significant contract value indicates critical national security reliance on space-based assets. 2. SpaceX's role suggests a competitive landscape for advanced space launch services. 3. Potential risks include reliance on a single provider for critical launches and evolving technological demands. 4. The IT and Defense sectors are heavily involved, reflecting the strategic importance of space.
Value Assessment
Rating: good
The contract value of $159.5M for one year appears reasonable given the specialized nature of national security space launch services. Benchmarking against similar large-scale launch contracts is difficult due to unique mission requirements and classified payloads.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. However, the specific award type (delivery order) implies it's part of a larger framework, and the actual competition for this specific order needs further context.
Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by fostering a competitive environment for essential national security services.
Public Impact
Ensures continued access to space for critical national security missions. Supports advanced technological development in the aerospace and defense sectors. Contributes to the U.S. government's ability to maintain strategic advantages through space-based assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if competition is limited in subsequent phases.
- Geopolitical risks associated with reliance on space infrastructure.
- Technological obsolescence in a rapidly evolving field.
Positive Signals
- Awarded through full and open competition.
- Supports critical national security objectives.
- Leverages advanced commercial space capabilities.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on advanced IT and aerospace capabilities for national security. Spending benchmarks for space launch services are highly variable due to mission complexity and technological advancements.
Small Business Impact
While this specific contract appears to be with a large prime contractor, the broader space launch ecosystem often involves numerous small businesses as subcontractors for specialized components and services. Further analysis would be needed to determine direct small business participation.
Oversight & Accountability
The Department of the Air Force is the contracting agency, indicating established oversight mechanisms. However, the nature of national security contracts may limit public transparency regarding specific oversight activities and performance metrics.
Related Government Programs
- Nonscheduled Chartered Freight Air Transportation
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Reliance on a single provider for critical national security assets.
- Potential for cost overruns if scope changes or unforeseen technical issues arise.
- Vulnerability to geopolitical events impacting launch operations or supply chains.
- Pace of technological advancement may outstrip current contract capabilities.
- Ensuring continued competition in future phases of space launch services.
Tags
nonscheduled-chartered-freight-air-trans, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $159.5 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 $159.5 million.
What is the period of performance?
Start: 2023-08-19. End: 2024-08-18.
What is the projected cost-effectiveness of these launch services over the contract's duration, considering potential future needs and technological advancements?
Assessing long-term cost-effectiveness requires analyzing the contract's pricing structure against projected launch cadence and the potential for technology refresh. The firm fixed-price nature provides cost certainty for the current period, but future investments in upgraded launch vehicles or alternative capabilities could impact overall value. Benchmarking against evolving commercial launch market prices will be crucial.
What are the primary risks associated with relying on a single provider for critical national security space launch services, and what mitigation strategies are in place?
The primary risks include supply chain disruptions, potential single-point-of-failure scenarios, and reduced negotiating leverage for future contracts. Mitigation strategies likely involve maintaining robust government oversight, fostering alternative launch capabilities within the broader defense industrial base, and ensuring comprehensive contingency planning for launch failures or delays.
How effectively does this contract support the U.S. government's strategic goals for maintaining space superiority and ensuring mission assurance?
This contract directly supports strategic goals by securing essential launch capabilities for national security payloads. Its effectiveness hinges on reliable execution by the contractor, timely delivery of services, and the ability of these launches to place critical assets into desired orbits, thereby maintaining operational readiness and strategic advantage.
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: $159,541,543
Exercised Options: $159,541,543
Current Obligation: $159,541,543
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: 2023-08-19
Current End Date: 2024-08-18
Potential End Date: 2024-08-18 00:00:00
Last Modified: 2024-02-08
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