DoD Spends $1.34B on Boeing Launch Services, Awarded Sole-Source
Contract Overview
Contract Amount: $1,339,145,594 ($1.3B)
Contractor: United Launch Services, LLC
Awarding Agency: Department of Defense
Start Date: 2006-06-01
End Date: 2010-09-30
Contract Duration: 1,582 days
Daily Burn Rate: $846.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: BUY 3 BOEING LAUNCH SERVICES
Place of Performance
Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $1.34 billion to UNITED LAUNCH SERVICES, LLC for work described as: BUY 3 BOEING LAUNCH SERVICES Key points: 1. Significant expenditure on a critical defense service. 2. Sole-source award raises questions about competition and pricing. 3. Long contract duration (2006-2010) may not reflect current market conditions. 4. High value contract in the Guided Missile and Space Vehicle Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $1.34 billion is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar launch services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this large contract likely resulted in a higher cost to taxpayers than a competitively awarded contract.
Public Impact
Taxpayers funded a significant portion of the US space launch capability. Reliance on a single provider for critical launch services could pose national security risks. The long duration of the contract suggests a sustained need for these services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Essential defense service
- Established provider
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, which is crucial for national defense and space exploration. Spending benchmarks are difficult to establish due to the specialized nature of launch services.
Small Business Impact
The data does not indicate any involvement of small businesses in this contract, suggesting it was awarded to a large prime contractor.
Oversight & Accountability
The contract was awarded by the Department of Defense, with oversight from the Defense Contract Management Agency. Further oversight details are not provided.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated costs due to lack of bidding.
- Long contract duration may not reflect current market value.
- Dependency on a single provider for critical services.
- Lack of transparency regarding the justification for sole-source.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, co, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.34 billion to UNITED LAUNCH SERVICES, LLC. BUY 3 BOEING LAUNCH SERVICES
Who is the contractor on this award?
The obligated recipient is UNITED LAUNCH SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $1.34 billion.
What is the period of performance?
Start: 2006-06-01. End: 2010-09-30.
What was the justification for the sole-source award, and were alternatives considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's impossible to determine the exact reasons. However, the absence of competition suggests that either only one provider met the stringent requirements or a competitive process was deemed impractical or unnecessary at the time of award.
How does the per-unit cost of these launch services compare to industry benchmarks, considering the sole-source nature?
Direct comparison is challenging due to the sole-source award and the specific nature of the services. However, sole-source contracts are generally expected to be less cost-effective than competitive ones. Without access to detailed cost breakdowns and comparable market data for similar classified or specialized launch missions, a precise benchmark assessment is not feasible.
What is the long-term strategic impact of relying on a single provider for critical launch services?
Long-term reliance on a single provider can create vulnerabilities, including potential supply chain disruptions, lack of innovation due to reduced competitive pressure, and increased leverage for the provider. While it can ensure a consistent capability, it necessitates robust government oversight and contingency planning to mitigate risks associated with vendor lock-in and potential future market shifts.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA881606R0002
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: United Launch Alliance, L.L.C
Address: 9501 E PANORAMA CIR, CENTENNIAL, CO, 80112
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,733,954,210
Exercised Options: $1,733,954,210
Current Obligation: $1,339,145,594
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-06-01
Current End Date: 2010-09-30
Potential End Date: 2010-09-30 00:00:00
Last Modified: 2025-09-22
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