NASA awards $2.87B to Lockheed Martin for External Tank Production and O&M, a sole-source contract
Contract Overview
Contract Amount: $2,870,112,487 ($2.9B)
Contractor: Lockheed Martin Corp
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2000-10-27
End Date: 2013-02-28
Contract Duration: 4,507 days
Daily Burn Rate: $636.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: R&D
Official Description: PRODUCTION AND O&M FOR 35 EXTERNAL TANKS
Place of Performance
Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70129
Plain-Language Summary
National Aeronautics and Space Administration obligated $2.87 billion to LOCKHEED MARTIN CORP for work described as: PRODUCTION AND O&M FOR 35 EXTERNAL TANKS Key points: 1. High value contract awarded to a single vendor. 2. Sole-source award limits competitive pricing. 3. Cost-plus incentive fee structure may incentivize cost control. 4. Long duration suggests significant program commitment.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure, while offering potential for cost savings, can lead to higher overall costs compared to fixed-price contracts. Benchmarking is difficult without detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning NASA did not solicit bids from multiple vendors. This lack of competition can reduce price discovery and potentially lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition in this large contract raises concerns about whether the government achieved the best possible price.
Public Impact
Supports critical space exploration missions. Ensures continued operation of vital space hardware. Impacts the aerospace manufacturing sector and associated jobs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
Positive Signals
- Long-term commitment to a critical program
- Potential for cost savings via incentive fee
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing sector. Spending in this sector is highly specialized and often involves complex, high-risk R&D and production for government programs.
Small Business Impact
The data indicates this contract was awarded to Lockheed Martin Corp, a large prime contractor. There is no direct information on small business participation within this specific award, but large sole-source contracts often have limited direct subcontracting opportunities for small businesses.
Oversight & Accountability
The contract's long duration and sole-source nature warrant close oversight to ensure cost efficiency and performance. NASA's internal oversight mechanisms and potential reviews by government accountability offices are crucial.
Related Government Programs
- Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
- National Aeronautics and Space Administration Contracting
- National Aeronautics and Space Administration Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Limited transparency in pricing
- High contract value
Tags
guided-missile-and-space-vehicle-propuls, national-aeronautics-and-space-administr, la, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $2.87 billion to LOCKHEED MARTIN CORP. PRODUCTION AND O&M FOR 35 EXTERNAL TANKS
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
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 $2.87 billion.
What is the period of performance?
Start: 2000-10-27. End: 2013-02-28.
What was the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, critical national security needs, or a lack of viable alternatives. Without specific documentation, it's difficult to assess if alternative competitive strategies were thoroughly explored. NASA would need to provide evidence of market research and a compelling reason for not competing the requirement to ensure taxpayer value.
How effectively did the cost-plus incentive fee structure manage costs and incentivize performance compared to other contract types?
Cost-plus incentive fee contracts aim to balance cost control with contractor performance by establishing target costs and sharing mechanisms for cost savings or overruns. The effectiveness hinges on the realism of the target cost and the fairness of the incentive structure. A detailed post-award review would be needed to assess if this structure truly optimized spending and encouraged efficiency for this specific contract.
What is the long-term strategic value and cost-effectiveness of continuing this sole-source production and O&M for external tanks?
The long-term value depends on NASA's ongoing mission requirements and the strategic importance of the external tanks. Cost-effectiveness is questionable due to the sole-source nature. Future procurements should explore competitive options if feasible to ensure better pricing and foster innovation within the supply chain, unless unique circumstances permanently preclude competition.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
Product/Service Code: SPACE VEHICLES
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Contractor Details
Address: 13800 OLD GENTILLY ROAD MS 2300, NEW ORLEANS, LA, 70129
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $2,922,489,906
Exercised Options: $2,922,489,906
Current Obligation: $2,870,112,487
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2000-10-27
Current End Date: 2013-02-28
Potential End Date: 2013-02-28 00:00:00
Last Modified: 2026-03-04
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