Department of Energy awards $139.5M for Nuclear Nonproliferation SE&I, with Aerospace Corporation as sole source
Contract Overview
Contract Amount: $139,469,580 ($139.5M)
Contractor: THE Aerospace Corporation
Awarding Agency: Department of Energy
Start Date: 2020-01-01
End Date: 2025-05-31
Contract Duration: 1,977 days
Daily Burn Rate: $70.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: SYSTEM ENGINEERING AND INTEGRATION (SE&I) SUPPORT AND INDEPENDENT TECHNICAL AND PROGRAMMATIC ANALYSIS FOR THE OFFICES OF DEFENSE NUCLEAR NONPROLIFERATION AND DEFENSE PROGRAMS
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Energy obligated $139.5 million to THE AEROSPACE CORPORATION for work described as: SYSTEM ENGINEERING AND INTEGRATION (SE&I) SUPPORT AND INDEPENDENT TECHNICAL AND PROGRAMMATIC ANALYSIS FOR THE OFFICES OF DEFENSE NUCLEAR NONPROLIFERATION AND DEFENSE PROGRAMS Key points: 1. The contract focuses on critical nuclear nonproliferation and defense programs, indicating a high-stakes area of national security. 2. A sole-source award to The Aerospace Corporation suggests a lack of readily available alternatives or a long-standing, specialized relationship. 3. The contract's duration of nearly five years (January 2020 - May 2025) points to a sustained need for these specialized services. 4. The cost-plus-fixed-fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can incentivize efficiency but also carries potential for cost overruns. 5. The primary NAICS code (541715) indicates a focus on research and development, aligning with the technical and analytical nature of the services. 6. The contract's value of $139.5 million over its term represents a significant investment in maintaining nuclear security and defense capabilities.
Value Assessment
Rating: fair
The contract's value of $139.5 million over approximately 5 years, averaging around $28 million annually, is substantial for specialized SE&I and analysis. Benchmarking is difficult without more specific service details and comparable sole-source awards. The CPFF structure, while common for R&D, requires careful oversight to ensure cost control and value for money, as it can lead to higher overall costs compared to fixed-price contracts if not managed effectively. The lack of competition inherently limits price discovery and potential savings.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to The Aerospace Corporation. This indicates that the Department of Energy determined that only one source was capable of satisfying the agency's needs. Sole-source awards typically occur when a contractor possesses unique capabilities, proprietary data, or when there is an urgent need that cannot be met through competitive means. The lack of competition means that pricing was not tested against market alternatives, potentially leading to higher costs for the government.
Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. The justification for a sole-source award needs to be robust to ensure public funds are used efficiently.
Public Impact
The primary beneficiaries are the Department of Energy's Offices of Defense Nuclear Nonproliferation and Defense Programs, receiving critical technical and programmatic analysis. The services delivered are essential for ensuring the security and effectiveness of U.S. nuclear deterrence and nonproliferation efforts. The geographic impact is national, supporting federal agencies responsible for nuclear security across the United States. Workforce implications include the continued employment of highly specialized scientists, engineers, and analysts within The Aerospace Corporation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential taxpayer savings.
- Cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not rigorously managed.
- Long contract duration requires sustained oversight to ensure continued value and performance.
- Lack of transparency inherent in sole-source justifications can obscure the rationale for selecting a single contractor.
Positive Signals
- The Aerospace Corporation is a well-established entity with deep expertise in aerospace and defense, likely providing high-quality, specialized support.
- Focus on nuclear nonproliferation and defense programs addresses critical national security needs.
- The contract's long duration suggests a stable and reliable partnership for essential services.
- The CPFF structure, while carrying risks, is appropriate for R&D where scope may evolve.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on engineering and systems integration for defense and national security applications. The market for such specialized, high-security technical analysis is relatively niche, often dominated by a few key players with the necessary clearances and expertise. The Aerospace Corporation is a prominent entity in this space, often serving as a federally funded research and development center (FFRDC). The contract value is significant within this specialized segment, reflecting the complexity and criticality of nuclear nonproliferation and defense programs.
Small Business Impact
This contract does not appear to involve small business set-asides, as indicated by 'sb: false'. The Aerospace Corporation is a large, established organization. There is no explicit information regarding subcontracting plans for small businesses. Given the specialized nature of the work and the sole-source award, the direct impact on the small business ecosystem is likely minimal unless The Aerospace Corporation voluntarily engages small businesses for specific support functions.
Oversight & Accountability
Oversight for this contract would primarily reside within the Department of Energy's contracting and program management offices. As a sole-source award, the justification and terms are critical. The CPFF structure necessitates robust financial oversight to monitor costs and ensure the fixed fee remains appropriate. Transparency may be limited due to the sole-source nature, but internal DOE reviews and potentially Inspector General audits would be the primary accountability mechanisms. The duration of the contract implies ongoing performance reviews.
Related Government Programs
- Department of Energy Nuclear Programs
- Defense Nuclear Nonproliferation Initiatives
- Aerospace Engineering and Systems Integration
- Federally Funded Research and Development Centers (FFRDCs)
- National Security Research and Analysis
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Long contract duration
- Lack of competitive bidding
Tags
research-and-development, department-of-energy, national-security, nuclear-nonproliferation, systems-engineering, sole-source, definitive-contract, cost-plus-fixed-fee, california, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $139.5 million to THE AEROSPACE CORPORATION. SYSTEM ENGINEERING AND INTEGRATION (SE&I) SUPPORT AND INDEPENDENT TECHNICAL AND PROGRAMMATIC ANALYSIS FOR THE OFFICES OF DEFENSE NUCLEAR NONPROLIFERATION AND DEFENSE PROGRAMS
Who is the contractor on this award?
The obligated recipient is THE AEROSPACE CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $139.5 million.
What is the period of performance?
Start: 2020-01-01. End: 2025-05-31.
What is the specific justification for awarding this contract on a sole-source basis to The Aerospace Corporation?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available to meet the government's needs. This could be due to unique capabilities, proprietary technology, specialized expertise, or urgent and compelling circumstances. For a contract of this magnitude and criticality, the justification would likely involve The Aerospace Corporation's established role, deep institutional knowledge, and unique qualifications in supporting the Department of Energy's sensitive nuclear nonproliferation and defense programs. A thorough review of the contract file or agency procurement records would be necessary to ascertain the precise rationale.
How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar R&D services, and what are the implications for value?
Cost-plus-fixed-fee (CPFF) contracts are common for research and development (R&D) and services where the scope of work is not precisely defined at the outset, allowing for flexibility as requirements evolve. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers less price certainty for the government, as costs can fluctuate. However, it can be advantageous when innovation and adaptation are key. For taxpayers, the value depends heavily on effective government oversight to control costs and ensure the fixed fee is reasonable. If not managed diligently, CPFF contracts can result in higher overall expenditures than fixed-price alternatives, but they enable the pursuit of complex, evolving technical objectives.
What is The Aerospace Corporation's track record with the Department of Energy and in similar defense/nonproliferation contracts?
The Aerospace Corporation has a long-standing and significant relationship with the U.S. government, particularly in defense and space systems, often operating as a federally funded research and development center (FFRDC). While specific contract details beyond this award are not provided, their role typically involves providing objective technical advice, systems engineering, and analysis for complex programs. Their extensive experience in areas like nuclear weapons, missile defense, and space systems suggests a strong track record relevant to the Department of Energy's mission. Their FFRDC status implies a commitment to objective analysis and a deep understanding of government needs in critical national security domains.
What are the potential risks associated with the long duration (nearly 5 years) and sole-source nature of this contract?
The primary risks associated with a long-duration, sole-source contract are reduced flexibility, potential for cost escalation, and diminished incentive for innovation or efficiency improvements by the contractor. With a sole-source award, the government lacks the leverage of competition to drive down prices or encourage better performance throughout the contract term. Over a nearly five-year period, market conditions, technological advancements, or agency priorities could shift, making the original contract terms less optimal. The CPFF structure further amplifies the risk of cost growth if not meticulously managed. Continuous government oversight is crucial to mitigate these risks and ensure the contract remains aligned with evolving needs and provides good value.
How does this contract's spending compare to historical spending patterns for similar SE&I or R&D support within the Department of Energy?
Without access to historical spending data for comparable contracts within the Department of Energy (DOE) or for similar Systems Engineering and Integration (SE&I) and R&D support, a direct comparison is challenging. However, the $139.5 million award over approximately five years, averaging around $28 million annually, represents a substantial investment. Given the critical nature of nuclear nonproliferation and defense programs, specialized expertise is required, which often commands higher costs. If The Aerospace Corporation is a primary provider for these functions, this level of spending might be consistent with previous engagements, especially considering inflation and evolving program complexities. A detailed analysis would require benchmarking against prior DOE contracts for similar services, ideally competitively awarded ones, to assess value.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 2310 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245
Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $149,062,595
Exercised Options: $149,062,595
Current Obligation: $139,469,580
Actual Outlays: $123,915,534
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $426,888
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-01-01
Current End Date: 2025-05-31
Potential End Date: 2025-05-31 00:00:00
Last Modified: 2025-04-23
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