DoD's $26.8M contract for guided missile and space vehicles awarded to Orbital Sciences LLC

Contract Overview

Contract Amount: $26,828,660 ($26.8M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2011-03-31

End Date: 2014-01-31

Contract Duration: 1,037 days

Daily Burn Rate: $25.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DUCTED ROCKETS FOR BASE TARGET

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85286

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $26.8 million to ORBITAL SCIENCES LLC for work described as: DUCTED ROCKETS FOR BASE TARGET Key points: 1. Value for money appears fair given the specialized nature of guided missile and space vehicle manufacturing. 2. Competition dynamics indicate a sole-source award, potentially limiting price discovery and increasing risk. 3. Risk indicators include the sole-source nature and the long duration of the contract. 4. Performance context is limited without specific details on deliverables and outcomes. 5. Sector positioning places this contract within the defense industrial base, specifically guided missile manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar specialized defense components. The fixed-price nature suggests an attempt to control costs, but the lack of competition means there's less assurance of optimal pricing. The total value of over $26 million for a three-year period indicates a significant investment in this capability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Orbital Sciences LLC, was solicited. This approach is typically used when only one responsible source is available or when a compelling justification exists for not seeking competition. The lack of multiple bidders means the government did not benefit from a competitive bidding process to drive down prices or encourage innovation.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government's negotiating position is weakened without alternative offers.

Public Impact

The primary beneficiary is the Department of Defense, which receives critical components for its missile and space programs. Services delivered include the manufacturing of guided missiles and space vehicles, essential for national security. Geographic impact is primarily within Arizona, where the contractor is located. Workforce implications include employment opportunities within the specialized aerospace and defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and innovation.
Lack of transparency in the justification for sole-source award.
Potential for cost overruns without competitive pressure.
Long contract duration could lead to scope creep or evolving requirements not fully captured in initial pricing.

Positive Signals

Award to a known entity (Orbital Sciences LLC) may indicate established capability.
Firm Fixed Price contract type aims to provide cost certainty.
Contract supports critical defense capabilities.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized and critical part of the defense industrial base. This sector is characterized by high barriers to entry, significant R&D investment, and close ties to government procurement. Market size is substantial, driven by national security needs, but dominated by a few key players. Comparable spending benchmarks are difficult to establish due to the proprietary and specialized nature of the products.

Small Business Impact

There is no indication of small business set-asides or subcontracting requirements in the provided data. As a sole-source award to a large contractor, the direct impact on small businesses is likely minimal unless Orbital Sciences LLC voluntarily engages them for subcontracting. Further analysis would be needed to determine if subcontracting opportunities were mandated or pursued.

Oversight & Accountability

Oversight mechanisms would typically involve the Defense Contract Management Agency (DCMA), responsible for contract administration and ensuring compliance with terms and conditions. Accountability measures are inherent in the contract's performance requirements and payment schedules. Transparency is limited due to the sole-source nature, but contract award data is publicly available.

Related Government Programs

Guided Missile Manufacturing
Space Vehicle Manufacturing
Defense Procurement
Aerospace Industry Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost inefficiency
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.8 million to ORBITAL SCIENCES LLC. DUCTED ROCKETS FOR BASE TARGET

Who is the contractor on this award?

The obligated recipient is ORBITAL SCIENCES 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 $26.8 million.

What is the period of performance?

Start: 2011-03-31. End: 2014-01-31.

What specific types of guided missiles or space vehicles were procured under this contract?

The provided data indicates the contract was for 'DUCTED ROCKETS FOR BASE TARGET' and falls under the 'Guided Missile and Space Vehicle Manufacturing' NAICS code. However, specific details regarding the exact models, capabilities, or intended use of these guided missiles and space vehicles are not publicly available in this summary. Such information is often classified or considered sensitive due to national security implications. Further investigation into contract line item numbers (CLINs) or associated technical documentation would be required to ascertain the precise nature of the procured items.

What was the justification for awarding this contract on a sole-source basis?

The data explicitly states the contract was 'NOT COMPETED,' implying a sole-source award. While the specific justification is not detailed here, common reasons for sole-source awards in defense contracting include: unique capabilities possessed by only one contractor, urgent and compelling needs where competition is impractical, or when the government has already made substantial investments in a particular system requiring follow-on support from the original manufacturer. Without access to the official justification documentation (e.g., a Justification and Approval document), the precise rationale remains speculative but likely relates to specialized technical requirements or program continuity.

How does the per-unit cost, if calculable, compare to similar defense procurements?

Calculating a meaningful per-unit cost is not feasible with the provided data. The contract value is $26,828,660.36, and the number of units procured is not specified. Furthermore, 'Guided Missile and Space Vehicle Manufacturing' encompasses a vast range of products with vastly different complexities and costs. A 'ducted rocket' could refer to a component or a complete system. Without knowing the exact item, its specifications, and the quantity, any per-unit cost calculation would be meaningless. Benchmarking would require detailed technical specifications and quantities for comparison, which are not available here.

What is Orbital Sciences LLC's track record with similar defense contracts?

Orbital Sciences LLC (now part of Northrop Grumman) has a significant history in developing and manufacturing aerospace systems, including missiles, rockets, and satellites for both government and commercial clients. They have been a key contractor for various U.S. defense and space programs, including launch services, satellite systems, and missile defense components. Their track record generally reflects substantial technical expertise in complex aerospace engineering and manufacturing. However, specific performance metrics, past issues, or successes related to 'ducted rockets for base target' would require a deeper dive into their contract history beyond this single award.

What are the potential risks associated with a sole-source award of this magnitude?

Sole-source awards, especially for significant amounts like $26.8 million, carry inherent risks. Primarily, the lack of competition can lead to higher prices than might be achieved through a competitive process, as the contractor faces less pressure to offer the most cost-effective solution. There's also a reduced incentive for innovation, as the contractor may not need to differentiate themselves on technical merit or efficiency to secure the contract. Furthermore, the government's negotiating leverage is diminished. Dependence on a single supplier can also create supply chain risks if that supplier encounters production issues, financial instability, or faces geopolitical challenges.

How does this contract fit into the broader context of Department of Defense spending on missile technology?

This contract represents a specific investment within the Department of Defense's substantial budget allocated to missile technology and related aerospace systems. While $26.8 million is a significant sum for a single contract, it is a fraction of the overall DoD spending on research, development, procurement, and sustainment of missile systems, which can run into billions of dollars annually. Such contracts are crucial for maintaining and advancing the nation's strategic deterrence capabilities, supporting tactical operations, and developing next-generation missile technologies. This particular award likely supports a niche requirement within a larger, ongoing missile program.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001910R0098

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 1575 SOUTH PRICE RD, CHANDLER, AZ, 85286

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,828,660

Exercised Options: $26,828,660

Current Obligation: $26,828,660

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline