Aerospace FFRDC contract awarded to The Aerospace Corporation for $4.04 billion over 10 years

Contract Overview

Contract Amount: $4,043,328,098 ($4.0B)

Contractor: THE Aerospace Corporation

Awarding Agency: Department of Defense

Start Date: 2008-10-31

End Date: 2018-09-30

Contract Duration: 3,621 days

Daily Burn Rate: $1.1M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: AEROSPACE FFRDC CONTRACT

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $4.04 billion to THE AEROSPACE CORPORATION for work described as: AEROSPACE FFRDC CONTRACT Key points: 1. Contract awarded to a Federally Funded Research and Development Center (FFRDC) with a sole-source designation. 2. Significant long-term investment in research and development, indicating a strategic focus. 3. The contract spans a decade, suggesting a need for sustained, specialized support. 4. Cost-plus-fixed-fee structure may incentivize cost control while ensuring contractor availability. 5. The large dollar value points to a critical and extensive scope of work. 6. Performance period extends over a decade, implying a stable and ongoing requirement.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its unique nature as an FFRDC award. FFRDCs are established to provide long-term, objective advice and analysis to the government, often in areas where private sector capabilities are insufficient or inappropriate. The cost-plus-fixed-fee (CPFF) structure, while common for R&D, can lead to cost overruns if not managed carefully. Without detailed breakdowns of the work performed and the specific objectives met, a direct comparison to commercial R&D services is difficult. The sheer scale of the award suggests a high level of criticality and complexity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, which is typical for FFRDCs. FFRDCs are established by the government to meet specific long-term national needs and are generally restricted to a single contractor for each FFRDC. This approach ensures continuity and deep institutional knowledge. However, the lack of competition means there is no direct price discovery through a bidding process, and the government relies on negotiation and oversight to ensure fair pricing.

Taxpayer Impact: Sole-source awards for FFRDCs mean taxpayers are not benefiting from competitive bidding, but are instead investing in a specialized, long-term capability deemed essential by the government.

Public Impact

The primary beneficiaries are the Department of Defense and the Air Force, receiving specialized research and development support. Services delivered include objective analysis, research, and systems engineering critical for national security. The geographic impact is primarily national, supporting federal research initiatives. Workforce implications include the sustained employment of highly skilled scientists and engineers within the FFRDC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competitive pressure on pricing.
Cost-plus-fixed-fee contracts can sometimes lead to higher costs if not rigorously managed.
Long duration may mask inefficiencies if performance metrics are not strictly enforced.

Positive Signals

FFRDC designation ensures objective, long-term research capabilities.
Sole-source award provides stability and continuity for critical R&D.
Fixed fee component provides some cost certainty for the government.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. FFRDCs like The Aerospace Corporation play a unique role in this sector by providing objective, independent research and analysis to government sponsors, often in areas of national security and advanced technology. The market for specialized R&D services is substantial, but FFRDCs operate in a distinct niche, serving as a trusted advisor rather than a commercial vendor. Comparable spending benchmarks are difficult to establish due to the specialized nature of FFRDC work.

Small Business Impact

This contract does not appear to involve small business set-asides, as it is a sole-source award to a large FFRDC. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in the provided data. The primary impact is on the FFRDC ecosystem itself, rather than the broader small business contracting landscape.

Oversight & Accountability

Oversight for FFRDC contracts is typically robust, involving regular reviews of performance, costs, and adherence to the FFRDC's charter. The Department of the Air Force, as the contracting agency, is responsible for monitoring the contractor's performance and ensuring the work aligns with government objectives. Transparency is generally maintained through reporting requirements, though the proprietary nature of some R&D may limit public disclosure. Inspector General jurisdiction would apply to ensure the integrity of the contracting process and prevent fraud.

Related Government Programs

Aerospace Research and Development
National Security Research
Systems Engineering Support
Federally Funded Research and Development Centers (FFRDCs)

Risk Flags

Sole-source award
Cost-plus-fixed-fee structure
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.04 billion to THE AEROSPACE CORPORATION. AEROSPACE FFRDC CONTRACT

Who is the contractor on this award?

The obligated recipient is THE AEROSPACE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $4.04 billion.

What is the period of performance?

Start: 2008-10-31. End: 2018-09-30.

What is the specific scope of work covered by this $4.04 billion Aerospace FFRDC contract?

The provided data indicates this is a Research and Development in the Physical, Engineering, and Life Sciences contract, designated for an FFRDC. While the exact scope is not detailed, FFRDCs like The Aerospace Corporation typically provide objective, independent research, analysis, and systems engineering support to government sponsors. This often includes areas such as space systems, missile defense, advanced materials, and cybersecurity, all crucial for national security. The substantial funding over a decade suggests a broad and deep engagement across multiple critical technology domains for the Department of Defense and the Air Force.

How does the cost-plus-fixed-fee (CPFF) contract structure influence cost control and contractor incentives for this FFRDC award?

The Cost-Plus-Fixed-Fee (CPFF) structure means the contractor, The Aerospace Corporation, is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. This structure is common for R&D where the final costs are uncertain. For cost control, the government relies on rigorous auditing of incurred costs and strong program management to ensure efficiency. The fixed fee provides an incentive for the contractor to manage costs effectively, as exceeding the estimated cost does not increase their fee, but it also means the contractor has less incentive to find significant cost savings if it doesn't directly benefit them beyond the fee. The government's oversight is critical to ensure value for money.

What are the implications of awarding this contract on a sole-source basis to The Aerospace Corporation?

Awarding this contract on a sole-source basis to The Aerospace Corporation is standard practice for FFRDCs. FFRDCs are established to provide unique, long-term capabilities and objective advice that cannot be readily obtained from the commercial sector. This ensures continuity of expertise and institutional knowledge. However, the lack of competition means the government does not benefit from the price discovery that occurs in a competitive bidding process. Instead, the government must rely on negotiation, benchmarking against similar FFRDC agreements, and strong oversight to ensure the pricing is fair and reasonable for the services rendered.

What is the historical spending pattern for The Aerospace Corporation with the Department of Defense, and how does this contract compare?

The provided data shows this specific contract awarded in 2008 with an end date in 2018, totaling approximately $4.04 billion. This indicates a significant, long-term investment. To assess historical patterns, one would need to examine prior contracts awarded to The Aerospace Corporation by the DoD. Given its FFRDC status, it's likely that The Aerospace Corporation has held numerous contracts with the DoD over many years, often on a sole-source basis, to fulfill its mission. This $4.04 billion award represents a substantial portion of annual spending, reflecting its critical role in supporting DoD's research and development needs over that decade.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of this FFRDC contract?

Specific KPIs for this contract are not detailed in the provided data. However, for FFRDC contracts, success is typically measured against the achievement of specific research objectives, the quality and objectivity of analysis provided, the successful development or maturation of technologies, and the timely delivery of expert advice. Performance is often assessed through regular technical reviews, milestone achievements, and the overall impact of the FFRDC's contributions on program decisions and national security outcomes. The government contracting officer and technical monitors play a crucial role in defining and tracking these metrics throughout the contract's duration.

What is the risk profile associated with a decade-long, sole-source FFRDC contract of this magnitude?

The primary risks associated with a decade-long, sole-source FFRDC contract of this magnitude include potential cost growth if not managed tightly under the CPFF structure, the risk of contractor complacency due to the lack of competition, and the possibility of misalignment between evolving government needs and the FFRDC's capabilities over such a long period. There's also a risk that the government becomes overly reliant on a single entity. Mitigating these risks requires robust government oversight, clear performance expectations, regular reviews, and proactive engagement to ensure the FFRDC remains agile and responsive to the government's strategic objectives.

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 › 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: 2350 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $4,362,651,400

Exercised Options: $4,048,368,105

Current Obligation: $4,043,328,098

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline