DoD's $30.3M Rocket Motor Tech Services contract awarded to ATK Launch Systems LLC for propulsion unit manufacturing

Contract Overview

Contract Amount: $30,315,734 ($30.3M)

Contractor: ATK Launch Systems LLC

Awarding Agency: Department of Defense

Start Date: 2011-09-30

End Date: 2017-03-28

Contract Duration: 2,006 days

Daily Burn Rate: $15.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ROCKET MOTOR TECH SERVICES TC

Place of Performance

Location: MAGNA, SALT LAKE County, UTAH, 84044

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to ATK LAUNCH SYSTEMS LLC for work described as: ROCKET MOTOR TECH SERVICES TC Key points: 1. Contract awarded to a single, established supplier, raising questions about price competitiveness. 2. The contract's duration and cost-plus structure may incentivize higher spending. 3. Lack of competition suggests potential for missed savings and limited market innovation. 4. Performance context is tied to critical missile defense systems, implying high stakes. 5. Sector positioning within guided missile propulsion highlights a specialized, high-value niche. 6. The contract's value, while significant, needs benchmarking against similar propulsion development efforts.

Value Assessment

Rating: fair

The total value of $30.3 million over approximately six years for rocket motor technology services appears substantial. Without direct comparable contracts for similar niche propulsion systems, a precise value-for-money assessment is challenging. However, the cost-plus-fixed-fee structure, while common for R&D, can lead to cost overruns if not tightly managed. Benchmarking against industry standards for similar development and manufacturing efforts would be necessary to determine if the pricing was competitive, especially given the lack of competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning ATK Launch Systems LLC was the only vendor considered. This approach is typically used when only one source possesses the necessary specialized capabilities, proprietary technology, or when urgency precludes a competitive process. The lack of competition means there was no direct price negotiation against other market participants, potentially leading to a higher price than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government did not benefit from the price discovery mechanism inherent in a competitive bidding process.

Public Impact

The primary beneficiaries are the Department of Defense and its missile defense programs, ensuring the availability of critical propulsion technology. Services delivered include the development and manufacturing of rocket motor technology essential for guided missile systems. The geographic impact is primarily in Utah, where ATK Launch Systems LLC is located, potentially supporting local jobs and the regional aerospace industry. Workforce implications include the employment of specialized engineers, technicians, and manufacturing personnel within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 40 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Cost-plus contract type can lead to cost escalation if not rigorously overseen.
Limited public information on specific performance metrics and outcomes.
Long contract duration without clear break clauses could lock in costs.

Positive Signals

Award to an established contractor with presumed expertise in a critical technology area.
Contract supports vital national security interests in missile defense.
Potential for technological advancement in a specialized field.

Sector Analysis

The contract falls within the aerospace and defense sector, specifically focusing on missile propulsion systems. This is a highly specialized and capital-intensive area dominated by a few large contractors. The market size for such niche components is difficult to quantify but is directly tied to government defense spending priorities. Comparable spending benchmarks would likely involve other major defense contractors involved in strategic missile development and manufacturing.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, ATK Launch Systems LLC, is a large entity. There is no explicit information regarding subcontracting plans with small businesses. This suggests that the primary focus was on securing the specialized technology from the prime, potentially limiting opportunities for small businesses in this specific contract's supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Given the sole-source nature and cost-plus structure, rigorous oversight of expenditures, progress, and adherence to technical specifications would be crucial. Transparency is limited by the nature of defense contracts, but reporting requirements would exist. The Inspector General's office would have jurisdiction to investigate fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems Procurement
Strategic Weapons Development
Aerospace Propulsion Manufacturing
Guided Missile Components
Defense Research and Development

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to ATK LAUNCH SYSTEMS LLC. ROCKET MOTOR TECH SERVICES TC

Who is the contractor on this award?

The obligated recipient is ATK LAUNCH SYSTEMS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $30.3 million.

What is the period of performance?

Start: 2011-09-30. End: 2017-03-28.

What is ATK Launch Systems LLC's track record with similar sole-source defense contracts?

ATK Launch Systems LLC, now part of Northrop Grumman, has a long history of sole-source and competitively awarded contracts with the Department of Defense and NASA for rocket propulsion systems. Their track record includes significant work on solid rocket boosters for space launch vehicles and various missile programs. While specific details on past sole-source awards for similar technologies are often classified or proprietary, the company is recognized as a key provider in this niche. Assessing their performance on previous contracts would involve reviewing contract close-out reports, past performance evaluations, and any publicly available data on program successes or failures related to propulsion systems. Given their established position, the government likely relied on historical performance data when justifying the sole-source award, assuming satisfactory past performance.

How does the cost-plus-fixed-fee structure compare to other contract types for this kind of R&D?

The Cost-Plus-Fixed-Fee (CPFF) contract type is common for research and development efforts where the scope of work is not fully defined at the outset, or where innovation is a primary goal. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. However, it differs from fixed-price contracts where the contractor bears more risk and potential reward based on cost efficiency. Compared to other cost-reimbursement types like Cost-Plus-Incentive-Fee (CPIF), CPFF offers less direct incentive for cost reduction beyond avoiding disallowed costs. For R&D, it balances the government's need for flexibility with the contractor's need for cost recovery and a defined profit margin.

What are the primary risks associated with a sole-source award for critical propulsion technology?

The primary risks associated with a sole-source award for critical propulsion technology include a lack of competitive pricing, potentially leading to higher costs for the government and taxpayers. Without competition, there is reduced incentive for the contractor to innovate aggressively or optimize efficiency beyond what is contractually required. Furthermore, reliance on a single supplier creates supply chain vulnerability; any disruption at the contractor's facility could significantly impact defense readiness. There's also a risk of vendor lock-in, making it difficult and costly to switch to alternative suppliers or technologies in the future. Finally, the absence of a competitive process can obscure potential inefficiencies or suboptimal technical solutions that might have been identified and addressed by competing firms.

What is the historical spending pattern for rocket motor technology services by the Department of Defense?

Historical spending patterns for rocket motor technology services by the Department of Defense are substantial and fluctuate based on strategic priorities, program lifecycles, and geopolitical factors. The DoD consistently invests in advanced propulsion systems for a wide array of platforms, including strategic missiles, tactical munitions, and space launch capabilities. Spending in this area is often concentrated among a few key prime contractors who possess the specialized expertise and facilities. While specific aggregate figures for 'rocket motor technology services' are not readily available in public databases, broader categories like 'missiles and related weapon systems' or 'aircraft and missile components' show billions of dollars in annual obligations. This particular $30.3 million contract represents a segment of that larger, ongoing investment in maintaining and advancing U.S. missile capabilities.

How does the geographic location of the contractor (Utah) impact the contract's execution and oversight?

The geographic location of ATK Launch Systems LLC in Utah has several implications for contract execution and oversight. Utah has a significant aerospace and defense industrial base, potentially providing access to a skilled workforce and established supply chains relevant to rocket motor manufacturing. For oversight, the distance from major DoD contracting hubs might necessitate more reliance on remote monitoring tools, periodic on-site inspections, and potentially local DoD representatives or Defense Contract Management Agency (DCMA) field offices. Travel costs for government personnel to visit the site could be a factor. However, the presence of established defense contractors in the region often means that oversight infrastructure, such as DCMA presence, is already in place, mitigating potential challenges.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ014710R0029

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 5000 S 8400 W, MAGNA, UT, 84044

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: $45,538,969

Exercised Options: $45,291,484

Current Obligation: $30,315,734

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline