DoD Awards $894M for National Security Space Launch Services to SpaceX
Contract Overview
Contract Amount: $89,432,747 ($89.4M)
Contractor: Space Exploration Technologies Corp.
Awarding Agency: Department of Defense
Start Date: 2023-11-02
End Date: 2026-06-02
Contract Duration: 943 days
Daily Burn Rate: $94.8K/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 $89.4 million to SPACE EXPLORATION TECHNOLOGIES CORP. for work described as: NATIONAL SECURITY SPACE LAUNCH SERVICES Key points: 1. Significant contract awarded to a single, dominant provider in a critical sector. 2. High value suggests substantial demand for advanced space launch capabilities. 3. Potential for price escalation given the long-term nature and specialized service. 4. Limited small business participation is noted, typical for this high-tech sector.
Value Assessment
Rating: good
The contract value of $894M over approximately 2.5 years appears reasonable given the specialized nature of national security space launch services. Benchmarking against similar large-scale, high-security launch contracts is challenging due to limited public data, but the firm fixed-price structure provides cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bids were considered. This method is expected to drive competitive pricing, although the specific provider (SpaceX) suggests they were the most advantageous offer.
Taxpayer Impact: The firm fixed-price nature of this contract provides predictability for taxpayer spending on essential national security space launch capabilities.
Public Impact
Ensures continued access to space for critical national security missions. Supports advanced technological development in the space sector. Contributes to the U.S. government's strategic advantage in space. Potential for job creation within the aerospace industry.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Dependence on a single provider for critical national security assets.
- Potential for cost overruns if unforeseen technical challenges arise.
- Limited visibility into the full cost breakdown of launch services.
Positive Signals
- Awarded through full and open competition.
- Firm fixed-price contract offers cost certainty.
- Supports a key strategic capability for national security.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on space launch services vital for national security. Spending benchmarks in this area are highly variable, influenced by technological advancements, geopolitical factors, and the specific mission requirements.
Small Business Impact
The data indicates that small businesses were not directly awarded this contract, which is common for large-scale, high-technology defense procurements. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this award.
Oversight & Accountability
The Department of the Air Force, under the Department of Defense, is responsible for overseeing this contract. Robust oversight mechanisms are crucial to ensure mission success, cost control, and adherence to security protocols.
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.
- Critical national security function.
- Sole primary provider for this award.
- Limited small business participation.
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 $89.4 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 $89.4 million.
What is the period of performance?
Start: 2023-11-02. End: 2026-06-02.
What is the projected cost per launch under this contract, and how does it compare to historical or alternative launch providers?
The contract value is $894,327,470 over a period of approximately 943 days. Without specific details on the number of launches or the payload mass for each, calculating a precise per-launch cost is not feasible. However, this figure represents a significant investment, and comparisons would require access to detailed mission manifests and pricing structures of other launch providers, including government and commercial entities.
What are the specific national security risks associated with relying on a single provider for space launch services, and what mitigation strategies are in place?
Reliance on a single provider, SpaceX in this case, poses risks such as service disruption due to technical failures, supply chain issues, or geopolitical events affecting the provider. Mitigation strategies likely include contingency planning, maintaining relationships with alternative providers for future needs, and robust government oversight to ensure the provider meets stringent security and performance requirements.
How effectively does this contract ensure the U.S. maintains its strategic advantage in space, considering the evolving global space landscape?
This contract directly supports the U.S. strategic advantage by ensuring reliable access to space for critical national security assets and missions. By securing launch services from a leading provider like SpaceX, the Department of Defense can maintain its operational capabilities and technological edge in an increasingly contested space environment.
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: $89,432,747
Exercised Options: $89,432,747
Current Obligation: $89,432,747
Actual Outlays: $300,000
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: 2023-11-02
Current End Date: 2026-06-02
Potential End Date: 2026-06-02 00:00:00
Last Modified: 2025-12-18
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