NASA's Deep Space Network contract awarded to Caltech for $1.4B over 9 years
Contract Overview
Contract Amount: $1,399,491,608 ($1.4B)
Contractor: California Institute of Technology
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2003-09-30
End Date: 2012-09-30
Contract Duration: 3,288 days
Daily Burn Rate: $425.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 51
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: DEEP SPACE NETWORK
Place of Performance
Location: PASADENA, LOS ANGELES County, CALIFORNIA, 91125
Plain-Language Summary
National Aeronautics and Space Administration obligated $1.40 billion to CALIFORNIA INSTITUTE OF TECHNOLOGY for work described as: DEEP SPACE NETWORK Key points: 1. Contract awarded to a single entity, raising questions about competition and potential cost efficiencies. 2. Significant duration of the contract suggests a long-term need for these specialized services. 3. The cost-plus award fee structure allows for flexibility but requires robust oversight to manage costs. 4. Research and Development focus indicates investment in advanced capabilities for space exploration. 5. The contract's value places it among substantial investments in space infrastructure. 6. Geographic concentration in California for a critical national asset.
Value Assessment
Rating: fair
The contract's value of $1.4 billion over nine years represents a substantial investment. Benchmarking this specific contract is challenging due to its unique nature supporting the Deep Space Network. However, the cost-plus award fee (CPAF) structure, while providing flexibility, can lead to higher costs if not managed tightly. Without detailed cost breakdowns and comparisons to similar large-scale R&D projects, assessing the true value for money is difficult. The absence of competitive bidding further complicates a direct value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to the California Institute of Technology (Caltech). This indicates that NASA determined Caltech was the only responsible source capable of performing the required research and development for the Deep Space Network. The lack of competition means there was no opportunity for price discovery through a bidding process, which could potentially lead to higher costs for the government.
Taxpayer Impact: Sole-source awards limit taxpayer benefit by removing the downward price pressure that competition typically provides. This means taxpayers may be paying a premium for the services rendered.
Public Impact
Benefits NASA's deep space exploration missions by providing essential communication and tracking infrastructure. Enables scientific discovery by facilitating data transmission from spacecraft across the solar system and beyond. Supports a highly specialized workforce in the fields of engineering, physics, and computer science. Primarily impacts operations and research conducted by NASA, with indirect benefits to the scientific community and the public through space exploration achievements. Geographically concentrated in California, impacting the local economy and specialized labor market.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
- Cost-plus award fee structure requires diligent oversight to prevent cost overruns.
- Long contract duration (9 years) may not adapt quickly to technological advancements.
- Concentration of a critical national asset in a single geographic location (California) presents a potential single point of failure risk.
Positive Signals
- Award to Caltech, a renowned research institution, suggests high technical capability.
- Long-term contract provides stability for critical deep space operations.
- Focus on R&D indicates investment in future space exploration capabilities.
Sector Analysis
The Deep Space Network (DSN) is a critical component of NASA's space exploration infrastructure, providing communication and tracking services for interplanetary missions. This contract falls within the Research and Development sector, specifically focusing on the physical, engineering, and life sciences. The market for such specialized services is highly concentrated, with few entities possessing the unique expertise and infrastructure required. Comparable spending benchmarks are difficult to establish due to the DSN's unique operational scope and Caltech's exclusive role.
Small Business Impact
This contract does not appear to involve small business set-asides, as it was awarded sole-source to a large research institution. There is no explicit information regarding subcontracting plans for small businesses. The focus on highly specialized R&D may limit opportunities for broad small business participation, though specific components or services could potentially be subcontracted.
Oversight & Accountability
Oversight for this contract is managed by NASA. The cost-plus award fee (CPAF) structure necessitates rigorous monitoring of costs and performance to ensure value. Accountability is tied to meeting performance objectives outlined in the contract. Transparency may be limited due to the sole-source nature and the proprietary aspects of R&D, but NASA is expected to provide reporting on program progress and expenditures.
Related Government Programs
- NASA Deep Space Network Operations
- NASA Research and Development Contracts
- Space Communication Infrastructure
- Interplanetary Mission Support
Risk Flags
- Sole-source award
- Cost-plus contract type
- Geographic concentration risk
Tags
nasa, deep-space-network, caltech, research-and-development, sole-source, cost-plus-award-fee, california, large-contract, space-exploration, communication-infrastructure
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $1.40 billion to CALIFORNIA INSTITUTE OF TECHNOLOGY. DEEP SPACE NETWORK
Who is the contractor on this award?
The obligated recipient is CALIFORNIA INSTITUTE OF TECHNOLOGY.
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 $1.40 billion.
What is the period of performance?
Start: 2003-09-30. End: 2012-09-30.
What is the historical spending trend for the Deep Space Network under Caltech's management?
Historical spending data for the Deep Space Network under Caltech's management prior to this specific $1.4 billion award is not directly provided in the abbreviated data. However, the contract duration of 3288 days (approximately 9 years) and the award amount suggest a significant and sustained investment. To understand historical trends, one would need to examine previous contracts awarded to Caltech or other entities for DSN operations and maintenance. This would involve looking at annual expenditures, contract modifications, and the scope of services provided over time. Without access to historical contract databases or NASA's detailed budget allocations for the DSN, a precise trend analysis is not possible based solely on the provided data. It is reasonable to infer that consistent funding has been allocated to maintain and upgrade this critical infrastructure over many years.
How does the cost-plus award fee (CPAF) structure impact contractor performance and government cost control for this contract?
The Cost-Plus Award Fee (CPAF) structure incentivizes the contractor, Caltech, to perform well by offering potential award fees based on achieving specific performance objectives. This can be beneficial for complex R&D projects like the Deep Space Network (DSN) where outcomes can be uncertain. For the government (NASA), CPAF provides flexibility to adapt to evolving research needs. However, it also necessitates robust oversight. NASA must establish clear, measurable performance criteria and diligently evaluate Caltech's performance against these metrics to determine award fees. Without strong oversight, the 'cost-plus' element could lead to higher-than-expected expenditures, as the contractor is reimbursed for allowable costs. The 'award fee' component aims to mitigate this by rewarding exceptional performance, but the government must ensure that the base fee and potential award fees do not inflate the overall cost excessively compared to alternative contract types.
What are the specific R&D objectives outlined in this contract, and how do they align with NASA's strategic goals?
The provided data indicates the contract is for 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS code 541710) and supports the 'DEEP SPACE NETWORK' (DSN). However, the specific R&D objectives are not detailed. Generally, DSN-related R&D focuses on enhancing communication capabilities (e.g., higher data rates, improved signal processing, new antenna technologies), developing advanced tracking and navigation techniques for deep space missions, and ensuring the network's reliability and resilience. These objectives directly align with NASA's strategic goals of advancing scientific knowledge, exploring the solar system and beyond, and enabling future human and robotic space exploration. Specific goals might include developing technologies for future missions to Mars, outer planets, or interstellar space, which require increasingly sophisticated communication infrastructure.
Given the sole-source nature, what mechanisms are in place to ensure Caltech's pricing is fair and reasonable?
When a contract is awarded sole-source, ensuring fair and reasonable pricing becomes a critical government responsibility, as competitive bidding is absent. For this NASA contract with Caltech, the government would typically employ several mechanisms. Firstly, NASA would likely conduct a thorough price analysis, which might involve reviewing Caltech's cost proposals, historical pricing data for similar services (if available), and potentially using independent government cost estimates. They may also request detailed cost breakdowns from Caltech, including direct costs, indirect costs, and profit margins. Furthermore, NASA might negotiate the contract terms, including the fee structure (in this case, Cost Plus Award Fee), to ensure it aligns with the perceived risk and complexity of the work. The 'award fee' component itself is a tool for ensuring performance and value, as it is tied to meeting specific objectives. Without direct access to NASA's negotiation records or price analysis reports for this specific contract, the exact mechanisms used cannot be definitively stated, but these are standard practices for sole-source procurements.
What are the potential risks associated with concentrating the Deep Space Network's operations and R&D in a single contractor and location?
Concentrating the Deep Space Network's (DSN) operations and R&D under a single contractor, Caltech, and within a single geographic location (California) presents several potential risks. A primary risk is the lack of redundancy; any disruption affecting Caltech's ability to perform (e.g., natural disasters, labor disputes, cyberattacks, or institutional challenges) could severely impact NASA's deep space communications. This single point of failure could jeopardize ongoing missions and future exploration endeavors. Furthermore, the sole-source nature removes the competitive pressure that typically drives innovation and cost efficiency. Without competitors, there might be less incentive for Caltech to proactively seek out the most cost-effective solutions or to rapidly adopt cutting-edge technologies if they are not explicitly mandated by the contract. This could lead to slower technological advancement and potentially higher long-term operational costs for NASA.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › Space R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 51
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 4800 OAK GROVE DR, PASADENA, CA, 91109
Business Categories: Category Business, Government, U.S. National Government, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $1,444,287,000
Exercised Options: $1,444,287,000
Current Obligation: $1,399,491,608
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: NAS703001
IDV Type: IDC
Timeline
Start Date: 2003-09-30
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 00:00:00
Last Modified: 2020-10-28
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