DoD Awards $82.4M for National Security Space Launch Services Phase 2 to SpaceX
Contract Overview
Contract Amount: $82,442,461 ($82.4M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2023-11-07
End Date: 2026-03-29
Contract Duration: 873 days
Daily Burn Rate: $94.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: NATIONAL SECURITY SPACE LAUNCH SERVICES PHASE 2
Place of Performance
Location: HAWTHORNE, LOS ANGELES County, CALIFORNIA, 90250
Plain-Language Summary
Department of Defense obligated $82.4 million to SPACE EXPLORATION TECHNOLOGIES CORP. for work described as: NATIONAL SECURITY SPACE LAUNCH SERVICES PHASE 2 Key points: 1. Significant contract awarded to a single, established provider in the space launch sector. 2. Focus on national security space missions highlights critical infrastructure and strategic importance. 3. Firm Fixed Price contract aims to control costs for long-term launch services. 4. Potential for future growth and follow-on contracts within this critical domain.
Value Assessment
Rating: good
The contract value of $82.4M for space launch services appears reasonable given the specialized nature and high costs associated with national security payloads. Benchmarking against similar large-scale launch contracts is difficult due to proprietary information and unique mission requirements, but the price seems aligned with industry standards for such critical services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method is expected to foster competitive pricing and ensure the government receives the best value. The specific award mechanism, a delivery order, suggests it's part of a larger framework agreement.
Taxpayer Impact: The firm fixed price structure aims to provide cost certainty for taxpayers, protecting against cost overruns for these complex national security space launch services.
Public Impact
Ensures continued access to space for critical national security missions. Supports advanced technological capabilities for defense and intelligence agencies. Contributes to the U.S. dominance in the strategic space domain. Potential for job creation and economic activity within the aerospace sector.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Dependence on a single provider for critical launch services.
- Potential for cost escalation if unforeseen technical challenges arise.
- Geopolitical risks impacting supply chain or launch operations.
Positive Signals
- Awarded through full and open competition.
- Firm Fixed Price contract provides cost predictability.
- Supports critical national security objectives.
- Leverages established provider with proven launch capabilities.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on space launch services vital for national security. Spending in this area is characterized by high R&D costs, stringent performance requirements, and significant government investment due to its strategic importance.
Small Business Impact
While the primary awardee is a large corporation, the contract may indirectly benefit small businesses through subcontracting opportunities. However, the data does not explicitly indicate any direct set-aside or participation goals for small businesses in this specific award.
Oversight & Accountability
The Department of the Air Force, under the DoD, is responsible for overseeing this contract. Robust oversight will be crucial to ensure mission success, adherence to schedule, and cost control, especially given the high stakes of national security space launches.
Related Government Programs
- Nonscheduled Chartered Freight Air Transportation
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High reliance on a single contractor.
- Potential for schedule delays impacting national security.
- Complexity of space launch operations introduces inherent risks.
- Limited visibility into detailed cost breakdowns.
- Geopolitical factors could impact service delivery.
Tags
nonscheduled-chartered-freight-air-trans, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $82.4 million to SPACE EXPLORATION TECHNOLOGIES CORP.. NATIONAL SECURITY SPACE LAUNCH SERVICES PHASE 2
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 $82.4 million.
What is the period of performance?
Start: 2023-11-07. End: 2026-03-29.
What is the projected cost per launch under this contract, and how does it compare to historical or alternative launch options?
The total contract value is $82.4 million over approximately 873 days. Without specific launch schedules or per-launch cost breakdowns, calculating a precise per-launch cost is not possible. However, this figure represents the total funding allocated for services, which may include multiple launches, integration, and support. Benchmarking against historical data or alternative providers would require more granular cost information and consideration of mission-specific requirements.
What are the primary risks associated with relying on a single provider for these critical national security space launch services?
The primary risks include potential single points of failure, supply chain disruptions affecting the sole provider, and reduced leverage for the government in future negotiations. If the provider experiences technical issues, delays, or financial instability, it could significantly jeopardize national security space mission timelines and capabilities. Contingency planning and robust contract management are essential to mitigate these risks.
How effectively does this contract structure ensure the long-term technological advancement and readiness of U.S. national security space capabilities?
The firm fixed price structure incentivizes the contractor to deliver services efficiently within the agreed budget. However, it may not directly incentivize significant innovation or investment in next-generation technologies unless explicitly built into the contract's scope or performance metrics. Long-term readiness will depend on ongoing investment in space technology and potential future contracts that foster innovation.
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: $82,442,461
Exercised Options: $82,442,461
Current Obligation: $82,442,461
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: 2023-11-07
Current End Date: 2026-03-29
Potential End Date: 2026-03-29 00:00:00
Last Modified: 2025-02-05
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