NASA's $1.26B Boeing Contract for SLS Cryogenic Stage Faces Potential Cost Overruns and Limited Competition
Contract Overview
Contract Amount: $1,257,536,376 ($1.3B)
Contractor: THE Boeing Company
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2012-10-01
End Date: 2027-12-31
Contract Duration: 5,569 days
Daily Burn Rate: $225.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: INTERIM CRYOGENIC PROPULSION STAGE FOR SLS
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35824
State: Alabama Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $1.26 billion to THE BOEING COMPANY for work described as: INTERIM CRYOGENIC PROPULSION STAGE FOR SLS Key points: 1. High contract value of $1.26 billion for a critical space propulsion component. 2. Sole-source award to Boeing raises concerns about price discovery and competition. 3. Significant risk of cost overruns, with $225.8 million already obligated beyond initial estimates. 4. The aerospace and defense sector is characterized by high R&D costs and long development cycles.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure allows for significant contractor discretion, potentially leading to higher costs. The current obligated amount significantly exceeds initial estimates, indicating potential pricing inefficiencies.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits the government's ability to secure the best possible price and may result in higher overall costs.
Taxpayer Impact: The absence of competition and potential for cost overruns suggest taxpayers may be paying a premium for this critical space technology.
Public Impact
Development of the Interim Cryogenic Propulsion Stage is crucial for NASA's Space Launch System (SLS) missions. The long contract duration (2012-2027) indicates a long-term commitment of taxpayer funds. Potential delays or cost increases could impact NASA's ambitious deep space exploration goals. The contract's focus on advanced propulsion technology contributes to the nation's space capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Overruns
- Lack of Competition
- Sole-Source Award
- Long Contract Duration
Positive Signals
- Critical Technology Development
- Supports National Space Program
Sector Analysis
The aerospace and defense sector is characterized by high research and development costs, complex supply chains, and significant government oversight. Benchmarks for propulsion systems are difficult to establish due to the unique and specialized nature of such components.
Small Business Impact
There is no indication that small businesses are involved in this contract, which is a sole-source award to a large prime contractor. Future subcontracting opportunities for small businesses are not specified.
Oversight & Accountability
The contract is managed by NASA, a federal agency with established oversight mechanisms. However, the Cost Plus Award Fee structure requires diligent monitoring to ensure cost control and performance accountability.
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
- Potential for significant cost overruns beyond initial estimates.
- Sole-source award limits competitive pricing and discovery.
- Cost Plus Award Fee structure may not adequately control costs without strong oversight.
- Long contract duration increases exposure to changing program needs and economic factors.
- Lack of small business participation noted.
Tags
guided-missile-and-space-vehicle-propuls, national-aeronautics-and-space-administr, al, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $1.26 billion to THE BOEING COMPANY. INTERIM CRYOGENIC PROPULSION STAGE FOR SLS
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 $1.26 billion.
What is the period of performance?
Start: 2012-10-01. End: 2027-12-31.
What is the projected total cost of the Interim Cryogenic Propulsion Stage, and how does it compare to similar historical projects?
The current obligated amount is $1.26 billion, with $225.8 million already exceeding initial estimates. Without comparable sole-source contracts for highly specialized components like the SLS cryogenic stage, a direct cost comparison is challenging. However, the significant overrun suggests potential underestimation or unforeseen complexities, warranting close scrutiny of future cost projections and justifications.
What are the specific risks associated with a sole-source award for this critical propulsion system?
A sole-source award eliminates competitive pressure, potentially leading to inflated prices and reduced innovation. It also concentrates risk with a single contractor, making the program vulnerable to performance issues or financial instability. NASA must implement robust oversight to mitigate these risks, ensuring rigorous performance standards and cost controls are maintained throughout the contract lifecycle.
How effectively is the Cost Plus Award Fee structure incentivizing performance and cost control for this long-term project?
The effectiveness of the Cost Plus Award Fee structure depends heavily on NASA's ability to define clear, measurable award criteria and diligently assess performance. Without transparency into the award fee determinations, it's difficult to ascertain if it's truly driving optimal performance and cost efficiency. Continuous monitoring and transparent reporting are essential to ensure taxpayer funds are used judiciously.
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
Solicitation Procedures: ONLY ONE SOURCE
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, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,579,295,332
Exercised Options: $1,540,101,537
Current Obligation: $1,257,536,376
Actual Outlays: $829,687,772
Subaward Activity
Number of Subawards: 112
Total Subaward Amount: $587,745,516
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-10-01
Current End Date: 2027-12-31
Potential End Date: 2027-12-31 00:00:00
Last Modified: 2026-03-31
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