NASA's $4.42B contract for Ares I-X first stage development leverages Space Shuttle booster technology
Contract Overview
Contract Amount: $4,420,784,857 ($4.4B)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2006-04-17
End Date: 2026-06-30
Contract Duration: 7,379 days
Daily Burn Rate: $599.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: FIRST DDT AND E, ARES I-X, AND FLIGHT TESTS. FIRST STAGE WILL BE A FIVE SEGMENT, SOLID ROCKET BOOSTER DERIVED FROM THE SPACE SHUTTLE PROGRAM (SSP) SOLID ROCKET BOOSTER (SRB)/REUSABLE SOLID ROCKET MOTOR (RSRM). THE CONTRACTOR SHALL FURNISH THE NECESSARY MANAGEMENT, ENGINEERING, LABOR, FACILITIES, TOOLS, EQUIPMENT, AND MATERIALS REQUIRED FOR FIRST STAGE DEVELOPMENT, QUALIFICATION, CERTIFICATION AND ACCEPTANCE PROGRAM. ACTIVITIES INCLUDE: REDESIGN AND TESTING OF THE MOTOR TO INCORPORATE THE FIFTH SEGMENT AND PRODUCTION OF FIVE FULL SCALE GROUND STATIC TEST MOTORS: TWO DEVELOPMENT MOTORS (DMS)-AND THREE QUALIFICATION MOTORS (QMS); STRUCTURAL TEST ARTICLE (STA), GROUND VIBRATION TEST MOTORS (GVTMS) AND OTHER DEVELOPMENT TESTING; REDESIGN OF THE AVIONICS, DECELERATION, SEPARATION, AND FLIGHT TERMINATION SYSTEM (FTS) SUBSYSTEMS; ARES I-X: SIMULATED ARES I OUTER MOLD LINE/MASS PROPERTIES USING MODIFIED SRB/RSRM; AND THREE FLIGHT TEST VEHICLES. TAS::80 0124::TAS
Place of Performance
Location: CORINNE, BOX ELDER County, UTAH, 84307
State: Utah Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $4.42 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: FIRST DDT AND E, ARES I-X, AND FLIGHT TESTS. FIRST STAGE WILL BE A FIVE SEGMENT, SOLID ROCKET BOOSTER DERIVED FROM THE SPACE SHUTTLE PROGRAM (SSP) SOLID ROCKET BOOSTER (SRB)/REUSABLE SOLID ROCKET MOTOR (RSRM). THE CONTRACTOR SHALL FURNISH THE NECESSARY MANAGEMENT, ENGINEERING, L… Key points: 1. Contract leverages proven Space Shuttle Solid Rocket Booster technology for a new launch system. 2. Significant investment in redesign and testing indicates a focus on robust development. 3. Long contract duration suggests a complex, multi-phase development and qualification process. 4. Sole-source award raises questions about potential cost efficiencies and market competition. 5. The contract covers a broad scope from initial design to production of test motors. 6. Focus on qualification and certification highlights a commitment to safety and reliability.
Value Assessment
Rating: fair
The total contract value of $4.42 billion for the development of a rocket's first stage is substantial. Benchmarking this against similar large-scale propulsion development programs is challenging due to the unique nature of the Ares I-X program and its reliance on existing, albeit modified, Space Shuttle technology. The cost-plus-award-fee structure allows for flexibility but also carries inherent risks of cost overruns if not managed tightly. Without detailed breakdowns of the redesign and testing phases, a precise value-for-money assessment is difficult, but the scale suggests significant engineering and manufacturing efforts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to Northrop Grumman Systems Corporation. This approach was likely chosen due to the contractor's extensive experience and existing infrastructure related to the Space Shuttle Solid Rocket Booster (SRB) program, which forms the basis for the Ares I-X first stage. While this ensures continuity and leverages existing expertise, it limits the opportunity for competitive bidding, which could potentially drive down costs or foster innovation from other industry players.
Taxpayer Impact: A sole-source award means taxpayers do not benefit from the price discovery that typically occurs in a competitive bidding process. This can lead to higher costs compared to what might be achieved through open competition.
Public Impact
The primary beneficiaries are NASA and its future space exploration missions, which rely on the Ares I-X for launch capabilities. The contract delivers critical components and development services for a new generation of space launch vehicles. The geographic impact is concentrated around Northrop Grumman's facilities involved in the development and testing, primarily in Utah. Workforce implications include employment for engineers, technicians, and manufacturing personnel involved in rocket propulsion systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially impacting cost efficiency.
- Cost-plus-award-fee structure requires diligent oversight to prevent cost overruns.
- Reliance on modified legacy technology may introduce unforeseen integration challenges.
- Long contract duration increases exposure to programmatic and technological risks over time.
Positive Signals
- Leverages established expertise and infrastructure from the Space Shuttle program.
- Focus on rigorous testing and qualification aims to ensure system reliability.
- Contractor has a proven track record in large-scale aerospace projects.
- Development of a new launch system supports future NASA exploration goals.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on guided missile and space vehicle propulsion. The market for large-scale rocket propulsion systems is highly specialized, dominated by a few key contractors with the necessary expertise and facilities. NASA's spending in this area is critical for maintaining national capabilities in space exploration and launch services. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of each new rocket development program, but the scale of this contract is consistent with major aerospace development initiatives.
Small Business Impact
The contract data indicates that small business participation (sb) is marked as false, and there is no explicit mention of small business set-asides. This suggests that the primary contract is not directly aimed at small businesses. However, Northrop Grumman, as the prime contractor, may engage small businesses as subcontractors for specific components or services. The extent of subcontracting to small businesses would depend on Northrop Grumman's internal policies and the specific needs of the program, but there is no explicit mandate within this contract's provided data.
Oversight & Accountability
Oversight for this contract is managed by NASA's National Aeronautics and Space Administration. As a cost-plus-award-fee contract, it requires robust financial and performance oversight to ensure that costs are reasonable and that award fees are earned based on objective performance criteria. Transparency is facilitated through NASA's reporting mechanisms. While specific Inspector General jurisdiction is not detailed here, NASA's Office of Inspector General typically oversees major agency contracts for fraud, waste, and abuse.
Related Government Programs
- Space Launch System (SLS)
- Space Shuttle Program (SSP)
- NASA Exploration Systems
- Rocket Propulsion Development Programs
- Solid Rocket Booster (SRB) Technology
Risk Flags
- Sole-source award
- Long contract duration
- Cost-plus-award-fee structure
- Reliance on legacy technology adaptation
Tags
nasa, northrop-grumman-systems-corporation, space-exploration, rocket-propulsion, aerospace, defense, cost-plus-award-fee, sole-source, development, utah, definitive-contract, space-shuttle-technology
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $4.42 billion to NORTHROP GRUMMAN SYSTEMS CORPORATION. FIRST DDT AND E, ARES I-X, AND FLIGHT TESTS. FIRST STAGE WILL BE A FIVE SEGMENT, SOLID ROCKET BOOSTER DERIVED FROM THE SPACE SHUTTLE PROGRAM (SSP) SOLID ROCKET BOOSTER (SRB)/REUSABLE SOLID ROCKET MOTOR (RSRM). THE CONTRACTOR SHALL FURNISH THE NECESSARY MANAGEMENT, ENGINEERING, LABOR, FACILITIES, TOOLS, EQUIPMENT, AND MATERIALS REQUIRED FOR FIRST STAGE DEVELOPMENT, QUALIFICATION, CERTIFICATION AND ACCEPTANCE PROGRAM. ACTIVITIES INCLUDE: REDESIGN AND TESTING OF THE MOTOR TO INCORPORATE THE FIFTH
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS 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 $4.42 billion.
What is the period of performance?
Start: 2006-04-17. End: 2026-06-30.
What is Northrop Grumman's track record with large-scale rocket propulsion systems?
Northrop Grumman Systems Corporation has a significant and extensive track record in developing and manufacturing large-scale rocket propulsion systems, most notably the Solid Rocket Boosters (SRBs) for NASA's Space Shuttle Program. They have also been involved in other major aerospace and defense projects requiring complex propulsion solutions. Their experience with the SRBs, which are being adapted for the Ares I-X first stage, provides a strong foundation of expertise in design, manufacturing, testing, and integration of solid rocket motors. This historical performance suggests a high level of capability in handling the technical challenges associated with this contract.
How does the cost-plus-award-fee (CPAF) structure compare to other contract types for this kind of development?
The Cost-Plus-Award-Fee (CPAF) structure is common for complex research and development programs where the final costs and performance outcomes are uncertain at the outset. Unlike fixed-price contracts, CPAF allows the contractor to recover incurred costs plus a base fee, with the potential for an additional award fee based on meeting or exceeding specific performance objectives. This contrasts with Cost-Plus-Fixed-Fee (CPFF), which has a fixed fee, or firm-fixed-price contracts, which offer less flexibility for cost fluctuations. CPAF aims to incentivize contractor performance by linking a portion of their profit to achieving defined goals, while still providing flexibility for NASA to adapt to evolving technical requirements during development.
What are the primary risks associated with adapting Space Shuttle SRB technology for the Ares I-X?
The primary risks associated with adapting Space Shuttle SRB technology for the Ares I-X first stage involve integration challenges, performance modifications, and potential obsolescence of certain components or manufacturing processes. While the core technology is proven, redesigning for a fifth segment and incorporating new avionics requires careful engineering to ensure compatibility and desired performance characteristics. There's also a risk that some original manufacturing equipment or specialized knowledge may no longer be readily available, necessitating new approaches or significant investment in retooling. Ensuring the reliability and safety of the modified system through rigorous testing is paramount to mitigate these risks.
How does the $4.42 billion total contract value compare to other NASA rocket development programs?
The $4.42 billion total contract value for the Ares I-X first stage development is substantial and aligns with the significant investments typically required for developing new large-scale rocket systems. For context, NASA's Space Launch System (SLS) core stage development has also involved multi-billion dollar investments. While direct comparisons are complex due to differing program scopes, technological approaches, and inflation, the magnitude of this contract reflects the inherent costs associated with advanced aerospace engineering, materials, manufacturing, and extensive testing required for human-rated or heavy-lift launch vehicles. It represents a significant portion of NASA's budget allocated to future launch capabilities.
What are the implications of the long contract duration (2006-2026) for program management and cost?
The extended contract duration of approximately 20 years (from April 2006 to June 2026) has significant implications for program management and cost. Such a long timeline allows for thorough development, testing, and qualification, which is crucial for complex aerospace projects. However, it also increases the risk of cost escalation due to inflation, potential changes in program priorities, and the need for sustained management and oversight over decades. Managing a program over such an extended period requires robust long-term planning, adaptable budgeting, and consistent stakeholder engagement to maintain focus and control costs effectively.
What is the significance of the 'first stage development, qualification, certification and acceptance program' scope?
The scope encompassing 'first stage development, qualification, certification and acceptance program' is critical as it covers the entire lifecycle from initial design modifications and testing through to ensuring the stage meets all required performance and safety standards for flight. Development involves engineering and prototyping; qualification proves the design meets requirements under expected conditions; certification is the formal approval for flight, often involving extensive documentation and review; and acceptance signifies the final sign-off by the customer (NASA). This comprehensive scope ensures that the first stage is not only designed but also rigorously validated and approved for operational use, forming the foundational element of the Ares I-X launch vehicle.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 9160 N HWY 83, CORINNE, UT, 84307
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $4,474,452,013
Exercised Options: $4,474,452,013
Current Obligation: $4,420,784,857
Actual Outlays: $965,806,085
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2006-04-17
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2026-03-26
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