DoD's $96.5M Missile Contract with Orbital Sciences: A 13-Year Journey

Contract Overview

Contract Amount: $96,553,786 ($96.6M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2002-11-01

End Date: 2015-12-31

Contract Duration: 4,808 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $96.6 million to ORBITAL SCIENCES LLC for work described as: Key points: 1. Significant long-term investment in guided missile and space vehicle manufacturing. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Contract duration of 4808 days (over 13 years) raises questions about flexibility and evolving needs. 4. Sector focus on defense, specifically missile defense, indicates specialized and critical technology.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. The awarded amount of $96.5M over 13 years averages to approximately $7.4M annually, which needs to be benchmarked against similar long-term missile development contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is generally positive for price discovery. However, the long duration might have allowed for price drift or reduced the impact of initial competitive pressure over time.

Taxpayer Impact: The long-term nature and cost-plus structure warrant scrutiny to ensure taxpayer funds were used efficiently and effectively throughout the contract's lifecycle.

Public Impact

Impacts national security through the development of missile defense capabilities. Supports a major defense contractor and its supply chain, potentially creating jobs. Long contract duration may indicate a stable, albeit potentially rigid, program.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 13 years)
Cost Plus Fixed Fee contract type
Lack of small business participation indicated

Positive Signals

Awarded under full and open competition
Focus on critical defense technology

Sector Analysis

This contract falls within the defense sector, specifically focusing on the manufacturing of guided missiles and space vehicles. Spending in this area is typically high due to the specialized nature of technology and national security requirements. Benchmarks would compare this to other long-term missile development programs.

Small Business Impact

The data indicates that small business participation was not a factor in this contract (ss: false, sb: false). This suggests the prime contractor is a large entity, and opportunities for small businesses may have been limited or not explicitly tracked in this award.

Oversight & Accountability

The long duration of this contract necessitates robust oversight to ensure performance milestones were met and costs remained justified. Accountability would hinge on detailed performance reviews and audits throughout the 13-year period.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Risk of reduced competitive pressure over long contract duration
Lack of small business participation noted
Contract duration may not align with rapidly evolving technology needs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $96.6 million to ORBITAL SCIENCES LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ORBITAL SCIENCES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $96.6 million.

What is the period of performance?

Start: 2002-11-01. End: 2015-12-31.

Was the Cost Plus Fixed Fee structure effectively managed to prevent excessive cost growth over the 13-year period?

The Cost Plus Fixed Fee (CPFF) structure allows for reimbursement of actual costs plus a predetermined fixed fee. Over a long duration like 13 years, effective management is crucial. This involves rigorous cost tracking, regular audits, and strong program oversight to ensure costs remain reasonable and the fixed fee provides adequate incentive for the contractor to control expenses. Without detailed performance data, it's difficult to definitively assess if costs were optimally managed.

How did the full and open competition at the outset influence the overall value and cost-effectiveness over the contract's extended lifespan?

Initial full and open competition is designed to foster competitive pricing and identify the best value. However, for a contract spanning over 13 years, the initial competitive advantage may diminish. Market conditions, technological advancements, and contractor performance can evolve significantly. The true test of value lies in whether follow-on actions or contract modifications maintained competitive pricing or if the initial competition set a baseline that proved advantageous throughout the extended period.

What was the specific impact of this contract on the Missile Defense Agency's capabilities and overall effectiveness in its mission?

This contract directly supported the Missile Defense Agency's mission by funding the manufacturing of guided missiles and space vehicles. The long-term nature suggests a sustained effort towards developing or producing critical components for missile defense systems. The effectiveness would be measured by the successful delivery of these assets, their performance in testing and deployment, and their contribution to the agency's ability to counter ballistic missile threats.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 45101 WARP DRIVE, 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: $13,693,521

Exercised Options: $17,877,533

Current Obligation: $96,553,786

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline