NASA's $511M contract for EVA services shows a lack of competition and potential for cost overruns

Contract Overview

Contract Amount: $511,266,933 ($511.3M)

Contractor: Hamilton Sundstrand Corporation

Awarding Agency: National Aeronautics and Space Administration

Start Date: 2004-09-15

End Date: 2011-03-31

Contract Duration: 2,388 days

Daily Burn Rate: $214.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: DEFINE & INTEGRATE EVA REQUIREMENTS FOR SHUTTLE & ISS EXPEDITIONS/SUSTAINING ENGINEERING EVA

Place of Performance

Location: WINDSOR LOCKS, HARTFORD County, CONNECTICUT, 06096

State: Connecticut Government Spending

Plain-Language Summary

National Aeronautics and Space Administration obligated $511.3 million to HAMILTON SUNDSTRAND CORPORATION for work described as: DEFINE & INTEGRATE EVA REQUIREMENTS FOR SHUTTLE & ISS EXPEDITIONS/SUSTAINING ENGINEERING EVA Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The cost-plus-award-fee structure can incentivize contractors to incur costs to achieve award fees. 3. The duration of the contract (nearly 7 years) suggests a long-term need, but the lack of competition raises concerns about sustained value. 4. The specific services, Extravehicular Activity (EVA) requirements for Shuttle and ISS, are critical but complex, demanding specialized expertise. 5. Benchmarking against similar contracts is difficult due to the sole-source nature and specific technical requirements. 6. The absence of small business participation is noted, with no indication of set-aside or subcontracting goals.

Value Assessment

Rating: questionable

The contract's value is difficult to assess due to its sole-source nature and cost-plus-award-fee structure. Without competitive bidding, it's hard to determine if NASA received a fair market price. The cost-plus-award-fee (CPAF) contract type, while suitable for complex R&D or services where cost is uncertain, can incentivize higher spending to achieve award fees, potentially leading to costs exceeding initial estimates. Benchmarking against similar sole-source contracts for highly specialized aerospace services is challenging, but the lack of competition inherently reduces the pressure on the contractor to optimize costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning NASA did not conduct a competitive procurement. This typically occurs when only one responsible source is available or in cases of urgent need. The lack of competition means there was no opportunity for multiple companies to bid, which generally drives down prices and encourages innovation. Consequently, NASA may not have secured the most cost-effective solution or benefited from a wider range of technical approaches.

Taxpayer Impact: Taxpayers may have paid a premium for these critical spaceflight services due to the absence of competitive pressure. The sole-source award limits the government's ability to negotiate the best possible price and terms.

Public Impact

Astronauts and mission control personnel benefit from the specialized engineering and technical support for Extravehicular Activities (EVAs). The contract ensures the continued operational capability and safety of the Space Shuttle and International Space Station (ISS) programs. Services provided are critical for maintaining and upgrading space hardware in orbit, directly supporting NASA's human spaceflight missions. The contract supports a highly specialized workforce in aerospace engineering and technical support, primarily located in Connecticut.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost-plus-award-fee structure can incentivize higher spending to achieve performance bonuses.
Long contract duration without competition raises concerns about sustained value and cost control.
Lack of transparency in pricing due to sole-source nature.
No indication of small business participation or subcontracting goals.

Positive Signals

Contract addresses critical and highly specialized technical requirements for human spaceflight.
Hamilton Sundstrand Corporation has a track record in aerospace and defense, suggesting technical capability.
Award fee structure, if well-managed, can incentivize high performance on complex tasks.
Contract supports vital ongoing operations for the ISS and past Shuttle program.

Sector Analysis

The aerospace industry is characterized by high barriers to entry, significant R&D investment, and long product development cycles. NASA's spending on space exploration and operations represents a substantial portion of this sector. Contracts for specialized services like EVA support are crucial for maintaining human spaceflight capabilities. Benchmarking is difficult as these are often highly specialized, long-term requirements, frequently awarded through non-competitive means due to unique technical expertise and existing infrastructure. The total value of this contract, over $511 million, is significant within the context of NASA's operational budget for sustaining engineering.

Small Business Impact

This contract does not appear to have included any small business set-aside provisions, nor is there information suggesting significant subcontracting opportunities for small businesses. The sole-source nature of the award likely precluded the inclusion of such requirements. This means the primary economic benefit flows to the large prime contractor, with limited direct impact on the small business ecosystem within the aerospace support sector.

Oversight & Accountability

Oversight for this contract would primarily fall under NASA's contracting officer and program management. The cost-plus-award-fee structure necessitates robust monitoring of contractor performance and costs to ensure award fees are justified and that overall spending remains within acceptable parameters. Transparency is limited due to the sole-source nature. NASA's Inspector General would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

NASA Space Shuttle Program
International Space Station (ISS) Operations
NASA Extravehicular Activity (EVA) Support Services
Aerospace Engineering and Technical Services
NASA Sustaining Engineering Contracts

Risk Flags

Sole-source award
Cost-plus-award-fee structure
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

National Aeronautics and Space Administration awarded $511.3 million to HAMILTON SUNDSTRAND CORPORATION. DEFINE & INTEGRATE EVA REQUIREMENTS FOR SHUTTLE & ISS EXPEDITIONS/SUSTAINING ENGINEERING EVA

Who is the contractor on this award?

The obligated recipient is HAMILTON SUNDSTRAND CORPORATION.

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 $511.3 million.

What is the period of performance?

Start: 2004-09-15. End: 2011-03-31.

What is Hamilton Sundstrand Corporation's track record with NASA, particularly on EVA-related contracts?

Hamilton Sundstrand Corporation, now part of Collins Aerospace (a Raytheon Technologies company), has a long history of supporting NASA's human spaceflight programs. They have been a key provider of life support systems, space suits, and other critical components for EVAs on both the Space Shuttle and the International Space Station. Their involvement in this $511 million contract for EVA sustaining engineering builds upon this established relationship. While specific performance metrics for this particular contract are not detailed here, their extensive experience suggests a deep understanding of NASA's requirements and a proven capability in delivering complex aerospace hardware and services. Past performance reviews and contract histories would provide a more granular assessment of their reliability and quality on previous NASA endeavors.

How does the Cost-Plus-Award-Fee (CPAF) structure compare to other contract types for similar services?

Cost-Plus-Award-Fee (CPAF) contracts are often used for complex projects where the scope of work or the costs involved are uncertain at the outset, such as research and development or specialized technical services like EVA support. In a CPAF contract, the contractor is reimbursed for allowable costs plus a fee that is composed of a fixed base amount and an award amount. The award amount is determined by the government based on the contractor's performance against pre-defined criteria. This differs from fixed-price contracts, where the price is set regardless of the actual costs incurred, and cost-plus-fixed-fee (CPFF) contracts, where the fee is fixed. While CPAF can incentivize high performance and flexibility, it also carries risks. If not managed carefully, the potential for higher costs to achieve award fees can be a concern for the government, making robust oversight crucial.

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

The primary risks associated with a sole-source contract of this magnitude ($511 million) and duration (nearly 7 years) are significant. Firstly, the lack of competition means NASA likely did not achieve the best possible pricing, potentially leading to higher costs for taxpayers. Without competing bids, there's less incentive for the contractor to innovate or aggressively control expenses. Secondly, there's a risk of complacency; the contractor may face less pressure to maintain peak efficiency or quality over the contract's life. Thirdly, if the sole-source justification was weak or circumstances change, NASA could be locked into a suboptimal arrangement with limited recourse. Finally, the absence of competitive benchmarking makes it difficult to assess whether the contractor's performance and pricing are truly aligned with market value.

How does the $511 million spending compare to historical NASA expenditures on EVA support?

Historical spending on EVA support by NASA has varied significantly depending on program phases. During the peak of the Space Shuttle program, annual expenditures on EVA hardware, suits, and related services were substantial, often running into hundreds of millions of dollars annually, especially when considering development and production costs alongside operational support. For the International Space Station (ISS), sustaining engineering and operational EVA support also represent a significant, ongoing cost. This $511 million contract, spanning nearly seven years (2004-2011), averages approximately $73 million per year. While this figure is considerable, it needs to be contextualized against the overall NASA budget and the specific demands of the ISS and the final years of the Shuttle program. Direct comparisons are complex due to evolving technology, program priorities, and different contracting approaches over time.

What are the implications of the 'Other Scientific and Technical Consulting Services' NAICS code for this contract?

The North American Industry Classification System (NAICS) code 541690, 'Other Scientific and Technical Consulting Services,' indicates that the primary nature of this contract involves providing expert advice and technical support rather than manufacturing hardware or performing direct construction. For NASA's EVA requirements, this likely encompasses a broad range of activities, including engineering analysis, systems integration, operational planning, troubleshooting, and potentially research into new EVA techniques or equipment improvements. This classification suggests a focus on intellectual capital and specialized knowledge. However, it's a broad category, and the specific deliverables under this contract are tied to the critical, hands-on nature of supporting human spaceflight operations in a vacuum environment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 9BH13640276P

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: ONE HAMILTON ROAD, WINDSOR LOCKS, CT, 06096

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $823,095,131

Exercised Options: $516,395,250

Current Obligation: $511,266,933

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline