Orbital Sciences LLC awarded $97M for GQM-163 Target Vehicle FMS, a sole-source definitive contract

Contract Overview

Contract Amount: $97,026,431 ($97.0M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2007-03-19

End Date: 2012-12-31

Contract Duration: 2,114 days

Daily Burn Rate: $45.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: GQM-163 TARGET VEHICLE FMS

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85286

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $97.0 million to ORBITAL SCIENCES LLC for work described as: GQM-163 TARGET VEHICLE FMS Key points: 1. Contract awarded for guided missile and space vehicle manufacturing. 2. Long-term contract duration of 2114 days. 3. Fixed Price Incentive contract type suggests shared risk between government and contractor. 4. Sole-source award indicates limited competition. 5. Contract performance period spans over five years. 6. Significant investment in defense target vehicle production.

Value Assessment

Rating: fair

The contract value of $97M for the GQM-163 Target Vehicle FMS appears substantial. Without specific benchmarks for comparable target vehicles or detailed cost breakdowns, a precise value-for-money assessment is challenging. The fixed-price incentive structure implies that cost overruns would be shared, potentially mitigating some risk for the government. However, the lack of competition in a sole-source award raises concerns about whether the government secured the most competitive pricing possible.

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 among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of open competition limits the government's ability to leverage market forces to drive down prices and potentially explore innovative solutions from a wider range of suppliers.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is less pressure on the contractor to offer competitive pricing. It also reduces transparency in the procurement process.

Public Impact

The Department of Defense benefits from the acquisition of critical target vehicles for missile defense testing and training. This contract supports the development and production of guided missiles and space vehicles. The contract's geographic impact is primarily in Arizona, where the contractor is located. It likely supports a specialized workforce in aerospace manufacturing and engineering.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to limited competition.
Potential for contractor lock-in given the specialized nature of the product.

Positive Signals

Contract awarded to a single, established provider (Orbital Sciences LLC) suggesting reliability.
Fixed Price Incentive contract type aligns incentives for cost control.
Long-term contract provides stability for production and supply chain.

Sector Analysis

The GQM-163 Target Vehicle FMS falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized segment of the aerospace and defense industry. This sector is characterized by high technological barriers to entry, significant R&D investment, and often involves complex, long-term government contracts. Spending in this area is critical for national defense capabilities, including testing and training for advanced weapon systems. Comparable spending would involve other major defense contractors involved in missile systems and aerospace manufacturing.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Orbital Sciences LLC voluntarily engages them for subcontracting opportunities. Further investigation into subcontracting reports would be needed to assess any indirect benefits to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The definitive contract structure and fixed-price incentive type provide some level of accountability. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Target Drone Programs
Aerospace Manufacturing Contracts
Guided Missile Production

Risk Flags

Sole-source award
Lack of competition
Potential for non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.0 million to ORBITAL SCIENCES LLC. GQM-163 TARGET VEHICLE FMS

Who is the contractor on this award?

The obligated recipient is ORBITAL SCIENCES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $97.0 million.

What is the period of performance?

Start: 2007-03-19. End: 2012-12-31.

What is the historical spending trend for the GQM-163 Target Vehicle program?

The provided data reflects a single definitive contract awarded to Orbital Sciences LLC for the GQM-163 Target Vehicle FMS with a value of $97,026,431.15, spanning from March 19, 2007, to December 31, 2012. This specific contract represents a significant investment during that period. To understand the broader historical spending trend, one would need to examine prior contracts for this or similar target vehicles, as well as subsequent procurements. Analyzing annual spending, contract modifications, and the number of awards over time would reveal patterns in program funding, potential increases or decreases in demand, and the evolution of contract values within the guided missile and space vehicle manufacturing sector.

How does the pricing of this contract compare to similar target vehicle procurements?

A direct comparison of pricing for this $97M GQM-163 Target Vehicle FMS contract is challenging without access to data on similar procurements. The 'Guided Missile and Space Vehicle Manufacturing' (NAICS 336414) category is broad, and target vehicles can vary significantly in complexity, capability, and cost. As this was a sole-source award, it inherently lacks the competitive benchmarking that would typically inform a value-for-money assessment against market rates. To perform a robust comparison, one would need to identify contracts for comparable target vehicles (e.g., similar size, speed, payload, and purpose) awarded through competitive processes, analyze their unit costs, and factor in differences in contract type, duration, and specific technical requirements.

What are the primary risks associated with this sole-source contract?

The primary risks associated with this sole-source contract stem from the lack of competition. Firstly, there is a significant risk of paying a non-competitive price, as the government did not benefit from market forces driving down costs. Secondly, there's a risk of contractor complacency or reduced innovation, as the incumbent contractor faces no direct threat from competitors for future awards. Thirdly, there's a potential for vendor lock-in, where the government becomes heavily reliant on Orbital Sciences LLC for this specific capability, making it difficult and costly to switch providers or adopt alternative solutions. Finally, sole-source awards can sometimes indicate a lack of robust market research or planning by the procuring agency.

What is the track record of Orbital Sciences LLC in fulfilling similar defense contracts?

Orbital Sciences LLC (now part of Northrop Grumman) has a substantial track record in fulfilling defense and aerospace contracts, particularly in areas related to launch vehicles, satellites, and missile systems. They have been a significant player in government contracting for decades. For the GQM-163 Target Vehicle program specifically, the award of this $97M definitive contract from 2007 to 2012 indicates a successful, albeit sole-source, relationship during that period. Their broader experience includes programs like the Minotaur rocket family, various satellite programs for NASA and military branches, and contributions to missile defense initiatives. Assessing their overall performance would involve reviewing past performance evaluations, on-time delivery rates, and cost control metrics across their portfolio of government contracts.

How does the contract duration (2114 days) impact program effectiveness and cost?

The contract duration of 2114 days (approximately 5.8 years) for the GQM-163 Target Vehicle FMS suggests a long-term commitment to acquiring these critical assets. This extended period allows for sustained production, potentially leading to economies of scale and more predictable supply chains, which can help stabilize costs over time. It also provides the program office with continuity, reducing the administrative burden and potential disruptions associated with frequent re-competitions. However, a long duration also increases the risk of technological obsolescence if the target vehicle's capabilities do not keep pace with evolving threats or testing requirements. Furthermore, a fixed-price incentive structure over such a long period requires careful monitoring to ensure the contractor remains incentivized to manage costs effectively throughout the contract's life.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001907R0006

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

Address: 1575 SOUTH PRICE RD, CHANDLER, AZ, 85286

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $98,844,879

Exercised Options: $98,296,859

Current Obligation: $97,026,431

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline