NASA's $248M Hamilton Sundstrand contract for propulsion systems awarded without competition

Contract Overview

Contract Amount: $247,963,522 ($248.0M)

Contractor: Hamilton Sundstrand Corporatio

Awarding Agency: National Aeronautics and Space Administration

Start Date: 1999-10-15

End Date: 2004-09-30

Contract Duration: 1,812 days

Daily Burn Rate: $136.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Place of Performance

Location: WINDSOR LOCKS, HARTFORD County, CONNECTICUT, 06096

State: Connecticut Government Spending

Plain-Language Summary

National Aeronautics and Space Administration obligated $248.0 million to HAMILTON SUNDSTRAND CORPORATIO for work described as: Key points: 1. The contract's value of $248 million over five years suggests a significant investment in critical aerospace components. 2. Awarded as a sole-source contract, it bypasses competitive bidding, raising questions about potential cost efficiencies. 3. The cost-plus-incentive-fee structure aims to align contractor performance with NASA's objectives, but requires careful monitoring. 4. The long duration of the contract (1812 days) indicates a need for sustained support for complex propulsion systems. 5. The lack of competition may limit opportunities for innovation and cost reduction from alternative suppliers. 6. Performance context is limited without specific details on the propulsion systems and their criticality to NASA missions.

Value Assessment

Rating: questionable

Benchmarking the value of this $248 million contract is challenging due to the sole-source award and lack of detailed performance metrics. Without competitive bids, it's difficult to assess if the pricing reflects fair market value or if alternative solutions could have been procured at a lower cost. The cost-plus-incentive-fee structure, while designed to incentivize performance, can lead to cost overruns if not rigorously managed. The absence of comparable contracts awarded through full and open competition makes a direct value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of multiple bidders means that NASA did not benefit from the price discovery and innovation that typically arises from a competitive procurement process. This approach can sometimes lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium for this contract due to the absence of competitive pressure. Without competing offers, there is less assurance that the government secured the best possible price and terms.

Public Impact

The primary beneficiaries are likely NASA's space exploration and research programs that rely on the specified propulsion systems. The contract delivers essential components and services for maintaining and operating complex aerospace technology. The geographic impact is primarily centered in Connecticut, where Hamilton Sundstrand Corporation is located. Workforce implications include the employment of skilled engineers, technicians, and manufacturing personnel involved in propulsion system development and production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Cost-plus-incentive-fee contracts can lead to cost overruns if not closely managed.
Lack of transparency in the justification for sole-source award.
Long contract duration may indicate a lack of readily available alternatives.
Potential for contractor lock-in due to specialized nature of propulsion systems.

Positive Signals

Hamilton Sundstrand is a known entity in aerospace manufacturing, suggesting a level of established capability.
The incentive fee structure aims to align contractor performance with NASA's goals.
The contract supports critical national interests in space exploration.
The long duration suggests a stable, long-term need for these propulsion systems.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on propulsion systems, a critical component for space missions. The market for such specialized aerospace components is often characterized by high barriers to entry, significant R&D investment, and a limited number of qualified suppliers. NASA's spending in this area is crucial for maintaining its technological edge and achieving its ambitious exploration goals. Comparable spending benchmarks would typically involve other large-scale propulsion system contracts within NASA or other space agencies, often awarded through complex, multi-year procurements.

Small Business Impact

There is no indication that this contract included small business set-asides. As a sole-source award to a large corporation, it is unlikely to have direct subcontracting opportunities specifically mandated for small businesses, although the prime contractor may engage small businesses in its supply chain. The absence of set-asides means that small businesses did not have a direct opportunity to compete for this specific contract, potentially limiting their access to this segment of the aerospace market.

Oversight & Accountability

Oversight for this contract would primarily fall under NASA's contracting officers and program managers. The cost-plus-incentive-fee structure necessitates detailed financial and performance monitoring to ensure the contractor meets milestones and stays within projected costs. Transparency is limited due to the sole-source nature. While NASA has an Inspector General, the specific oversight mechanisms and the extent of public transparency for this particular contract are not detailed in the provided data.

Related Government Programs

NASA Propulsion Systems Contracts
Aerospace Component Procurement
Cost-Plus-Incentive-Fee Contracts
Sole-Source Defense Contracts
Space Exploration Technology Acquisition

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (CPIF)
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

National Aeronautics and Space Administration awarded $248.0 million to HAMILTON SUNDSTRAND CORPORATIO. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is HAMILTON SUNDSTRAND CORPORATIO.

Which agency awarded this contract?

Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).

What is the total obligated amount?

The obligated amount is $248.0 million.

What is the period of performance?

Start: 1999-10-15. End: 2004-09-30.

What specific propulsion systems does this contract cover, and what are their critical applications within NASA's programs?

The provided data does not specify the exact type of propulsion systems covered by this $248 million contract awarded to Hamilton Sundstrand Corporation by NASA. However, given the contractor's expertise and NASA's mission scope, these likely pertain to advanced rocket engines, thrusters, or related components essential for spacecraft propulsion, satellite maneuvering, or launch vehicle stages. Critical applications could range from deep space exploration missions requiring sustained thrust, to orbital insertion and station-keeping for satellites, or powering components of human spaceflight vehicles. Understanding the specific application is key to assessing the contract's necessity and the implications of its sole-source award, as highly specialized or unique propulsion technologies might justify limited competition.

What was the justification provided by NASA for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data indicates the contract was awarded as 'NOT COMPETED' (CT), signifying a sole-source procurement. Federal Acquisition Regulation (FAR) Part 6 outlines the circumstances under which agencies can sole-source contracts, typically requiring a justification and approval (J&A) process. Common justifications include the existence of only one responsible source, a critical need for the item or service that cannot be fulfilled by other sources, or when the agency determines that full and open competition is not in the government's interest. Without access to NASA's specific J&A for this Hamilton Sundstrand contract, the precise rationale remains unknown. However, such justifications often cite unique technical capabilities, proprietary technology, or urgent requirements where competition would cause unacceptable delays or costs.

How does the cost-plus-incentive-fee (CPIF) structure of this contract typically influence contractor behavior and final costs compared to other contract types?

A Cost-Plus-Incentive-Fee (CPIF) contract, like the one awarded to Hamilton Sundstrand, is designed to encourage contractor efficiency and performance by sharing cost savings or overruns with the government based on pre-negotiated targets. The contractor is reimbursed for allowable costs and receives an incentive fee based on meeting or exceeding performance objectives (e.g., cost, schedule, technical performance). This structure incentivizes the contractor to control costs and achieve specific goals more effectively than a simple cost-plus-fixed-fee (CPFF) contract. However, CPIF contracts still carry the risk of cost overruns if targets are not met or if the incentive structure is not well-defined. Compared to fixed-price contracts, CPIF offers more flexibility for complex, high-risk projects where cost and performance outcomes are uncertain at the outset, but it requires robust government oversight to manage effectively.

What is Hamilton Sundstrand Corporation's track record with NASA and other government agencies for similar propulsion system contracts?

Hamilton Sundstrand Corporation, now part of Collins Aerospace, has a long-standing history of providing complex systems and components to NASA and the Department of Defense. Their expertise spans aerospace systems, including propulsion, environmental control, and power generation. While specific details on their track record for propulsion systems contracts with NASA are not provided in this data snippet, the company has been a significant contractor for various space programs, including the Space Shuttle and International Space Station. Their extensive experience suggests a deep understanding of NASA's requirements and a proven capability to deliver complex aerospace technologies. A comprehensive review would involve examining past performance evaluations, contract history, and any documented issues or successes on similar programs.

How does the $248 million contract value compare to NASA's historical spending on propulsion systems or similar aerospace components?

The $248 million contract value represents a substantial investment, but its comparability to NASA's historical spending on propulsion systems depends heavily on the specific nature of the components and the contract duration. NASA's budget for research, development, and acquisition of space technology fluctuates significantly based on program priorities and the scale of ongoing missions. Major propulsion systems for launch vehicles or deep-space exploration can easily run into hundreds of millions or even billions of dollars over their lifecycle. This $248 million contract, awarded over approximately five years (1999-2004), suggests a significant but potentially moderate expenditure for specialized components or sustainment services. To provide a precise benchmark, one would need to compare it against similar procurements for comparable systems during that era or analyze NASA's overall budget allocation to propulsion R&D and procurement.

What are the potential risks associated with a sole-source contract of this magnitude and duration for critical aerospace components?

The primary risks associated with a sole-source contract of this magnitude ($248 million) and duration (over 4.5 years) for critical aerospace components include: 1) Lack of Price Competition: Without competing bids, the government may pay a higher price than if the contract were competed, as the contractor faces less pressure to offer the most cost-effective solution. 2) Reduced Innovation: The absence of competition can stifle innovation, as the contractor may have less incentive to develop novel or more efficient approaches. 3) Contractor Lock-in: If the components are highly specialized or proprietary, NASA could become dependent on Hamilton Sundstrand, making it difficult and costly to switch suppliers in the future. 4) Performance Issues: While the incentive fee aims to mitigate this, a sole-source provider might face less pressure to perform at peak efficiency compared to a contractor in a competitive environment. 5) Oversight Burden: The government must invest significant resources in oversight to ensure fair pricing and adequate performance, especially with cost-reimbursement elements.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Contractor Details

Address: 1 HAMILTON RD 12AB52, WINDSOR LOCKS, CT, 06096

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $370,435,072

Exercised Options: $347,137,718

Current Obligation: $247,963,522

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline