DoD's $1.58B National Security Space Launch contract awarded to United Launch Services for vital space access
Contract Overview
Contract Amount: $158,321,389 ($158.3M)
Contractor: United Launch Services, LLC
Awarding Agency: Department of Defense
Start Date: 2022-08-19
End Date: 2023-08-18
Contract Duration: 364 days
Daily Burn Rate: $434.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: NATIONAL SECURITY SPACE LAUNCH PHASE 2
Place of Performance
Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $158.3 million to UNITED LAUNCH SERVICES, LLC for work described as: NATIONAL SECURITY SPACE LAUNCH PHASE 2 Key points: 1. Contract value represents significant investment in national security space capabilities. 2. Awarded under full and open competition, suggesting a robust market. 3. Fixed-price contract type aims to control costs and provide predictability. 4. Short duration of one year may indicate a bridge or specific mission focus. 5. Focus on space launch is critical for intelligence, defense, and communication. 6. Geographic location in Colorado points to a key hub for space operations.
Value Assessment
Rating: good
The contract value of $1.58 billion for a one-year period for space launch services is substantial. Benchmarking against similar large-scale national security space launch contracts is difficult without more specific service details. However, the firm fixed-price nature suggests an effort to manage costs effectively. The value appears aligned with the critical and complex nature of national security space missions, which typically involve high development and operational expenses.
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 vendors were likely considered. This approach generally fosters a competitive environment, encouraging bidders to offer their best pricing and technical solutions to secure the award. The presence of multiple bidders typically leads to better price discovery and potentially more favorable terms for the government.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and ensures the government receives competitive pricing for essential services.
Public Impact
Ensures continued access to space for critical national security assets, including intelligence gathering and missile warning systems. Supports the U.S. space industrial base by providing significant revenue to launch service providers. Maintains U.S. technological superiority in space-based defense and communication capabilities. Impacts the workforce within the aerospace and defense sectors, particularly in specialized engineering and launch operations roles. Geographic impact is concentrated in areas with significant aerospace and defense industry presence, such as Colorado.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen technical challenges arise in complex space launch operations.
- Dependence on a single contractor for a year could create risks if performance issues emerge.
- The short duration might lead to less long-term strategic planning and potential for frequent re-competition costs.
Positive Signals
- Firm fixed-price contract structure helps mitigate cost escalation risks.
- Awarded through full and open competition, suggesting a strong pool of qualified providers.
- Focus on national security space launch indicates alignment with critical government priorities.
- Contractor's established role in space launch provides a degree of confidence in execution.
Sector Analysis
The National Security Space Launch (NSSL) program is a cornerstone of the U.S. government's strategy to ensure reliable access to space for national security missions. This sector involves highly specialized and technologically advanced launch services, often requiring significant R&D investment and stringent safety protocols. The market is characterized by a few key players capable of meeting the demanding requirements. Spending in this area is critical for maintaining communication, intelligence, surveillance, and reconnaissance capabilities, as well as for supporting scientific and exploration endeavors.
Small Business Impact
While this contract is a large prime award likely going to a major aerospace corporation, the implications for small businesses are indirect. Large prime contractors often rely on a network of small business subcontractors for specialized components, software, and services. The success of this contract could lead to subcontracting opportunities within the broader space launch ecosystem, supporting small businesses involved in the supply chain.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force, with potential involvement from the Department of Defense's Inspector General. Mechanisms likely include regular performance reviews, milestone tracking, and adherence to strict technical and safety standards. Transparency is generally maintained through contract reporting requirements, though specific operational details may be classified due to national security implications.
Related Government Programs
- National Security Space Launch (NSSL)
- Space Force Launch Services
- Commercial Satellite Launch Services
- Defense Space Acquisition Programs
Risk Flags
- Potential for launch delays impacting national security asset deployment.
- Technical complexity inherent in space launch operations.
- Dependence on a limited number of highly specialized contractors.
- Budgetary fluctuations in defense spending could impact future contract awards.
Tags
defense, department-of-defense, department-of-the-air-force, space-launch, national-security, full-and-open-competition, firm-fixed-price, united-launch-services, colorado, large-contract, aerospace, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $158.3 million to UNITED LAUNCH SERVICES, LLC. NATIONAL SECURITY SPACE LAUNCH PHASE 2
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 $158.3 million.
What is the period of performance?
Start: 2022-08-19. End: 2023-08-18.
What is the historical spending trend for the National Security Space Launch program?
The National Security Space Launch (NSSL) program has seen significant and consistent investment over the years. The program evolved from the Evolved Expendable Launch Vehicle (EELV) program, which also represented billions in federal spending. The NSSL Phase 1 and Phase 2 contracts represent a multi-year commitment to ensuring reliable access to space for national security payloads. Spending has been in the hundreds of millions to over a billion dollars annually, reflecting the high cost of developing, manufacturing, and operating sophisticated launch vehicles. Recent awards under Phase 2, including this one, underscore the ongoing need for robust space launch capabilities and the substantial budget allocated to meet these requirements.
How does the performance of United Launch Services compare to other major space launch providers for government contracts?
United Launch Services (ULS), primarily operating the Atlas and Delta rocket families, has a long and generally successful track record in supporting government space launch missions, including those for national security. They have historically been one of the primary providers for the Department of Defense and NASA. While specific performance metrics like launch success rates and on-time delivery are crucial, ULS has generally demonstrated high reliability. However, the space launch market is competitive, with other providers like SpaceX also securing significant government contracts. Comparisons often focus on cost-effectiveness, payload capacity, launch cadence, and adherence to specific mission requirements. ULS's continued awards suggest they remain a competitive and trusted provider for critical national security space missions.
What are the primary risks associated with this specific National Security Space Launch contract?
The primary risks associated with this contract revolve around the inherent complexities and high stakes of space launch. Technical risks include potential launch failures, delays due to manufacturing or integration issues, and performance degradation of launch vehicles or associated ground systems. Schedule risks are also significant, as delays in one launch can have cascading effects on the deployment of national security assets. Cost risks, while mitigated by the firm fixed-price structure, could still emerge if unforeseen technical challenges require costly workarounds or if contract modifications become necessary. Furthermore, geopolitical factors or changes in the threat landscape could alter mission priorities, potentially impacting the demand or nature of future launch requirements.
How does the firm fixed-price contract type benefit the government in this context?
A firm fixed-price (FFP) contract type is generally advantageous for the government when the scope of work is well-defined and the risks are understood. In the context of space launch, FFP provides cost certainty, meaning the contractor bears the primary risk of cost overruns. This incentivizes the contractor to manage their expenses efficiently and to perform the work within the agreed-upon budget. For the government, it simplifies budgeting and financial management, as the total cost of the contract is known upfront, barring any necessary modifications. This structure is particularly valuable for predictable services like launch operations where the requirements are clearly delineated.
What is the significance of the 'Nonscheduled Chartered Freight Air Transportation' (NAICS 481212) code in relation to this space launch contract?
The NAICS code 481212, 'Nonscheduled Chartered Freight Air Transportation,' appears to be a broad classification that might encompass the transportation aspect of moving large, specialized payloads or components related to space launch, rather than the launch itself. Space launch services are typically classified under more specific aerospace or defense industry codes. However, it's possible this code was used for specific logistical elements, such as the transportation of rocket stages, large satellite components, or specialized equipment to launch sites via chartered aircraft. It suggests a focus on the complex logistical challenges involved in preparing for and executing a space launch, which often requires specialized, non-routine transportation solutions.
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
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: $158,321,389
Exercised Options: $158,321,389
Current Obligation: $158,321,389
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA881120D0001
IDV Type: IDC
Timeline
Start Date: 2022-08-19
Current End Date: 2023-08-18
Potential End Date: 2023-08-18 00:00:00
Last Modified: 2023-03-15
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