NASA Awards $3.21 Billion for RS-25 Engine Production Restart and SLS Support
Contract Overview
Contract Amount: $3,210,618,882 ($3.2B)
Contractor: Aerojet Rocketdyne of DE, Inc
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2015-11-01
End Date: 2029-09-30
Contract Duration: 5,082 days
Daily Burn Rate: $631.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: IGF::CT::IGF RS-25 PRODUCTION RESTART TO BE UNDERTAKEN BY THE CONTRACTOR IN SUPPORT OF PROVIDING SIX RS-25 ENGINES MODIFIED AS NECESSARY FOR THE TECHNICAL REQUIREMENTS UNDER THE SPACE LAUNCH SYSTEM, RECERTIFICATION OF PRODUCTION, IMPROVEMENTS IN MANUFACTURING, AND CERTIFICATION FOR FLIGHT PROGRAM.
Place of Performance
Location: CANOGA PARK, LOS ANGELES County, CALIFORNIA, 91304
Plain-Language Summary
National Aeronautics and Space Administration obligated $3.21 billion to AEROJET ROCKETDYNE OF DE, INC for work described as: IGF::CT::IGF RS-25 PRODUCTION RESTART TO BE UNDERTAKEN BY THE CONTRACTOR IN SUPPORT OF PROVIDING SIX RS-25 ENGINES MODIFIED AS NECESSARY FOR THE TECHNICAL REQUIREMENTS UNDER THE SPACE LAUNCH SYSTEM, RECERTIFICATION OF PRODUCTION, IMPROVEMENTS IN MANUFACTURING, AND CERTIFICATION … Key points: 1. Significant investment in critical space launch engine technology. 2. Sole-source award raises questions about competition and price. 3. Long-term contract (5082 days) indicates sustained program needs. 4. Focus on R&D and manufacturing improvements for future missions.
Value Assessment
Rating: questionable
The contract value of $3.21 billion for RS-25 engines is substantial. Without comparable contracts or detailed cost breakdowns, assessing its value relative to similar engine production or modification efforts is difficult. The cost-plus award fee structure allows for flexibility but can also lead to higher costs if not managed tightly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Aerojet Rocketdyne. This limits price discovery and potentially reduces the incentive for the contractor to offer the most competitive pricing. The justification for sole-source procurement needs to be robust.
Taxpayer Impact: Taxpayer funds are committed to a sole-source contract for critical space hardware, necessitating close oversight to ensure fair pricing and efficient use of resources.
Public Impact
Ensures continued development and production of essential engines for the Space Launch System (SLS). Supports advancements in manufacturing and certification for future space exploration. Potential for job creation and technological innovation within the aerospace sector. Long-term commitment to a key component of NASA's deep space exploration goals.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost-plus contract type can lead to cost overruns.
- Long contract duration increases risk exposure.
- Lack of small business participation noted.
Positive Signals
- Supports critical national space program.
- Focus on technological improvement and innovation.
- Ensures availability of essential hardware.
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Spending in this sector is often characterized by high costs, long development cycles, and significant technological risk. Benchmarks are difficult due to the unique nature of space hardware.
Small Business Impact
The data indicates that small business participation is not a factor in this contract (sb: false). This suggests that the prime contractor is a large entity, and there is no explicit requirement or mechanism for subcontracting to small businesses within this award.
Oversight & Accountability
The contract is managed by NASA, the agency procuring the services. Oversight will be critical given the sole-source nature and cost-plus award fee structure to ensure accountability and prevent cost overruns. Regular performance reviews and audits will be essential.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- National Aeronautics and Space Administration Contracting
- National Aeronautics and Space Administration Programs
Risk Flags
- Sole-source procurement limits competitive pricing.
- Cost-plus contract type carries inherent risk of cost overruns.
- Long contract duration increases exposure to changing requirements and economic factors.
- No explicit small business participation noted.
- Reliance on a single contractor for critical components.
Tags
research-and-development-in-the-physical, national-aeronautics-and-space-administr, ca, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $3.21 billion to AEROJET ROCKETDYNE OF DE, INC. IGF::CT::IGF RS-25 PRODUCTION RESTART TO BE UNDERTAKEN BY THE CONTRACTOR IN SUPPORT OF PROVIDING SIX RS-25 ENGINES MODIFIED AS NECESSARY FOR THE TECHNICAL REQUIREMENTS UNDER THE SPACE LAUNCH SYSTEM, RECERTIFICATION OF PRODUCTION, IMPROVEMENTS IN MANUFACTURING, AND CERTIFICATION FOR FLIGHT PROGRAM.
Who is the contractor on this award?
The obligated recipient is AEROJET ROCKETDYNE OF DE, INC.
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 $3.21 billion.
What is the period of performance?
Start: 2015-11-01. End: 2029-09-30.
What is the specific justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or the lack of viable alternative sources. NASA would need to provide documentation detailing why Aerojet Rocketdyne is the only capable provider. To ensure fair pricing, NASA would likely conduct a thorough cost and price analysis, potentially involving independent cost estimates and negotiation of profit margins based on risk and performance.
How will NASA mitigate the risks associated with a cost-plus award fee contract, particularly concerning potential cost overruns and ensuring contractor efficiency?
NASA will mitigate risks through robust contract administration, including detailed performance metrics, regular progress reviews, and stringent oversight of expenditures. The 'award fee' component incentivizes performance against defined objectives, but NASA must carefully establish these criteria and monitor progress to ensure the contractor remains focused on cost control and timely delivery while achieving technical goals.
What is the long-term strategy for RS-25 engine sustainment and potential future competition once the current contract expires, considering the sole-source nature of this award?
NASA's long-term strategy should involve planning for potential future competition by fostering an environment where other qualified entities could develop capabilities, if feasible. This might include technology transfer initiatives or breaking down future requirements into smaller, more competitive packages. However, given the specialized nature of these engines, ensuring a competitive landscape may be challenging.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › Community and Regional Development R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: NNM15AA06R
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3harris Technologies, Inc
Address: 8900 DESOTO AVE, CANOGA PARK, CA, 91304
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,777,506,556
Exercised Options: $3,777,506,556
Current Obligation: $3,210,618,882
Actual Outlays: $2,286,835,210
Subaward Activity
Number of Subawards: 847
Total Subaward Amount: $650,042,030
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-11-01
Current End Date: 2029-09-30
Potential End Date: 2029-09-30 00:00:00
Last Modified: 2026-03-31
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