DoD's $357M EELV contract with United Launch Services shows fair value despite limited competition
Contract Overview
Contract Amount: $357,364,493 ($357.4M)
Contractor: United Launch Services, LLC
Awarding Agency: Department of Defense
Start Date: 2018-03-14
End Date: 2023-05-31
Contract Duration: 1,904 days
Daily Burn Rate: $187.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: EVOLVED EXPENDABLE LAUNCH VEHICLE AIR FORCE SPACE 8 AND AIR FORCE SPACE 12 LAUNCH SERVICES
Place of Performance
Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $357.4 million to UNITED LAUNCH SERVICES, LLC for work described as: EVOLVED EXPENDABLE LAUNCH VEHICLE AIR FORCE SPACE 8 AND AIR FORCE SPACE 12 LAUNCH SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar launch service agreements. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. Performance risk is moderate, given the critical nature of space launch services. 4. This contract represents a significant portion of the Air Force's expendable launch vehicle spending. 5. The sector is characterized by high barriers to entry and a few dominant players. 6. The firm fixed-price structure offers cost certainty for the government.
Value Assessment
Rating: good
The $357 million awarded over five years for EELV launch services suggests a competitive price point given the specialized nature of the work. Benchmarking against other government launch contracts indicates that the per-unit cost is within an acceptable range, reflecting the high development and operational expenses associated with space missions. While not the absolute lowest cost, the pricing appears to offer good value for the reliable delivery of critical national security assets.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, with two bids received. While two bidders indicate some level of competition, the space launch market is inherently concentrated. The presence of multiple bidders is positive, but the limited number suggests that the market may not be as robust as desired, potentially influencing price negotiation outcomes.
Taxpayer Impact: The full and open competition, even with only two bidders, is beneficial for taxpayers as it ensures that multiple companies had the opportunity to propose their services, driving some level of price competition and preventing a sole-source situation.
Public Impact
The primary beneficiaries are the Department of Defense and the U.S. Space Force, ensuring access to space for national security missions. Services delivered include the launch of critical national security satellites and payloads. The geographic impact is primarily national, with launch operations centered in the U.S. Workforce implications include highly skilled jobs in aerospace engineering, launch operations, and support services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Concentration in the launch services market could lead to future price increases if competition further erodes.
- Reliance on a limited number of providers for critical national security assets poses a strategic risk.
- The high cost of entry and development in this sector limits the pool of potential competitors.
Positive Signals
- The firm fixed-price contract provides cost predictability for the government.
- Full and open competition, even with few bidders, ensures a baseline level of market engagement.
- The contract duration allows for long-term planning and stable access to space capabilities.
Sector Analysis
The Evolved Expendable Launch Vehicle (EELV) program is a critical component of the U.S. space sector, focused on providing reliable and cost-effective access to space for national security payloads. This sector is characterized by extremely high barriers to entry due to technological complexity, stringent safety requirements, and significant capital investment. Spending in this area is substantial, reflecting the strategic importance of space-based assets. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of each launch, but overall government investment in space launch services runs into billions annually.
Small Business Impact
This contract does not appear to have specific small business set-aside provisions. Given the highly specialized and capital-intensive nature of space launch services, the primary contractors are large aerospace corporations. Subcontracting opportunities may exist for smaller firms providing components or specialized services, but the direct award is not focused on small business participation. The impact on the small business ecosystem is likely indirect, through the supply chain rather than direct contract awards.
Oversight & Accountability
Oversight for this contract is managed by the Department of the Air Force, a component of the Department of Defense. Accountability measures are embedded within the contract's performance requirements and delivery schedules. Transparency is facilitated through contract award databases and reporting requirements. The Inspector General of the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- National Security Space Launch (NSSL)
- Space Force Launch Services
- Commercial Satellite Launch Services
- Expendable Launch Vehicle Program
- Defense Space Acquisition Programs
Risk Flags
- Market concentration
- Potential for launch failure
- Reliance on legacy technology
- Long lead times for new launch capabilities
Tags
defense, department-of-defense, department-of-the-air-force, space-launch-services, evolved-expendable-launch-vehicle, definitive-contract, firm-fixed-price, full-and-open-competition, national-security, aerospace, colorado, united-launch-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $357.4 million to UNITED LAUNCH SERVICES, LLC. EVOLVED EXPENDABLE LAUNCH VEHICLE AIR FORCE SPACE 8 AND AIR FORCE SPACE 12 LAUNCH SERVICES
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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $357.4 million.
What is the period of performance?
Start: 2018-03-14. End: 2023-05-31.
What is the track record of United Launch Services in fulfilling government launch contracts?
United Launch Services (ULS), a joint venture between Lockheed Martin and Boeing, has a long and generally successful track record in providing launch services for the U.S. government, particularly through the Evolved Expendable Launch Vehicle (EELV) program. ULS has been responsible for launching numerous critical national security, scientific, and commercial payloads. While the program has experienced some launch failures historically, the overall success rate for ULS missions has been high, demonstrating a capability to meet stringent performance requirements. Their experience provides a level of confidence in their ability to execute complex launch operations, though continuous monitoring of performance metrics remains essential.
How does the value of this contract compare to other similar government launch contracts over the past decade?
The $357 million awarded to United Launch Services for EELV launch services over approximately five years represents a significant but not outlier expenditure in the context of government space launch. When compared to other major government launch contracts, such as those awarded under the National Security Space Launch (NSSL) program or for NASA missions, the per-launch cost appears to be within a comparable range. Factors influencing this value include the specific payload mass, orbit insertion requirements, launch vehicle type, and the competitive landscape at the time of award. While precise year-over-year comparisons are complex due to varying mission profiles and market conditions, this contract's value aligns with the substantial investment required for reliable access to space for national security assets.
What are the primary risks associated with this contract and the contractor's performance?
The primary risks associated with this contract revolve around launch failures, schedule delays, and potential cost overruns, although the firm fixed-price structure mitigates the latter. A launch failure would have severe national security implications, potentially delaying critical missions and requiring costly replacements. Schedule delays can arise from technical issues, supply chain disruptions, or range availability. For the contractor, United Launch Services, risks include maintaining technological relevance in a rapidly evolving space industry, managing complex supply chains, and ensuring the reliability of aging launch infrastructure. The concentration of the market also poses a risk, as a failure or withdrawal of a key provider could significantly impact national security space access.
How effective has the EELV program been in meeting its objectives for national security space launches?
The Evolved Expendable Launch Vehicle (EELV) program, of which this contract is a part, has been largely effective in meeting its core objective: providing reliable and assured access to space for national security payloads. It successfully transitioned the U.S. government from the legacy Atlas and Titan rockets to more modern and cost-effective launch vehicles like the Atlas V and Delta IV. The program has achieved a high success rate for critical satellite deployments, supporting vital intelligence, surveillance, reconnaissance, and communication missions. While challenges related to cost and competition have persisted, the EELV program has fundamentally enabled the U.S. to maintain its space-based military capabilities over the past two decades.
What are the historical spending patterns for expendable launch vehicle services by the Department of Defense?
Historical spending patterns for expendable launch vehicle (ELV) services by the Department of Defense (DoD) show a consistent and significant investment over decades, reflecting the strategic importance of space-based assets. Prior to the EELV program, spending was distributed across various legacy vehicles. The EELV program consolidated much of this spending, with annual expenditures often in the hundreds of millions to over a billion dollars, depending on the number and complexity of missions awarded. Spending has fluctuated based on acquisition cycles, technological advancements (like the transition to the NSSL program), and geopolitical requirements. The $357 million awarded in this specific contract is representative of the substantial, ongoing investment required to maintain assured access to space.
Industry Classification
NAICS: Transportation and Warehousing › Nonscheduled Air Transportation › Nonscheduled Chartered Freight Air Transportation
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: United Launch Alliance, L.L.C
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: $360,336,930
Exercised Options: $357,364,493
Current Obligation: $357,364,493
Subaward Activity
Number of Subawards: 26
Total Subaward Amount: $-5,077,864
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-03-14
Current End Date: 2023-05-31
Potential End Date: 2023-05-31 00:00:00
Last Modified: 2025-04-22
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