Orbital Sciences LLC awarded $32.4M for Minotaur IV launch services, highlighting guided missile and space vehicle manufacturing capabilities

Contract Overview

Contract Amount: $32,396,808 ($32.4M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2007-10-10

End Date: 2010-11-19

Contract Duration: 1,136 days

Daily Burn Rate: $28.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: STP-S26 MINOTAUR IV LAUNCH

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85286

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $32.4 million to ORBITAL SCIENCES LLC for work described as: STP-S26 MINOTAUR IV LAUNCH Key points: 1. Contract value of $32.4 million indicates significant investment in space launch capabilities. 2. Full and open competition suggests a robust market for these specialized services. 3. Fixed Price Incentive contract type aims to balance cost control with performance incentives. 4. The contract duration of 1136 days points to a complex, multi-year project. 5. Awarded by the Department of Defense, this contract supports critical national security space missions. 6. The geographic location of the award in Arizona may indicate specific launch or manufacturing facilities.

Value Assessment

Rating: good

The contract value of $32.4 million for a Minotaur IV launch appears reasonable given the complexity and specialized nature of space vehicle manufacturing and launch services. Benchmarking against similar large-scale defense contracts for space assets suggests this is within expected parameters. The Fixed Price Incentive (FPI) pricing structure, while potentially leading to higher costs if targets are exceeded, also incentivizes the contractor to perform efficiently. Without specific per-unit cost data for launch services, a direct comparison is difficult, but the overall award size reflects the high cost of developing and deploying such advanced technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable contractors had the opportunity to bid. This suggests a healthy competitive environment for guided missile and space vehicle manufacturing. The number of bidders is not specified, but the 'full and open' designation implies that the government sought the best value from a broad range of potential suppliers. This approach generally leads to more competitive pricing and a wider selection of innovative solutions.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it drives down costs through market forces and ensures that the government is not overpaying for essential services. It also promotes innovation by allowing new or smaller companies to compete alongside established players.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical launch services for national security space assets. This contract supports the manufacturing and deployment of guided missiles and space vehicles, essential for defense capabilities. The geographic impact is primarily within Arizona (ST), where the contractor is located, potentially creating or sustaining high-tech jobs. Workforce implications include employment for engineers, technicians, and support staff involved in aerospace manufacturing and launch operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Fixed Price Incentive contracts can lead to cost overruns if performance targets are not met efficiently.
The long duration of the contract (1136 days) increases the risk of schedule delays or scope creep.
Reliance on a single contractor for a critical launch system could pose supply chain risks.

Positive Signals

Awarded under full and open competition, suggesting a competitive market and potential for best value.
The contractor, Orbital Sciences LLC, has a track record in space systems, implying technical expertise.
The use of an incentive contract structure aims to align contractor performance with government objectives.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on guided missile and space vehicle manufacturing. This is a highly specialized and capital-intensive industry characterized by long development cycles, stringent quality requirements, and significant government investment. The market size for space launch services is substantial, driven by both government and commercial demand. This contract represents a portion of the broader defense spending allocated to maintaining and advancing space-based capabilities, which are crucial for intelligence, surveillance, reconnaissance, and communication.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary focus is on large aerospace contractors capable of handling complex space launch systems. While there might be subcontracting opportunities for small businesses within the supply chain, the prime contract itself is not directly aimed at fostering small business participation. The impact on the small business ecosystem would be indirect, depending on Orbital Sciences LLC's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance, quality, and compliance with contract terms. The Fixed Price Incentive structure necessitates close monitoring of cost and performance metrics to ensure the incentive goals are met effectively. Transparency is generally maintained through contract reporting requirements, though specific details of performance and cost may be sensitive due to national security implications. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Space Launch Services
Missile Manufacturing
Satellite Deployment
National Security Space Programs
Aerospace Defense Contracts

Risk Flags

Contract Duration
Fixed Price Incentive Risk
Specialized Technology Dependence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.4 million to ORBITAL SCIENCES LLC. STP-S26 MINOTAUR IV LAUNCH

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 $32.4 million.

What is the period of performance?

Start: 2007-10-10. End: 2010-11-19.

What is Orbital Sciences LLC's track record with similar Department of Defense launch contracts?

Orbital Sciences LLC, prior to its merger with Alliant Techsystems to form Orbital ATK (and later acquisition by Northrop Grumman), had a significant track record in developing and launching space systems for government and commercial clients. They were known for their Pegasus, Taurus, and Minotaur family of rockets. For the Department of Defense, they have historically provided launch services for various payloads, including scientific, reconnaissance, and missile defense-related missions. Their experience with the Minotaur program specifically, which leverages repurposed Minuteman missile stages, demonstrates a capability for cost-effective and reliable launch solutions. This particular contract (STP-S26 MINOTAUR IV LAUNCH) is a testament to their established position in this niche market, building upon previous successes and demonstrating continued trust from the DoD for critical space missions.

How does the $32.4 million award compare to other Minotaur IV launch contracts or similar DoD space launch vehicles?

The $32.4 million award for the Minotaur IV launch appears to be within the expected range for such services, especially considering the complexity and specialized nature of launching payloads for the Department of Defense. Historically, Minotaur launches have been positioned as a cost-effective option, particularly by utilizing repurposed Intercontinental Ballistic Missile (ICBM) stages. However, the exact cost can vary significantly based on the specific payload, launch site, mission requirements, and the inclusion of associated services like integration and testing. Comparing this to other DoD space launch contracts, vehicles like the Atlas V or Delta IV, which are typically used for larger and more complex national security payloads, often have significantly higher price tags, sometimes exceeding $100 million per launch. Therefore, the $32.4 million figure suggests a potentially efficient use of resources for the specific mission profile of the Minotaur IV.

What are the primary risks associated with this specific contract, considering its duration and contract type?

The primary risks associated with this contract stem from its duration (1136 days, over 3 years) and its Fixed Price Incentive (FPI) type. The extended timeline increases the likelihood of encountering unforeseen technical challenges, potential supply chain disruptions for critical components, or shifts in program priorities within the Department of Defense. For the FPI structure, there's a risk that the contractor might not meet the target cost or performance objectives, leading to either increased costs for the government if the incentive targets are adjusted, or potential performance compromises if the contractor struggles to meet them within the incentive framework. Additionally, reliance on a specific launch vehicle like the Minotaur IV could pose a risk if there are issues with the availability of its components or if newer, more capable systems become preferable during the contract's lifecycle.

How effective is the 'Full and Open Competition' strategy in ensuring value for money for DoD space launch services?

The 'Full and Open Competition' strategy is generally considered effective in ensuring value for money for DoD space launch services, as it maximizes the pool of potential bidders and encourages competitive pricing. By allowing any responsible source to submit an offer, the DoD can solicit proposals from a wide range of contractors, including established players and potentially innovative newcomers. This competition drives down prices and incentivizes contractors to offer the best possible technical solutions at the most competitive rates. However, the effectiveness is contingent on the actual number and capability of bidders. If the market for highly specialized services like advanced space launch is limited, even 'full and open' competition might result in only a few viable offers. In such cases, the DoD must still diligently evaluate proposals based on both price and technical merit to ensure true value is achieved, and may need to consider other contracting approaches if competition remains insufficient over time.

What are the historical spending patterns for Minotaur launch vehicles by the Department of Defense?

Historical spending patterns for Minotaur launch vehicles by the Department of Defense show a consistent, albeit relatively niche, utilization. The Minotaur program, particularly the Minotaur IV variant, was developed to provide responsive and cost-effective access to space by leveraging existing, retired Minuteman missile stages. This approach significantly reduces the cost compared to building rockets from scratch. DoD spending on Minotaur launches has been project-specific, often tied to the STP (Space Test Program) or other science and technology initiatives requiring dedicated launch capabilities. While not a high-volume program like some larger launch vehicles, the DoD has consistently allocated funds for Minotaur missions over the years, viewing it as a valuable asset for specific mission needs where its capabilities align with cost and performance requirements. The total spending fluctuates annually based on the number of awarded contracts and their individual values.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 1575 SOUTH PRICE RD, CHANDLER, AZ, 85286

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $53,294,237

Exercised Options: $53,294,237

Current Obligation: $32,396,808

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F0470103D0202

IDV Type: IDC

Timeline