NASA's Ares I Upper Stage contract awarded to Boeing for $1.05 billion, spanning over 20 years

Contract Overview

Contract Amount: $10,462,406,426 ($10.5B)

Contractor: THE Boeing Company

Awarding Agency: National Aeronautics and Space Administration

Start Date: 2007-09-01

End Date: 2028-12-31

Contract Duration: 7,792 days

Daily Burn Rate: $1.3M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: PROVIDE DEVELOPMENTAL HARDWARE AND TEST ARTICLES, AND MANUFACTURE AND ASSEMBLE ARES I UPPER STAGES. THE UPPER STAGE (US) ELEMENT IS AN INTEGRAL PART OF THE ARES I LAUNCH VEHICLE AND PROVIDES THE SECOND STAGE OF FLIGHT. THE US ELEMENT IS RESPONSIBLE FOR THE ROLL CONTROL DURING THE FIRST STAGE BURN AND SEPARATION; AND WILL PROVIDE THE GUIDANCE AND NAVIGATION, COMMAND AND DATA HANDLING, AND OTHER AVIONICS FUNCTIONS FOR THE ARES I DURING ALL PHASES OF THE ASCENT FLIGHT. THE US ELEMENT IS A NEW DESIGN THAT EMPHASIZES SAFETY, OPERABILITY, AND MINIMUM LIFE CYCLE COST. THE OVERALL DESIGN, DEVELOPMENT, TEST AND EVALUATION (DDT&E), PRODUCTION, AND SUSTAINING ENGINEERING EFFORTS INCLUDE ACTIVITIES PERFORMED BY THREE ORGANIZATIONS; THE NASA DESIGN TEAM (NDT), THE UPPER STAGE PRODUCTION CONTRACTOR (USPC) AND THE INSTRUMENT UNIT PRODUCTION CONTRACTOR (IUPC). FOR CLARITY, THE USPC WILL BE REFERRED TO AS THE CONTRACTOR THROUGHOUT THIS DOCUMENT. NASA IS RESPONSIBLE FOR THE INTEGRATION OF THE PRIMARY ELEMENTS OF THE ARES I LAUNCH VEHICLE INCLUDING: THE FIRST STAGE, US INCLUDING INSTRUMENT UNIT (IU), AND US ENGINE; AND WILL ALSO INTEGRATE THE ARES I LAUNCH VEHICLE AT THE LAUNCH SITE. NASA IS RESPONSIBLE FOR THE DDT&E, INCLUDING TECHNICAL AND PROGRAMMATIC INTEGRATION OF THE US SUBSYSTEMS AND GOVERNMENT-FURNISHED PROPERTY. NASA WILL LEAD THE EFFORT TO DEVELOP THE REQUIREMENTS AND SPECIFICATIONS OF THE US ELEMENT, THE DEVELOPMENT PLAN AND TESTING REQUIREMENTS, AND ALL DESIGN DOCUMENTATION, INITIAL MANUFACTURING AND ASSEMBLY PROCESS PLANNING, LOGISTICS PLANNING, AND OPERATIONS SUPPORT PLANNING. DEVELOPMENT, QUALIFICATION, AND ACCEPTANCE TESTING WILL BE CONDUCTED BY NASA AND THE CONTRACTOR TO SATISFY REQUIREMENTS AND FOR RISK MITIGATION. NASA IS RESPONSIBLE FOR THE OVERALL UPPER STAGE VERIFICATION AND VALIDATION PROCESS AND WILL REQUIRE SUPPORT FROM THE CONTRACTOR. THE CONTRACTOR IS RESPONSIBLE FOR THE MANUFACTURE AND ASSEMBLY OF THE UPPER STAGE TEST FLIGHT AND OPERATIONAL UPPER STAGE UNITS INCLUDING THE INSTALLATION OF UPPER STAGE INSTRUMENT UNIT, THE GOVERNMENT-FURNISHED US ENGINE, BOOSTER SEPARATION MOTORS, AND OTHER GOVERNMENT-FURNISHED PROPERTY. A DESCRIPTION OF THE NASA MANAGED AND PERFORMED EFFORTS IS CONTAINED IN THE US WORK PACKAGES AND WILL BE MADE AVAILABLE TO THE CONTRACTOR TO ENSURE THEIR UNDERSTANDING OF THE ROLES AND RESPONSIBILITIES OF THE NDT, IUPC, AND CONTRACTOR DURING THE DESIGN, DEVELOPMENT, AND OPERATION OF THE US ELEMENT. THE US CONCEPTUAL DESIGN DESCRIBED IN THE USO-CLV-SE-25704 US DESIGN DEFINITION DOCUMENT (DDD) IS THE BASELINE DESIGN FOR THIS CONTRACT. THE CONTRACTORS EARLY ROLE WILL BE TO PROVIDE PRODUCIBILITY ENGINEERING SUPPORT TO NASA VIA THE ESTABLISHED US OFFICE STRUCTURE AND TO PROVIDE INPUTS INTO THE FINAL DESIGN CONFIGURATION, SPECIFICATIONS, AND STANDARDS. NASA WILL TRANSITION THE MANUFACTURING AND ASSEMBLY, LOGISTICS SUPPORT INFRASTRUCTURE, CONFIGURATION MANAGEMENT, AND THE SUSTAINING ENGINEERING FUNCTIONS TO THE CONTRACTOR AT THE KEY POINTS DURING THE DEVELOPMENT AND IMPLEMENTATION OF THE PROGRAM CURRENTLY PLANNED TO OCCUR NO LATER THAN 90 DAYS AFTER THE COMPLETION OF THE FOLLOWING MAJOR MILESTONES: MANUFACTURING AND ASSEMBLY US PRELIMINARY DESIGN REVIEW (PDR) LOGISTICS SUPPORT INFRASTRUCTURE US PDR CONFIGURATION MANAGEMENT US CRITICAL DESIGN REVIEW CDR) SUSTAINING ENGINEERING US DESIGN CERTIFICATION REVIEW (DCR) AFTER THE COMPLETION OF AN ORDERLY TRANSITION OF ROLES AND RESPONSIBILITIES TO THE CONTRACTOR, NASA WILL ASSUME AN INSIGHT ROLE INTO THE CONTRACTORS PRODUCTION, SUSTAINING ENGINEERING, AND OPERATIONS SUPPORT OF THE ARES I US TEST PROGRAM AND FLIGHT HARDWARE. AFTER DCR, THE CONTRACTOR WILL BE RESPONSIBLE FOR SUSTAINING ENGINEERING PER SOW SECTION 4.7, AS NECESSARY TO MAINTAIN AND SUPPORT THE US CONFIGURATION AND FOR PRODUCTION AND OPERATIONS SUPPORT.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35824

State: Alabama Government Spending

Plain-Language Summary

National Aeronautics and Space Administration obligated $10.46 billion to THE BOEING COMPANY for work described as: PROVIDE DEVELOPMENTAL HARDWARE AND TEST ARTICLES, AND MANUFACTURE AND ASSEMBLE ARES I UPPER STAGES. THE UPPER STAGE (US) ELEMENT IS AN INTEGRAL PART OF THE ARES I LAUNCH VEHICLE AND PROVIDES THE SECOND STAGE OF FLIGHT. THE US ELEMENT IS RESPONSIBLE FOR THE ROLL CONTROL DURING TH… Key points: 1. Contract focuses on developing and manufacturing critical components for the Ares I launch vehicle's upper stage. 2. The upper stage is essential for guidance, navigation, and command handling during ascent. 3. Emphasis on safety, operability, and minimizing life cycle costs in the new design. 4. Contract duration extends significantly, indicating a long-term commitment to the Ares program. 5. Boeing's role encompasses design, development, testing, production, and sustaining engineering. 6. The contract value represents a substantial investment in space exploration technology.

Value Assessment

Rating: fair

The contract value of $1.05 billion over a 20-year period suggests a significant investment in a complex, long-term project. Benchmarking this against similar large-scale aerospace development contracts is challenging due to the unique nature of the Ares I program. The cost-plus award fee structure allows for flexibility but also carries inherent risks of cost overruns if not managed tightly. The emphasis on minimum life cycle cost is a positive indicator, but actual performance against this goal will be crucial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple companies had the opportunity to bid. The specific number of bidders is not provided, but this competitive approach is generally expected to foster better pricing and innovation. The selection of Boeing suggests they offered the most advantageous proposal based on technical merit, cost, and other factors.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of securing the best value through a competitive bidding process, potentially driving down costs compared to sole-source awards.

Public Impact

The primary beneficiaries are NASA and its future space exploration missions, which rely on the Ares I launch vehicle. The contract delivers developmental hardware, test articles, and the manufactured upper stage for the Ares I rocket. The geographic impact is centered around NASA's facilities and Boeing's manufacturing sites, primarily in Alabama. Workforce implications include employment for engineers, technicians, and manufacturing personnel involved in aerospace development and production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration increases the risk of scope creep and potential cost increases over time.
Cost-plus award fee contracts can incentivize cost growth if performance metrics are not strictly defined and monitored.
The Ares I program itself faced significant changes and eventual cancellation, raising questions about the long-term utility of this specific contract's deliverables.
Reliance on a single contractor for a critical component like the upper stage can create dependency.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Emphasis on safety, operability, and minimum life cycle cost in the design phase.
Boeing's extensive experience in aerospace manufacturing provides a strong foundation for successful execution.
The contract aims to deliver cutting-edge technology for space launch capabilities.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized area of the aerospace industry. This sector is characterized by high R&D investment, stringent quality control, and long development cycles. Spending in this area is often driven by government initiatives for national security and space exploration. Comparable spending benchmarks would typically involve other major space launch vehicle development programs.

Small Business Impact

The data indicates that small business participation was not a primary set-aside component for this large-scale prime contract, as indicated by 'sb': false. However, Boeing, as the prime contractor, would likely engage small businesses for subcontracting opportunities to fulfill various specialized needs in manufacturing, materials, and components, contributing to the broader small business ecosystem within the aerospace supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under NASA's contracting officer and program management. Given the nature of the work and its importance to the Ares program, regular reviews, milestone tracking, and performance assessments would be expected. Transparency is typically managed through contract reporting requirements. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Ares Program
NASA Launch Services
Space Launch System (SLS)
Commercial Crew Program
Space Exploration Technologies

Risk Flags

Programmatic Risk: Ares I program faced significant challenges and eventual cancellation.
Cost Overrun Potential: CPAF contracts can be susceptible to cost increases.
Technical Complexity: Development of new, critical space vehicle components carries inherent technical risks.
Long Duration Risk: Extended contract period increases exposure to changing requirements or priorities.

Frequently Asked Questions

What is this federal contract paying for?

National Aeronautics and Space Administration awarded $10.46 billion to THE BOEING COMPANY. PROVIDE DEVELOPMENTAL HARDWARE AND TEST ARTICLES, AND MANUFACTURE AND ASSEMBLE ARES I UPPER STAGES. THE UPPER STAGE (US) ELEMENT IS AN INTEGRAL PART OF THE ARES I LAUNCH VEHICLE AND PROVIDES THE SECOND STAGE OF FLIGHT. THE US ELEMENT IS RESPONSIBLE FOR THE ROLL CONTROL DURING THE FIRST STAGE BURN AND SEPARATION; AND WILL PROVIDE THE GUIDANCE AND NAVIGATION, COMMAND AND DATA HANDLING, AND OTHER AVIONICS FUNCTIONS FOR THE ARES I DURING ALL PHASES OF THE ASCENT FLIGHT. THE US ELEMENT IS A NEW DE

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

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 $10.46 billion.

What is the period of performance?

Start: 2007-09-01. End: 2028-12-31.

What was the specific performance history of The Boeing Company on this contract prior to the Ares I program's cancellation?

Detailed performance metrics for The Boeing Company on this specific contract prior to the cancellation of the Ares I program are not publicly available in the provided data. However, the contract was a Cost Plus Award Fee (CPAF) type, which implies that Boeing's performance was evaluated against specific criteria, and award fees were contingent upon meeting or exceeding those targets. NASA's internal oversight mechanisms would have tracked progress, cost, schedule, and technical performance. Given the program's eventual termination, a full performance history encompassing the entire contract duration is moot. Post-cancellation, the focus would shift to contract close-out procedures and any lessons learned regarding development and manufacturing processes.

How does the $1.05 billion contract value compare to other major NASA launch vehicle development contracts?

The $1.05 billion contract value for the Ares I upper stage development and manufacturing is substantial, reflecting the complexity and long-term nature of developing a new human-rated launch vehicle component. Comparing it directly to other contracts requires careful consideration of scope and program phase. For instance, the development of the Space Launch System (SLS), NASA's subsequent heavy-lift rocket, involved multi-billion dollar investments across various contractors for its core stage, boosters, and upper stages. Early development contracts for the Space Shuttle also represented significant, multi-year financial commitments. While $1.05 billion is a large sum, it represents a portion of a larger, ambitious program, and its 'value' is best assessed within the context of the overall program's goals and technological advancements it aimed to achieve.

What were the primary risks identified for this contract, and how were they mitigated?

Primary risks for a contract of this nature, involving new design and development for a human-rated space vehicle, would typically include technical risks (e.g., achieving desired performance, integration challenges), schedule risks (e.g., development delays), cost risks (e.g., exceeding budget), and safety risks (e.g., ensuring crew safety). The contract's Cost Plus Award Fee (CPAF) structure was intended to incentivize performance and manage cost risks by linking contractor profit to achieving specific performance objectives. NASA's design team (NDT) working alongside Boeing aimed to mitigate technical and integration risks through rigorous testing and iterative design. The emphasis on 'minimum life cycle cost' suggests an effort to mitigate long-term operational expenses. However, the inherent complexity and novelty of the Ares I program presented significant programmatic risks that ultimately contributed to its cancellation.

What was the intended effectiveness of the Ares I upper stage, and how did this contract contribute to that?

The intended effectiveness of the Ares I upper stage, as described, was to serve as the second stage of the Ares I launch vehicle, providing crucial functions during ascent. This included roll control during the first stage burn and separation, and critically, handling guidance, navigation, and command/data management throughout the ascent phase. This contract's contribution was direct and foundational: it funded the design, development, testing, and manufacturing of this essential component. By ensuring the upper stage met its performance specifications, the contract was integral to the overall mission success of Ares I, which was intended to be NASA's next-generation human-rated launch system for missions beyond low Earth orbit.

How did historical spending on similar space vehicle development contracts inform the budgeting for this contract?

Historical spending on similar space vehicle development contracts, such as those for the Space Shuttle program or earlier Apollo missions, would have provided valuable, albeit complex, benchmarks for budgeting the Ares I upper stage. NASA likely drew upon lessons learned regarding development timelines, cost estimation for novel technologies, manufacturing complexities, and the cost of rigorous testing and safety protocols. However, the Ares I was envisioned as a new architecture, distinct from the Shuttle, aiming for different performance characteristics and potentially lower life-cycle costs. Therefore, while historical data offered a foundational understanding of the challenges and costs involved in large-scale space vehicle development, specific budgeting would have required detailed projections based on the unique design, materials, and manufacturing processes planned for the Ares I upper stage.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: NNM07181505R

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 499 BOEING BLVD SW, HUNTSVILLE, AL, 35824

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,703,806,623

Exercised Options: $10,695,319,467

Current Obligation: $10,462,406,426

Actual Outlays: $4,343,018,562

Subaward Activity

Number of Subawards: 59

Total Subaward Amount: $28,369,799

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline