Orbital Sciences LLC awarded $27.1M for ducted rockets, a sole-source contract for target vehicles

Contract Overview

Contract Amount: $27,113,709 ($27.1M)

Contractor: Orbital Sciences LLC

Awarding Agency: Department of Defense

Start Date: 2010-06-28

End Date: 2013-10-15

Contract Duration: 1,205 days

Daily Burn Rate: $22.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NEW CONTRACT FOR FRP-4 (DUCTED ROCKETS FOR TARGET VEHICLES)

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85286

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $27.1 million to ORBITAL SCIENCES LLC for work described as: NEW CONTRACT FOR FRP-4 (DUCTED ROCKETS FOR TARGET VEHICLES) Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract value of $27.1 million for target vehicles suggests a specialized, high-cost niche within defense manufacturing. 3. Fixed pricing aims to control costs, but the lack of competition limits benchmarking opportunities. 4. The contract duration of 1205 days indicates a long-term need for these specialized components. 5. The geographic location in Arizona may point to specific manufacturing capabilities or testing facilities. 6. The absence of small business set-asides suggests the prime contractor is a large entity, with limited subcontracting opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized product. Without competitive bids, it's difficult to ascertain if the $27.1 million represents a fair market price for ducted rockets used in target vehicles. The fixed-price contract type offers some cost control, but the lack of competition means there's no direct comparison to similar offerings in the market. The unit cost, if calculable, would likely be high given the specialized application.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Orbital Sciences LLC was the only bidder considered. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition means there were no other companies vying for this contract, which can limit price negotiation and potentially lead to higher costs for the government compared to a competed procurement.

Taxpayer Impact: Taxpayers may be paying a premium for this contract due to the absence of competitive pressure. Without multiple bids, the government has less leverage to negotiate the lowest possible price.

Public Impact

The Department of Defense benefits from the acquisition of specialized ducted rockets for target vehicles, crucial for training and testing. The services delivered include the manufacturing and supply of advanced rocket components. The geographic impact is primarily in Arizona, where the contractor is located, potentially supporting local jobs and the regional economy. Workforce implications may include specialized manufacturing roles within Orbital Sciences LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Reliance on a single contractor for critical components could pose supply chain risks.
No clear indication of small business subcontracting opportunities.

Positive Signals

Fixed-price contract type helps to establish cost certainty for the government.
The contractor, Orbital Sciences LLC, is likely experienced in this specialized field.
The contract duration suggests a stable, long-term requirement for these components.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized area of the aerospace and defense industry. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality requirements. Spending in this area is often driven by national security needs and technological advancement. Comparable spending benchmarks are difficult to establish without more specific product details, but contracts for advanced aerospace components can range from millions to billions of dollars.

Small Business Impact

The contract was not competed and there is no indication of a small business set-aside. This suggests that the primary contractor, Orbital Sciences LLC, is likely a large business. Consequently, there may be limited direct subcontracting opportunities for small businesses on this specific contract, unless Orbital Sciences LLC voluntarily engages them. The overall impact on the small business ecosystem is likely minimal for this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which ensures contractors meet contractual requirements and quality standards. Accountability measures are embedded within the contract terms, including performance milestones and payment schedules. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Missile Manufacturing
Aerospace Components
Target Drones
Defense Procurement
Guided Missile Manufacturing

Risk Flags

Sole-source procurement
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.1 million to ORBITAL SCIENCES LLC. NEW CONTRACT FOR FRP-4 (DUCTED ROCKETS FOR TARGET VEHICLES)

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 $27.1 million.

What is the period of performance?

Start: 2010-06-28. End: 2013-10-15.

What is the specific technical capability of the ducted rockets being procured, and why is Orbital Sciences LLC the sole source?

The ducted rockets are specified for use as components in target vehicles, which are unmanned aircraft systems designed to simulate enemy threats for military training exercises. These target vehicles often require specific propulsion systems that can mimic the performance characteristics of adversary aircraft. Orbital Sciences LLC, now part of Northrop Grumman, has a history and established expertise in developing and manufacturing advanced propulsion systems, including those for space launch vehicles and missile defense systems. The sole-source justification likely stems from proprietary technology, unique design requirements, or a demonstrated capability that no other contractor could readily replicate or fulfill within the required timeframe and specifications for these particular target vehicles.

How does the $27.1 million contract value compare to historical spending on similar target vehicle components?

Direct historical spending comparisons for this specific component are challenging due to the specialized nature of ducted rockets for target vehicles and the sole-source award. However, the $27.1 million figure over approximately four years (1205 days) suggests a significant investment. Contracts for unmanned aerial systems (UAS) and their components can vary widely. For context, less complex target drones might cost hundreds of thousands to a few million dollars, while advanced, high-performance systems or their critical subsystems, like specialized rocket motors, can easily reach tens of millions. Without access to classified data or more detailed procurement histories for similar sole-source acquisitions, a precise benchmark is difficult, but the amount indicates a substantial and critical procurement.

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

The primary risks associated with a sole-source contract of this magnitude include potential cost overruns due to a lack of competitive pricing, reduced incentive for the contractor to innovate or improve efficiency, and a heightened risk of supply chain disruption if the sole provider faces operational issues. Taxpayers may bear a higher cost without the benefit of market forces driving down prices. Furthermore, the government's negotiating power is diminished. There's also a strategic risk if the technology becomes obsolete or if a competitor develops a superior, more cost-effective alternative that cannot be easily integrated due to the existing sole-source relationship.

What performance metrics or oversight mechanisms are in place to ensure the effectiveness of these ducted rockets?

While specific performance metrics are not detailed in the provided data, typical oversight for such a contract would involve the Defense Contract Management Agency (DCMA). Performance would likely be measured against technical specifications outlined in the contract, including thrust, duration, reliability, and integration compatibility with the target vehicles. Oversight would include regular progress reviews, quality assurance inspections during manufacturing, and acceptance testing of the delivered components. The firm fixed-price nature of the contract incentivizes the contractor to meet these specifications efficiently to maximize profit, while the government retains the right to reject non-conforming articles.

What is Orbital Sciences LLC's track record with the Department of Defense, particularly in propulsion systems?

Orbital Sciences LLC, now part of Northrop Grumman's defense sector, has a long and extensive track record with the Department of Defense and other government agencies, particularly in aerospace and defense systems. They have been involved in numerous programs related to satellite development, launch vehicles (like the Minotaur rocket), and missile defense systems. Their expertise in propulsion is well-established, encompassing solid and liquid rocket motors, as well as advanced concepts. The company has historically secured significant contracts for complex defense systems, indicating a strong performance record and a trusted relationship with the DoD for delivering sophisticated technological solutions.

How does this contract fit into the broader context of US defense spending on target and threat simulation systems?

This contract for ducted rockets for target vehicles fits into the broader context of the US Department of Defense's continuous investment in realistic training and threat simulation capabilities. As military technologies evolve, so too must the systems used for training and testing. Target vehicles equipped with advanced propulsion systems like ducted rockets are essential for simulating sophisticated adversary threats, allowing warfighters to train under conditions that closely mirror potential real-world scenarios. Spending in this area is driven by the need to maintain a technological edge and ensure combat readiness. While specific figures for the entire target simulation market are not readily available, such specialized components represent a critical, albeit niche, segment of the overall defense procurement budget.

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: N0001910R0018

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation (UEI: 967356127)

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

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

Financial Breakdown

Contract Ceiling: $27,113,709

Exercised Options: $27,113,709

Current Obligation: $27,113,709

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline