Orbital Sciences LLC awarded $168M for spacecraft assembly, integration, and launch services by the Air Force

Contract Overview

Contract Amount: $168,258,830 ($168.3M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2017-02-03

End Date: 2024-01-30

Contract Duration: 2,552 days

Daily Burn Rate: $65.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CT::IGF, STP SAT-6, SPACECRAFT ASSEMBLY, INTEGRATION&LAUNCH

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $168.3 million to ORBITAL SCIENCES LLC for work described as: IGF::CT::IGF, STP SAT-6, SPACECRAFT ASSEMBLY, INTEGRATION&LAUNCH Key points: 1. Contract awarded to a single entity, raising questions about competitive pricing. 2. Long contract duration of 2552 days suggests a need for sustained support. 3. Firm Fixed Price contract type offers cost certainty but may limit flexibility. 4. The contract falls under Guided Missile and Space Vehicle Manufacturing, a specialized sector. 5. No small business set-aside indicates potential for larger prime contractors to dominate. 6. Virginia is the state of performance, suggesting a concentration of aerospace activity.

Value Assessment

Rating: fair

The contract value of $168.3 million over approximately seven years for spacecraft assembly, integration, and launch services appears substantial. Without specific benchmarks for similar, highly specialized services, a direct value-for-money assessment is challenging. However, the lack of competition (sole-source) inherently limits the government's ability to secure the lowest possible price through market forces. The firm-fixed-price structure provides cost predictability, which is a positive aspect for budget management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Orbital Sciences LLC, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in situations where only one responsible source exists. The lack of competition means that price discovery through market mechanisms was bypassed, potentially leading to higher costs than if multiple bids had been considered.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government did not leverage market competition to drive down costs for these critical space vehicle services.

Public Impact

The U.S. Air Force benefits from essential spacecraft assembly, integration, and launch capabilities. Services delivered are critical for national security and space-based operations. Performance is concentrated in Virginia, potentially supporting the local aerospace workforce. The contract ensures the availability of specialized expertise for complex space missions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Long contract duration could lead to cost overruns if not managed effectively.
Lack of small business involvement may limit opportunities for smaller, innovative firms in the supply chain.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award to a known entity (Orbital Sciences LLC) suggests a level of established capability.
Contract supports critical national security space missions.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized and technologically advanced segment of the aerospace industry. It involves complex engineering, manufacturing, and integration processes for space-bound assets. Spending in this sector is often characterized by large, long-term contracts due to the high cost and complexity of development and deployment. Comparable spending benchmarks are difficult to establish due to the unique nature of each space mission and vehicle.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Consequently, the primary award went to Orbital Sciences LLC, a larger entity. While the prime contractor may engage small businesses as subcontractors, the direct award structure does not prioritize small business participation. This could limit opportunities for smaller firms to directly contribute to major space vehicle programs and potentially concentrate subcontracting dollars with larger, established suppliers.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The firm-fixed-price nature provides some cost control, but performance monitoring and adherence to technical specifications would be key oversight areas. The Inspector General's office for the Department of Defense would have jurisdiction for investigating fraud, waste, or abuse related to this contract.

Related Government Programs

Space Vehicle Manufacturing
Missile Manufacturing
Launch Services
Aerospace Engineering Services
Defense Space Programs

Risk Flags

Sole-source award
Lack of competition
High contract value
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $168.3 million to ORBITAL SCIENCES LLC. IGF::CT::IGF, STP SAT-6, SPACECRAFT ASSEMBLY, INTEGRATION&LAUNCH

Who is the contractor on this award?

The obligated recipient is ORBITAL SCIENCES 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 $168.3 million.

What is the period of performance?

Start: 2017-02-03. End: 2024-01-30.

What is the historical spending pattern for Orbital Sciences LLC with the Department of the Air Force for similar services?

Analyzing historical spending for Orbital Sciences LLC with the Department of the Air Force for similar services requires access to detailed contract databases. However, given this is a sole-source award for spacecraft assembly, integration, and launch, it suggests a potentially long-standing relationship or a unique capability that has been previously recognized. Without specific historical data, it's difficult to ascertain if this $168 million award represents an increase, decrease, or consistent level of spending compared to prior engagements for comparable services. Further investigation into past contracts, including their value, duration, and competitive nature, would be necessary to establish a clear spending trend.

How does the pricing of this contract compare to industry benchmarks for spacecraft assembly, integration, and launch services?

Benchmarking the pricing of this $168 million sole-source contract against industry standards for spacecraft assembly, integration, and launch is challenging due to the highly specialized and often proprietary nature of these services. Unlike more commoditized goods or services, space vehicle programs involve unique mission requirements, advanced technologies, and significant research and development costs. The lack of competition further complicates direct price comparisons, as market forces that typically drive down prices are absent. A thorough benchmark would require access to detailed cost breakdowns, performance metrics, and data from comparable sole-source or competitively awarded contracts for similar space systems, which is often not publicly available.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, for spacecraft assembly, integration, and launch services, typical KPIs would likely include adherence to schedule milestones, successful completion of integration tests, meeting technical performance specifications (e.g., payload capacity, orbital accuracy), launch success rates, and overall system reliability. Cost control within the firm-fixed-price framework would also be a critical performance aspect. The Air Force would establish these KPIs in the contract's Statement of Work (SOW) to ensure the contractor meets the required standards for mission success and taxpayer value.

What is the risk assessment associated with a sole-source award for critical space vehicle manufacturing?

A sole-source award for critical space vehicle manufacturing carries inherent risks. The primary risk is the potential for inflated pricing due to the absence of competitive pressure, leading to reduced value for taxpayer dollars. There's also a risk of complacency from the contractor, as there's no immediate threat of losing future business to competitors. Furthermore, reliance on a single source can create vulnerabilities if the contractor experiences financial difficulties, technical setbacks, or supply chain disruptions. Mitigating these risks often involves robust government oversight, detailed performance monitoring, and potentially negotiating favorable terms and incentives within the contract.

What is the projected impact of this contract on the overall aerospace and defense market?

This $168 million contract for spacecraft assembly, integration, and launch services awarded to Orbital Sciences LLC contributes to the overall activity within the aerospace and defense market, particularly in the space sector. As a significant award, it signifies continued government investment in space capabilities, which can stimulate innovation and sustain specialized workforces. For Orbital Sciences LLC, it represents a substantial revenue stream and reinforces their position as a key provider in this niche. The sole-source nature, however, means that the competitive landscape for this specific type of contract remains limited, potentially impacting market dynamics for other potential providers.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 45101 WARP DR, DULLES, VA, 20166

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $168,379,930

Exercised Options: $168,379,930

Current Obligation: $168,258,830

Actual Outlays: $4,832,480

Subaward Activity

Number of Subawards: 123

Total Subaward Amount: $19,698,030

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline