NASA's $2.15B Consolidated Space Operations Contract awarded to Lockheed Martin for engineering services
Contract Overview
Contract Amount: $2,150,327,425 ($2.2B)
Contractor: Lockheed Martin Corporation
Awarding Agency: National Aeronautics and Space Administration
Start Date: 1998-09-25
End Date: 2004-03-30
Contract Duration: 2,013 days
Daily Burn Rate: $1.1M/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: CONSOLIDATED SPACE OPERATIONS CONTRACT PHASE 2.
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77058
State: Texas Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $2.15 billion to LOCKHEED MARTIN CORPORATION for work described as: CONSOLIDATED SPACE OPERATIONS CONTRACT PHASE 2. Key points: 1. The contract's significant value suggests a critical role in supporting space operations. 2. Full and open competition indicates a broad market search, potentially leading to competitive pricing. 3. The contract's duration and cost-plus award fee structure warrant scrutiny for cost control and performance incentives. 4. Engineering services are essential for complex space missions, highlighting the contract's technical importance. 5. The award to a single large contractor may have implications for smaller businesses in the supply chain.
Value Assessment
Rating: fair
The total value of $2.15 billion over its period of performance is substantial. Benchmarking this against similar large-scale, long-term engineering support contracts for complex government programs is crucial. The cost-plus award fee (CPAF) structure, while allowing for flexibility and incentivizing performance, can also lead to higher costs if not managed rigorously. Without specific performance metrics and award fee determinations, it's difficult to definitively assess value for money, but the scale suggests a significant investment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple bidders were likely considered. This approach is generally favorable for price discovery and ensuring the government receives competitive offers. The number of bidders and the specific evaluation criteria would provide further insight into the robustness of the competition.
Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and encouraging a wider range of innovative solutions.
Public Impact
The primary beneficiaries are NASA and its various space programs, which receive essential engineering and operational support. Services delivered include critical engineering, integration, and operational support for space missions. The geographic impact is likely national, supporting NASA's mission across its centers, with specific operational impacts potentially centered around mission control facilities. Workforce implications include the employment of a significant number of engineers, technicians, and support staff by Lockheed Martin and its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee contracts require diligent oversight to ensure costs remain reasonable and that award fees are justified by performance.
- The long duration of the contract could lead to potential cost overruns if not managed proactively.
- Reliance on a single large contractor for such a critical function may present risks if performance falters.
Positive Signals
- Awarding under full and open competition suggests a competitive process that likely secured a capable contractor at a reasonable price.
- The contract's focus on engineering services for space operations indicates a commitment to critical national capabilities.
- The scale of the contract suggests a long-term partnership aimed at ensuring the continuity of vital space missions.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting the aerospace and defense industry. The market for large-scale government engineering support contracts is dominated by a few major aerospace and defense contractors. Spending in this area is driven by national priorities in space exploration, defense, and scientific research. Comparable benchmarks would include other major NASA contracts or similar large-scale engineering support services for other federal agencies like the Department of Defense.
Small Business Impact
As this contract was awarded to Lockheed Martin Corporation, a large prime contractor, the direct impact on small businesses is likely through subcontracting opportunities. The extent to which Lockheed Martin utilizes small business subcontractors will determine the benefit to the small business ecosystem. Without specific subcontracting plans or goals, it's difficult to assess the full impact, but large prime contracts often have set-aside goals for small business participation.
Oversight & Accountability
Oversight for this contract would primarily reside with NASA's contracting officers and program management teams. Accountability measures are typically embedded within the contract's performance work statement and the cost-plus award fee structure, which links contractor payment to performance. Transparency would be enhanced through regular reporting requirements and potentially through NASA's Inspector General reviews, depending on the scope and nature of any identified issues.
Related Government Programs
- NASA Mission Support Contracts
- Space Launch Services
- Satellite Operations Support
- Aerospace Engineering Services
- Government IT and Engineering Support
Risk Flags
- Cost-plus contract type requires diligent oversight.
- Long contract duration may increase risk of cost escalation.
- Performance metrics for award fee need clear definition and rigorous evaluation.
Tags
engineering-services, space-operations, nasa, lockheed-martin-corporation, definitive-contract, full-and-open-competition, cost-plus-award-fee, large-contract, federal-spending, aerospace, texas
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $2.15 billion to LOCKHEED MARTIN CORPORATION. CONSOLIDATED SPACE OPERATIONS CONTRACT PHASE 2.
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORPORATION.
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 $2.15 billion.
What is the period of performance?
Start: 1998-09-25. End: 2004-03-30.
What was the specific performance history of Lockheed Martin Corporation on this contract, particularly concerning the award fee determinations?
The provided data does not include specific details on Lockheed Martin's performance history or the determination of award fees for the Consolidated Space Operations Contract Phase 2. Award fee contracts are structured such that a portion of the payment is contingent upon meeting or exceeding performance targets, as determined by the government. To assess performance, one would need access to NASA's performance evaluations, contractor self-assessments, and the resulting award fee decisions made throughout the contract's life. Without this granular data, it's impossible to definitively state how well Lockheed Martin performed against the contract's objectives or how much of the potential award fee was earned.
How does the total contract value of $2.15 billion compare to other similar large-scale space operations and engineering support contracts awarded by NASA or other agencies?
A total contract value of $2.15 billion for engineering and operations support is substantial and indicative of a mission-critical program. To benchmark this, one would compare it to other major NASA contracts, such as those for the International Space Station (ISS) support, space launch services, or deep space exploration missions. For instance, contracts for managing and operating large scientific instruments or complex ground systems often run into hundreds of millions or billions of dollars over several years. Similarly, large Department of Defense space programs also involve contracts of similar magnitude for satellite operations, ground segment development, and system sustainment. The specific nature of 'Consolidated Space Operations' suggests a broad scope, potentially encompassing multiple mission types, which would justify a higher value compared to more narrowly focused contracts.
What were the key risk indicators identified during the procurement process for this contract, and how were they mitigated?
The provided data does not detail the specific risk indicators identified during the procurement for the Consolidated Space Operations Contract Phase 2. However, for a contract of this magnitude and complexity, common risk areas would likely include technical risks (e.g., system integration challenges, performance shortfalls), schedule risks (e.g., delays in critical milestones), cost risks (e.g., potential for cost overruns, inaccurate estimates), and management risks (e.g., contractor's ability to manage a large team and complex program). Mitigation strategies typically involve robust contract terms, performance incentives, clear deliverables, government oversight, and potentially requiring the contractor to develop and implement risk management plans. The use of a Cost Plus Award Fee (CPAF) structure itself can be seen as a mechanism to incentivize the contractor to manage performance and cost risks effectively.
What is the historical spending pattern for consolidated space operations support, and does this contract represent an increase or decrease in overall federal investment in this area?
The provided data focuses on a single contract award and does not offer historical spending patterns for consolidated space operations support. To analyze historical trends, one would need to examine NASA's budget allocations and contract awards over multiple fiscal years for similar services. This would involve looking at predecessor contracts, related program spending, and overall trends in federal investment in space operations. Without this broader context, it's impossible to determine if the $2.15 billion awarded to Lockheed Martin represents an increase, decrease, or stable level of federal investment in this specific area. Such an analysis would require access to historical contract databases and budget documents.
How effective has the Cost Plus Award Fee (CPAF) contract type been in ensuring value for money for NASA in similar large-scale engineering support contracts?
The effectiveness of the Cost Plus Award Fee (CPAF) contract type in ensuring value for money for NASA is a subject of ongoing debate and depends heavily on implementation and oversight. CPAF contracts are designed to provide flexibility for evolving requirements and to incentivize contractor performance through award fees tied to specific metrics. When well-defined performance objectives are established and rigorously evaluated, CPAF can drive high performance and innovation, potentially leading to good value. However, if performance metrics are poorly defined, or if oversight is lax, CPAF contracts can lead to cost growth without commensurate performance improvements, thus diminishing value for money. NASA's experience with CPAF varies; it is often used for complex, high-risk, or R&D-intensive programs where outcomes are uncertain, but it requires strong government management to be truly effective.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Lockheed Martin Corp
Address: TWO CORPORATE PLAZA, HOUSTON, TX, 77058
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $3,732,722,160
Exercised Options: $2,152,861,514
Current Obligation: $2,150,327,425
Actual Outlays: $2,323,087
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 1998-09-25
Current End Date: 2004-03-30
Potential End Date: 2004-03-30 00:00:00
Last Modified: 2025-03-28
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