NASA Orion Abort Test Booster contract awarded to Orbital Sciences LLC for over $27.5 million

Contract Overview

Contract Amount: $27,540,337 ($27.5M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2007-04-05

End Date: 2014-03-31

Contract Duration: 2,552 days

Daily Burn Rate: $10.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: AWARD NASA ORION ABORT TEST BOOSTER (ATB) DELIVERY ORDER

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85248

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $27.5 million to ORBITAL SCIENCES LLC for work described as: AWARD NASA ORION ABORT TEST BOOSTER (ATB) DELIVERY ORDER Key points: 1. The contract value appears reasonable for a specialized component in a complex space program. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration is substantial, indicating a long-term need for the booster. 4. The cost-plus incentive fee structure aims to align contractor performance with government objectives. 5. The award falls within the Guided Missile and Space Vehicle Manufacturing sector. 6. The geographic location of the contractor is Arizona.

Value Assessment

Rating: good

The award amount of $27.5 million for the Orion Abort Test Booster (ATB) delivery order seems within a reasonable range for a highly specialized aerospace component. Benchmarking against similar complex missile and space vehicle manufacturing contracts would provide a more precise value-for-money assessment. The Cost Plus Incentive Fee (CPIF) pricing structure suggests an effort to control costs while incentivizing performance, which is a common and generally effective approach for development-heavy projects where exact costs are difficult to predict.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderate level of competition for this specialized requirement. While two bidders are better than one, a higher number of bidders could potentially lead to more aggressive pricing and a wider range of technical solutions.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a more competitive environment, which can drive down costs and improve the quality of goods and services received.

Public Impact

This contract directly supports NASA's Orion spacecraft program, a critical component of the nation's human spaceflight capabilities. The Orion Abort Test Booster is essential for ensuring the safety of astronauts during launch. The successful development and testing of this booster contribute to the advancement of space exploration technology. The contract supports jobs within the aerospace manufacturing sector, specifically in Arizona.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if not closely managed.
Reliance on a single contractor for a critical component could pose supply chain risks.
The long contract duration may require ongoing vigilance to ensure continued cost-effectiveness.

Positive Signals

Awarded through full and open competition, indicating a structured procurement process.
The use of an incentive fee structure encourages contractor performance and efficiency.
The contractor, Orbital Sciences LLC, has experience in aerospace manufacturing.
The contract supports a high-priority national program (NASA's Orion).

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized segment of the aerospace industry. This sector is characterized by high research and development costs, stringent quality control requirements, and significant government investment. The market is typically dominated by a few large, experienced contractors due to the technical expertise and infrastructure required. Spending in this sector is driven by national defense and space exploration priorities.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Given the specialized nature of guided missile and space vehicle manufacturing, it is likely that the prime contractor relies on a supply chain of other specialized firms, which may include small businesses for specific components or services. However, without explicit set-aside or subcontracting plans, the direct impact on the small business ecosystem is not clearly defined.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. The Cost Plus Incentive Fee structure necessitates close monitoring of costs and performance against established targets. Transparency is generally maintained through contract reporting requirements, though specific public access to detailed performance data may be limited.

Related Government Programs

NASA Orion Program
Space Launch System (SLS)
Human Spaceflight Programs
Aerospace Manufacturing Contracts
Guided Missile Manufacturing

Risk Flags

Cost Overrun Potential
Long-Term Performance Monitoring Required
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to ORBITAL SCIENCES LLC. AWARD NASA ORION ABORT TEST BOOSTER (ATB) DELIVERY ORDER

Who is the contractor on this award?

The obligated recipient is ORBITAL SCIENCES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $27.5 million.

What is the period of performance?

Start: 2007-04-05. End: 2014-03-31.

What is the track record of Orbital Sciences LLC in delivering complex aerospace components for NASA or DoD programs?

Orbital Sciences LLC, now part of Northrop Grumman, has a significant track record in aerospace and defense. Prior to its acquisition, the company was involved in numerous projects, including the development and launch of various satellites, rockets (like the Minotaur family), and components for space exploration. They were a key player in NASA's Commercial Orbital Transportation Services (COTS) program. Their experience with complex systems, including propulsion and structural components, suggests a capability to handle the demands of the Orion Abort Test Booster. However, like many large aerospace contractors, they have also faced challenges and scrutiny on specific programs regarding cost and schedule.

How does the $27.5 million award compare to similar contracts for abort test boosters or related space vehicle components?

Direct comparisons for specialized components like an abort test booster are challenging without access to proprietary contract databases and specific technical requirements. However, the $27.5 million figure for a delivery order over a multi-year period (2007-2014) appears to be within the expected range for such a critical and technologically advanced piece of hardware. Development and testing of space vehicle safety systems are inherently expensive due to the rigorous engineering, materials science, and testing protocols involved. Broader contracts for entire launch vehicles or spacecraft systems would naturally be in the hundreds of millions or billions, making this award seem proportionate for a specific, albeit crucial, sub-system.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for this type of project?

The primary risks with a CPIF contract for a project like the Orion Abort Test Booster revolve around cost control and defining appropriate incentive targets. While CPIF aims to incentivize efficiency, there's a risk that the government may end up paying more than anticipated if the contractor is highly efficient but the base cost is underestimated, or if the incentive targets are not challenging enough. Conversely, poorly defined targets can lead to disputes or a lack of meaningful incentive. Effective oversight is crucial to ensure the contractor is managing costs diligently and that the incentives truly drive desired outcomes without excessive profit margins for the contractor.

How effective is the 'full and open competition' approach for procuring highly specialized aerospace components like this booster?

Full and open competition is generally the preferred method for maximizing value and innovation. For highly specialized components, its effectiveness depends on the number of capable sources. In this case, two bidders suggest a limited but present competition. While it ensures a baseline level of fairness and broad market access, the niche nature of space vehicle manufacturing means the pool of qualified bidders might be small. The key is whether the competition process adequately incentivized the bidders to offer their best technical solutions and pricing, which is often difficult to ascertain solely from the award data.

What is the historical spending trend for Guided Missile and Space Vehicle Manufacturing contracts by NASA and DoD?

Historical spending in the Guided Missile and Space Vehicle Manufacturing sector by NASA and the DoD has been substantial and generally increasing, driven by national security imperatives and ambitious space exploration goals. The DoD is the largest spender in this category, funding a wide array of missile defense systems, strategic deterrents, and tactical munitions. NASA's spending focuses on human spaceflight vehicles, scientific probes, and launch infrastructure. Both agencies invest heavily in research, development, testing, and production. Trends are influenced by geopolitical factors, technological advancements, and budget allocations, often showing significant year-over-year fluctuations based on program lifecycles and new initiatives.

What are the potential performance implications of the long contract duration (2552 days)?

A long contract duration, such as the 2552 days (approximately 7 years) for this delivery order, implies a sustained need for the Orion Abort Test Booster, likely encompassing development, testing, and potentially initial operational phases. This extended timeline allows for iterative development and refinement, which is beneficial for complex systems where unforeseen technical challenges are common. However, it also increases the risk of technological obsolescence, potential shifts in program requirements, and the need for sustained government oversight to manage costs and ensure the contractor remains focused and efficient over the long haul. It also provides a stable base for the contractor's planning and resource allocation.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 3380 SOUTH PRICE ROAD, CHANDLER, AZ, 85248

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $80,315,600

Exercised Options: $58,554,054

Current Obligation: $27,540,337

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F0470100D0207

IDV Type: IDC

Timeline