DoD's $538M contract for missile and space systems manufacturing awarded to United Launch Services, LLC

Contract Overview

Contract Amount: $538,145,642 ($538.1M)

Contractor: United Launch Services, LLC

Awarding Agency: Department of Defense

Start Date: 1999-11-12

End Date: 2012-12-31

Contract Duration: 4,798 days

Daily Burn Rate: $112.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200004!5700!000001!GZ74 !SMC/PKV2 !F0470193C0004 !A!*!P00137 !19991112!20010715!008384588!006265946!009256819!N!18355!MCDONNELL DOUGLAS CORP. !5301 BOLSA !HUNTINGTON BEA !CA!92647!36000!059!06!HUNTINGTON BEACH !ORANGE !CALIFORNIA!0001!+000001600000!N!N!000000000000!AR34!RDTE/SPACE FLIGHT - DEMO/VALID !A2 !MISSILE AND SPACE SYSTEMS !3000!NOT DISCERNABLE OR CLASSIFIED !3671!3!A!S!C!B!A!*!A !N!K!2!003!B!* !A!N!Z!* !* !N!C!*!A!Z!A!A!A!A!* !*!N!A!D!N!*!*!*!*!*!

Place of Performance

Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $538.1 million to UNITED LAUNCH SERVICES, LLC for work described as: 200004!5700!000001!GZ74 !SMC/PKV2 !F0470193C0004 !A!*!P00137 !19991112!20010715!008384588!006265946!009256819!N!18355!MCDONNELL DOUGLAS CORP. !5301 BOLSA !HUNTINGTON BEA !CA!92647!36000!059!06!HUNTINGTON BEACH !ORA… Key points: 1. The contract value of over half a billion dollars represents a significant investment in advanced defense capabilities. 2. Awarded through full and open competition, suggesting a robust market for these specialized services. 3. The long duration of the contract (over 13 years) indicates a need for sustained, long-term support. 4. The 'Guided Missile and Space Vehicle Manufacturing' classification points to a critical role in national security. 5. The contractor, United Launch Services, LLC, is a key player in the aerospace and defense sector. 6. The contract's focus on R&D and space flight suggests innovation and future-oriented defense strategies.

Value Assessment

Rating: good

The contract value of $538,145,642.26 for guided missile and space vehicle manufacturing appears substantial, reflecting the complexity and criticality of the services. Benchmarking this against similar large-scale defense manufacturing contracts is challenging without more specific service details. However, the firm fixed-price nature suggests that the government has negotiated a set price, which can offer cost certainty if the contractor manages their expenses effectively. The long performance period of over 13 years implies a need for sustained production and development.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable contractors had the opportunity to bid. The presence of multiple bidders typically fosters a competitive environment, which can lead to more favorable pricing and better terms for the government. The specific number of bidders (3) is a moderate level of competition for such a large and specialized contract, suggesting a specialized market but still allowing for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces. It ensures that the government is not locked into a single provider, promoting efficiency and potentially leading to better value for the allocated funds.

Public Impact

The primary beneficiaries are the Department of Defense and national security, receiving advanced missile and space vehicle manufacturing capabilities. Services delivered include the manufacturing of guided missiles and space vehicles, crucial for defense and space exploration missions. The geographic impact is likely concentrated around the contractor's facilities in Colorado, with potential ripple effects in the aerospace supply chain. Workforce implications include employment for highly skilled engineers, technicians, and manufacturing personnel within the aerospace and defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to complacency or reduced urgency if not actively managed.
Reliance on a single prime contractor for such critical components carries inherent supply chain risks.
The specialized nature of the work might limit the pool of future contractors, potentially reducing competition on subsequent awards.

Positive Signals

Awarded through full and open competition, indicating a competitive process that should yield good value.
Firm Fixed Price contract type provides cost certainty for the government.
The contractor's involvement in missile and space vehicle manufacturing suggests a high level of technical expertise and capability.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized and critical segment of the aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality and performance requirements. The market size is substantial, driven by national security needs and space exploration initiatives. Comparable spending benchmarks would involve other large-scale defense manufacturing contracts for complex weapon systems or space-related hardware, often running into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss: false'. The prime contractor, United Launch Services, LLC, is likely a large business. While there are no explicit subcontracting goals mentioned in the provided data, large defense contracts often include provisions for small business participation. The impact on the small business ecosystem would depend on whether the prime contractor actively seeks out and utilizes small business subcontractors for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is generally limited for defense contracts of this nature due to national security considerations, but contract awards and basic details are often publicly available through systems like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Manufacturing
Space Vehicle Development
Aerospace Engineering Services
Defense Procurement
Advanced Weapons Systems

Risk Flags

Long contract duration may increase risk of obsolescence or changing requirements.
Specialized nature of manufacturing could lead to limited competition on future procurements.
Supply chain dependencies for critical components could pose a risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $538.1 million to UNITED LAUNCH SERVICES, LLC. 200004!5700!000001!GZ74 !SMC/PKV2 !F0470193C0004 !A!*!P00137 !19991112!20010715!008384588!006265946!009256819!N!18355!MCDONNELL DOUGLAS CORP. !5301 BOLSA !HUNTINGTON BEA !CA!92647!36000!059!06!HUNTINGTON BEACH !ORANGE !CALIFORNIA!0001!+000001600000!N!N!000000000000!AR34!RDTE/SPACE FLIGHT - DEMO/VALID !A2 !MISSILE AND SPACE SYSTEMS !3000!NOT DISCERNABLE OR CLASSIFIED !3671!3!A!S!C!B!A!*!A !N!K!

Who is the contractor on this award?

The obligated recipient is UNITED LAUNCH SERVICES, 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 $538.1 million.

What is the period of performance?

Start: 1999-11-12. End: 2012-12-31.

What is the track record of United Launch Services, LLC in delivering similar missile and space vehicle manufacturing contracts?

United Launch Services, LLC (ULS) has a significant history in launch services and related aerospace manufacturing. While the provided data focuses on a single large contract, ULS has been a key provider of launch vehicles for the U.S. government, including NASA and the Department of Defense. Their experience spans decades, often involving complex integration and manufacturing processes for critical space and defense payloads. Assessing their track record specifically for 'Guided Missile and Space Vehicle Manufacturing' beyond launch services would require a deeper dive into their project portfolio and performance history on contracts directly related to missile production and space vehicle assembly, rather than solely launch operations. However, their established presence in the high-stakes aerospace sector suggests a baseline capability for handling demanding manufacturing requirements.

How does the per-unit cost of the manufactured items under this contract compare to industry benchmarks?

Determining a precise per-unit cost benchmark for this contract is not feasible with the provided data. The contract value of $538 million covers a broad scope of 'Guided Missile and Space Vehicle Manufacturing' over a long period, likely encompassing research, development, testing, and production of multiple, potentially diverse, units. Without knowing the exact number and types of missiles and space vehicles produced, or the specific technological complexity of each, a direct per-unit cost comparison to industry standards is impossible. Such specialized defense articles often have highly variable costs based on technological sophistication, production volume, and specific mission requirements, making direct benchmarking challenging without granular cost data.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks for this contract include technological obsolescence, supply chain disruptions for specialized components, potential cost overruns (despite the FFP structure, scope creep or unforeseen technical challenges can arise), and performance failures in critical systems. Mitigation strategies likely involve robust program management by the DCMA, stringent quality assurance and testing protocols, diversification of the supply chain where possible, and clear contractual clauses addressing performance and delivery. The long duration also presents a risk of shifting geopolitical or technological landscapes that could render the manufactured items less relevant, necessitating adaptive program management.

How effective has the 'full and open competition' process been in ensuring value for money on this specific contract?

The 'full and open competition' award for this $538 million contract suggests that the process was effective in attracting multiple bidders (three in this case) for a specialized requirement. This level of competition generally promotes price discovery and encourages bidders to offer competitive terms. The firm fixed-price nature of the contract further enhances the likelihood of value for money, as the contractor bears the primary risk of cost overruns. However, the true measure of value for money would depend on the long-term performance, reliability, and strategic utility of the delivered missiles and space vehicles, which are difficult to assess solely from contract award data. The sustained performance over the contract's 13-year duration will be the ultimate test.

What is the historical spending trend for guided missile and space vehicle manufacturing within the Department of Defense?

Historical spending on guided missile and space vehicle manufacturing within the Department of Defense has consistently been substantial, reflecting the critical role these systems play in national security and strategic deterrence. Annual budgets allocated to this sector often run into the tens of billions of dollars, encompassing research, development, procurement, and sustainment of a wide array of platforms. Spending fluctuates based on strategic priorities, technological advancements, and perceived threats. Contracts like the one awarded to United Launch Services, LLC, represent significant individual investments within this broader category, contributing to the overall DoD expenditure on advanced weaponry and space capabilities.

Are there any specific performance metrics or key performance indicators (KPIs) associated with this contract that indicate success?

The provided data does not explicitly detail the specific performance metrics or Key Performance Indicators (KPIs) for this contract. However, for contracts involving the manufacturing of guided missiles and space vehicles, typical KPIs would likely include adherence to production schedules, meeting stringent quality and reliability standards (e.g., defect rates, successful test firings/launches), compliance with technical specifications, and cost control within the firm fixed-price framework. The long-term success would also be measured by the operational effectiveness and readiness of the delivered systems in their intended defense or space applications. These metrics are usually detailed in the contract's statement of work and performance requirements documents.

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: United Launch Alliance, L.L.C (UEI: 601307601)

Address: 9501 E PANORAMA CIR, CENTENNIAL, CO, 80112

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,865,472

Exercised Options: $27,423,847

Current Obligation: $538,145,642

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline