DoD Awards $881M for National Security Space Launch Services Phase 2 to SpaceX
Contract Overview
Contract Amount: $88,112,747 ($88.1M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2023-11-01
End Date: 2026-07-14
Contract Duration: 986 days
Daily Burn Rate: $89.4K/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 $88.1 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, dominant provider in the space launch sector. 2. High value indicates critical national security reliance on these launch services. 3. Potential for cost overruns or schedule delays exists given the long duration. 4. Limited competition could impact long-term price competitiveness.
Value Assessment
Rating: good
The contract value of $881M over approximately 3 years appears reasonable for complex national security space launch services. Benchmarking against similar large-scale government launch contracts is difficult due to the specialized nature of the services and the limited number of providers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the award to a single entity, SpaceX, indicates they were the most advantageous offer. The impact on price discovery is positive due to initial competition, but future pricing may be influenced by SpaceX's market position.
Taxpayer Impact: Taxpayer funds are being used for critical national security infrastructure, ensuring access to space for vital defense and intelligence missions.
Public Impact
Ensures continued access to space for critical national security assets. Supports advanced technological capabilities for defense and intelligence. Contributes to the U.S. dominance in the global space sector.
Waste & Efficiency Indicators
Waste Risk Score: 85 / 10
Warning Flags
- Sole provider reliance
- Long-term contract duration
- Potential for future price increases
Positive Signals
- Awarded under full and open competition
- Supports critical national security missions
- Leverages advanced space launch technology
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on space launch services. Spending in this area is crucial for national security, with benchmarks often driven by technological advancements and the limited number of qualified providers.
Small Business Impact
The data indicates this contract was awarded to SpaceX, a large prime contractor. There is no explicit mention of small business participation in this specific award, suggesting that subcontracting opportunities may be the primary avenue for small business involvement.
Oversight & Accountability
The Department of the Air Force is the contracting agency, responsible for overseeing the execution of this contract. Robust oversight will be necessary to ensure mission success, cost control, and adherence to contract terms throughout the performance period.
Related Government Programs
- Nonscheduled Chartered Freight Air Transportation
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High contract value
- Long contract duration
- Reliance on a single provider
- Potential for schedule delays
- Limited visibility into per-unit cost
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 $88.1 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 $88.1 million.
What is the period of performance?
Start: 2023-11-01. End: 2026-07-14.
What is the projected cost per launch under this contract, and how does it compare to historical averages or competitor pricing?
The contract value is $881,127,470 with a duration of 986 days, implying an average annual spend of approximately $320 million. Without specific launch schedules or individual launch costs, a precise per-launch cost is not calculable. However, given the complexity and national security requirements, costs are expected to be substantial, likely benchmarked against previous government launch contracts and SpaceX's commercial pricing structures.
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 disruptions due to the sole provider's operational issues, supply chain problems, or unforeseen technical failures. A single point of failure could jeopardize national security missions. Furthermore, reduced competition could lead to less favorable pricing in future contract renewals or modifications, and limit the government's leverage in negotiations.
How effectively does this contract ensure the U.S. maintains a strategic advantage in space-based national security capabilities?
This contract is designed to ensure the reliable and timely launch of national security payloads, which is fundamental to maintaining a strategic advantage. By securing launch services from a capable provider like SpaceX, the U.S. can deploy and maintain critical space assets necessary for intelligence, surveillance, reconnaissance, and communication, thereby underpinning its defense posture.
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: $88,112,747
Exercised Options: $88,112,747
Current Obligation: $88,112,747
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: 2023-11-01
Current End Date: 2026-07-14
Potential End Date: 2026-07-14 00:00:00
Last Modified: 2025-09-26
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