NASA's $8.5B Space Program Operations Contract Awarded to United Space Alliance for R&D
Contract Overview
Contract Amount: $8,520,322,214 ($8.5B)
Contractor: United Space Alliance, LLC
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2006-10-01
End Date: 2013-09-30
Contract Duration: 2,556 days
Daily Burn Rate: $3.3M/day
Competition Type: FOLLOW ON TO COMPETED ACTION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: SPACE PROGRAM OPERATIONS CONTRACT (SPOC)
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77058
State: Texas Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $8.52 billion to UNITED SPACE ALLIANCE, LLC for work described as: SPACE PROGRAM OPERATIONS CONTRACT (SPOC) Key points: 1. Significant contract value of $8.52 billion over 9 years. 2. Awarded to a single entity, United Space Alliance, LLC. 3. Classified under Research and Development in Physical, Engineering, and Life Sciences. 4. Follow-on to a competed action, suggesting prior competition. 5. Contract type is Cost Plus Award Fee, incentivizing performance.
Value Assessment
Rating: fair
The Cost Plus Award Fee structure allows for performance-based incentives, but the lack of detailed cost breakdowns makes direct pricing assessment difficult. Benchmarking against similar large-scale R&D contracts is challenging due to the specialized nature of space operations.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract is a 'Follow On To Competed Action,' implying some level of prior competition. However, the current award to a single entity suggests limited competition for this specific follow-on, potentially impacting price discovery.
Taxpayer Impact: The large contract value represents a significant taxpayer investment. The effectiveness of the Cost Plus Award Fee structure in controlling costs and ensuring value for money is crucial for taxpayer impact.
Public Impact
Supports critical space program operations and research. Impacts the advancement of physical, engineering, and life sciences through R&D. Ensures continuity of essential space mission support. Potential for technological advancements and scientific discoveries.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition for follow-on action.
- Cost Plus Award Fee structure requires careful monitoring.
- Lack of detailed cost data for benchmarking.
Positive Signals
- Follow-on to competed action indicates prior competitive process.
- Award fee structure incentivizes performance.
- Long-term contract provides stability for operations.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences related to space operations. Spending benchmarks for such specialized, large-scale R&D contracts are difficult to establish due to their unique nature and long durations.
Small Business Impact
The data indicates the prime contractor is UNITED SPACE ALLIANCE, LLC, and the contract does not explicitly state any small business set-aside. Further analysis would be needed to determine the extent of small business participation as subcontractors.
Oversight & Accountability
The Cost Plus Award Fee contract type necessitates robust oversight to ensure performance targets are met and costs are managed effectively. NASA's oversight mechanisms will be critical in validating award fees and ensuring accountability for taxpayer funds.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- National Aeronautics and Space Administration Contracting
- National Aeronautics and Space Administration Programs
Risk Flags
- Potential for cost overruns due to Cost Plus Award Fee structure.
- Limited competition in follow-on award.
- Difficulty in benchmarking specialized space operations.
- Long contract duration increases exposure to market and technological changes.
Tags
research-and-development-in-the-physical, national-aeronautics-and-space-administr, tx, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $8.52 billion to UNITED SPACE ALLIANCE, LLC. SPACE PROGRAM OPERATIONS CONTRACT (SPOC)
Who is the contractor on this award?
The obligated recipient is UNITED SPACE ALLIANCE, LLC.
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 $8.52 billion.
What is the period of performance?
Start: 2006-10-01. End: 2013-09-30.
How effectively does the Cost Plus Award Fee structure incentivize United Space Alliance to achieve optimal performance and cost efficiency in space program operations?
The Cost Plus Award Fee (CPAFF) structure is designed to incentivize performance by allowing the contractor to earn an award fee based on meeting or exceeding pre-defined performance objectives. For this $8.52 billion contract, NASA must establish clear, measurable, and achievable performance metrics. Effective oversight is crucial to ensure that the award fee truly reflects superior performance and not just the fulfillment of basic contract requirements. Without rigorous monitoring and objective evaluation of performance against these metrics, the CPAFF could lead to inflated costs without commensurate gains in operational efficiency or scientific advancement.
What are the primary risks associated with awarding a large, long-term contract like SPOC as a follow-on to a competed action, particularly regarding potential price escalation?
The primary risk of a follow-on contract, even if preceded by competition, is the potential for reduced competitive pressure, leading to price escalation over time. United Space Alliance, as the incumbent or sole awardee, may have significant leverage. Risks include the contractor's ability to influence future pricing, potential for scope creep without adequate cost controls, and the possibility that the initial competition did not fully capture the long-term cost efficiencies. NASA must implement strong cost control measures and re-evaluate pricing periodically to mitigate these risks.
How does the specialized nature of 'Space Program Operations' impact the ability to benchmark this contract's value and performance against other government R&D contracts?
Benchmarking this 'Space Program Operations Contract' (SPOC) is exceptionally challenging due to its highly specialized nature. Space operations involve unique technical requirements, extensive infrastructure, and long-term mission objectives that differ significantly from typical R&D projects. Factors like mission criticality, safety standards, and the pace of technological advancement in space create a distinct cost structure. Consequently, direct comparisons with other R&D contracts in fields like biotechnology or materials science may not accurately reflect the value or efficiency of this NASA contract.
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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FOLLOW ON TO COMPETED ACTION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 600 GEMINI ST, HOUSTON, TX, 77058
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $8,915,184,850
Exercised Options: $8,915,184,850
Current Obligation: $8,520,322,214
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2006-10-01
Current End Date: 2013-09-30
Potential End Date: 2015-09-30 00:00:00
Last Modified: 2020-01-14
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