NASA's $400M external tank program with Lockheed Martin spanned 18 years, ending in 2010
Contract Overview
Contract Amount: $399,626,082 ($399.6M)
Contractor: Lockheed Martin Corp
Awarding Agency: National Aeronautics and Space Administration
Start Date: 1992-09-28
End Date: 2010-02-01
Contract Duration: 6,335 days
Daily Burn Rate: $63.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Other
Official Description: SUPPORT EXTERNAL TANK PROGRAM
Place of Performance
Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70129
Plain-Language Summary
National Aeronautics and Space Administration obligated $399.6 million to LOCKHEED MARTIN CORP for work described as: SUPPORT EXTERNAL TANK PROGRAM Key points: 1. The contract's long duration suggests a sustained need for the supported service. 2. A single award indicates a lack of competitive bidding for this specific requirement. 3. The cost-plus-no-fee contract type may offer less incentive for cost control compared to fixed-price arrangements. 4. The absence of small business participation raises questions about broader economic impact. 5. The contract's end date suggests current spending on this specific item has ceased. 6. The significant dollar value over its lifespan warrants scrutiny of its overall value.
Value Assessment
Rating: fair
This contract, awarded as a definitive contract with a cost-plus-no-fee structure, spanned nearly two decades. While the total obligated amount reached approximately $400 million, the lack of a fixed price or clear performance benchmarks makes direct value-for-money assessment challenging without further details on the services rendered and cost efficiencies achieved. Comparing it to similar long-term, sole-source support contracts for major aerospace programs would be necessary for a more robust benchmark.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed. This approach is often taken for highly specialized or long-standing requirements where a single contractor possesses unique capabilities or has been integral to the program's development. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs than if multiple vendors had vied for the contract.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down costs.
Public Impact
The primary beneficiaries were likely NASA's space shuttle program, which relied on the external tank for its missions. The services delivered were critical for the operational success of the space shuttle. The geographic impact was concentrated around the contractor's facilities in Louisiana. The contract supported a specialized workforce within the aerospace industry.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive opportunities and potentially increases costs.
- Cost-plus-no-fee structure may reduce contractor incentive for cost efficiency.
- Long contract duration without clear performance metrics can obscure value.
- Lack of small business participation limits economic inclusion.
Positive Signals
- Sustained support over 18 years indicates a critical and ongoing need.
- Contract completion suggests successful delivery of essential services for the space shuttle program.
- The large dollar value reflects the complexity and importance of the supported function.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically supporting a major government program. The aerospace industry is characterized by high R&D costs, long development cycles, and often relies on specialized contractors. The market for such specialized support services is typically limited, often leading to sole-source or limited competition awards for critical components like the external tank for the space shuttle program.
Small Business Impact
This contract was not set aside for small businesses, nor does it appear to have significant subcontracting requirements for small businesses based on the provided data. The sole-source nature of the award further limits opportunities for small business participation. This suggests that the primary contractor, Lockheed Martin, handled the majority of the work, potentially missing opportunities to leverage the innovation and cost-effectiveness that small businesses can bring to government contracts.
Oversight & Accountability
Oversight for this contract would have been primarily managed by the National Aeronautics and Space Administration (NASA). As a definitive contract with a cost-plus-no-fee structure, NASA would have been responsible for monitoring expenditures, ensuring compliance with contract terms, and verifying the necessity and allowability of costs incurred. Transparency would depend on NASA's internal reporting and public disclosure practices regarding long-term sole-source agreements.
Related Government Programs
- Space Shuttle Program
- Aerospace Manufacturing Contracts
- NASA Procurement
- Large-Scale Defense Contracts
Risk Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of small business participation
Tags
aerospace, nasa, lockheed-martin, definitive-contract, cost-plus-no-fee, sole-source, space-shuttle, louisiana, large-contract, historical-spending
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $399.6 million to LOCKHEED MARTIN CORP. SUPPORT EXTERNAL TANK PROGRAM
Who is the contractor on this award?
The obligated recipient is LOCKHEED MARTIN CORP.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $399.6 million.
What is the period of performance?
Start: 1992-09-28. End: 2010-02-01.
What specific services did Lockheed Martin provide under this contract?
The contract data indicates the service was 'SUPPORT EXTERNAL TANK PROGRAM'. This implies Lockheed Martin was responsible for the manufacturing, assembly, testing, and potentially integration of the external fuel tanks used by NASA's Space Shuttle. These tanks were critical components, holding the liquid hydrogen and liquid oxygen propellants required for launch and ascent. The long duration and significant funding suggest a comprehensive support role, likely encompassing design modifications, production, and logistical support throughout the operational life of the Space Shuttle program.
How does the cost-plus-no-fee (CPFF) structure compare to other contract types in terms of value for money?
Cost-plus-no-fee (CPFF) contracts reimburse the contractor for allowable costs plus a fixed fee representing profit. While this structure is useful for R&D or when cost is highly uncertain, it offers less incentive for cost control compared to fixed-price contracts, where the contractor bears the risk of cost overruns. For a long-term manufacturing program like the external tank, a fixed-price incentive or even a firm-fixed-price contract might have offered better value for taxpayers by encouraging efficiency. The 'no fee' aspect suggests the fee was predetermined or waived, which is unusual and requires further clarification on the profit motive or if it was a cost-reimbursement contract without a separate profit line item.
What were the risks associated with this sole-source, long-duration contract?
The primary risks associated with this sole-source, long-duration contract include potential cost escalation due to lack of competition, contractor complacency over time, and the risk of obsolescence if program requirements changed significantly. Without competitive pressure, Lockheed Martin had less incentive to innovate or reduce costs aggressively. Furthermore, a single point of failure existed; if Lockheed Martin encountered significant production issues or financial instability, it could have jeopardized the entire Space Shuttle program. NASA's oversight would have been crucial to mitigate these risks.
What was the historical spending pattern for the external tank program prior to this contract?
The provided data indicates this specific contract began in September 1992 and ended in February 2010, with a total obligated amount of $399,626,082. Information prior to 1992 is not available in this dataset. However, the Space Shuttle program began in the 1970s and became operational in 1981. It is highly probable that the external tank production and support were managed under different contracts or by different entities before Lockheed Martin's involvement under this specific award. Understanding the full historical spending would require examining procurement data from the program's inception.
What is the significance of the contract ending in 2010?
The contract's end date of February 1, 2010, is significant because it coincides with the planned retirement of the Space Shuttle program. The final Space Shuttle mission, STS-135, launched in July 2011. Therefore, this contract likely covered the final years of the shuttle's operational life, including the production and support of the last external tanks needed for missions. Its conclusion signifies the cessation of direct federal spending on this specific aspect of the Space Shuttle program.
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST NO FEE (S)
Contractor Details
Address: 13800 OLD GENTILLY RD, NEW ORLEANS
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $411,935,707
Exercised Options: $411,935,707
Current Obligation: $399,626,082
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 1992-09-28
Current End Date: 2010-02-01
Potential End Date: 2010-02-01 00:00:00
Last Modified: 2020-12-14
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