DoD's $352M contract for shipbuilding and repair services awarded to Conrad Orange Shipyard, Inc. shows strong competition

Contract Overview

Contract Amount: $35,212,922 ($35.2M)

Contractor: Conrad Orange Shipyard, Inc.

Awarding Agency: Department of Defense

Start Date: 2002-09-27

End Date: 2008-08-04

Contract Duration: 2,138 days

Daily Burn Rate: $16.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE

Sector: Defense

Official Description: 200212!000294!96CE!CW61 !USA ENGINEER DISTRICT PHILADELPH!DACW6102C0060 !A!N! !N! !20020927!20051017!069646644!069646644!008172785!N!ORANGE SHIPBUILDING CO , INC !710 MARKET STREET !ORANGE !TX!77631!54132!361!48!ORANGE !ORANGE !TEXAS !+000016613872!N!N!000000000000!1921!TUGS AND TOWBOATS !A3 !SHIPS !5000!NOT DISCERNABLE OR CLASSIFIED !111110!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!003!B! !Z!N!Z! ! !N!B!N!N! ! !Z! !A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: ORANGE, ORANGE County, TEXAS, 77631

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $35.2 million to CONRAD ORANGE SHIPYARD, INC. for work described as: 200212!000294!96CE!CW61 !USA ENGINEER DISTRICT PHILADELPH!DACW6102C0060 !A!N! !N! !20020927!20051017!069646644!069646644!008172785!N!ORANGE SHIPBUILDING CO , INC !710 MARKET STREET !ORANGE !TX!77631!54132!361!48!ORANGE !ORANG… Key points: 1. The contract was awarded under full and open competition, indicating a robust bidding process. 2. The fixed-price contract type suggests predictable costs for the government. 3. The duration of the contract (over 5 years) implies a significant, long-term need for these services. 4. The award to a single contractor, Conrad Orange Shipyard, Inc., warrants a closer look at the competitive landscape. 5. The North American Industry Classification System (NAICS) code 336611 points to the shipbuilding and repair sector.

Value Assessment

Rating: good

The total value of this contract is $352,129,219.60. Benchmarking this against similar shipbuilding and repair contracts would require access to a broader dataset of comparable awards. However, the fixed-price nature of the contract is generally favorable for cost control. The contract was awarded to Conrad Orange Shipyard, Inc., and further analysis would involve assessing their performance and pricing relative to industry standards and other potential bidders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified bidders were likely solicited and considered. The presence of multiple bidders generally leads to more competitive pricing as contractors vie for the award. The specific number of bids received is not detailed in the provided data, but the 'full and open' designation implies a significant level of competition.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government receives the best value for its investment in shipbuilding and repair services.

Public Impact

The primary beneficiaries of this contract are the U.S. Navy and potentially other Department of Defense entities requiring shipbuilding and repair services. The services delivered include the construction, repair, and maintenance of ships and related maritime assets. The geographic impact is centered around the contractor's location in Orange, Texas, and potentially extends to naval bases or operational areas where the serviced vessels are deployed. This contract supports jobs within the shipbuilding and repair industry, likely benefiting skilled labor in the Orange, Texas region and associated supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in if competition was limited to a few key players.
Risk of cost overruns if the fixed-price contract does not adequately account for unforeseen complexities in shipbuilding.
Dependence on a single contractor could lead to supply chain vulnerabilities if the contractor faces operational issues.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Fixed-price contract type provides cost certainty for the government.
Long contract duration indicates a sustained need and potential for stable workload for the contractor.

Sector Analysis

The shipbuilding and repair sector is a critical component of national defense and maritime commerce. This contract falls under NAICS code 336611, which covers establishments primarily engaged in building, repairing, and converting ships and barges. The market is characterized by high capital investment, specialized labor, and stringent regulatory requirements. Comparable spending benchmarks would involve analyzing other large-scale shipbuilding and repair contracts awarded by the Department of Defense or the U.S. Coast Guard.

Small Business Impact

The data indicates this contract was awarded under 'full and open competition' and does not specify any small business set-aside provisions. Therefore, it is unlikely that small businesses were specifically targeted for this award. However, the prime contractor, Conrad Orange Shipyard, Inc., may engage small businesses as subcontractors for specialized services or materials, contributing to the broader small business ecosystem within the defense industrial base.

Oversight & Accountability

Oversight for this Department of Defense contract would typically be managed by the contracting agency (Department of the Army) and potentially involve program managers, quality assurance representatives, and contract specialists. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval shipbuilding programs
Ship repair and maintenance contracts
Defense logistics and supply chain management
Maritime industry support contracts

Risk Flags

Potential for scope creep if contract modifications are frequent.
Dependence on specific skilled labor within the shipbuilding industry.
Vulnerability to fluctuations in raw material costs.
Ensuring compliance with environmental and safety regulations in shipbuilding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.2 million to CONRAD ORANGE SHIPYARD, INC.. 200212!000294!96CE!CW61 !USA ENGINEER DISTRICT PHILADELPH!DACW6102C0060 !A!N! !N! !20020927!20051017!069646644!069646644!008172785!N!ORANGE SHIPBUILDING CO , INC !710 MARKET STREET !ORANGE !TX!77631!54132!361!48!ORANGE !ORANGE !TEXAS !+000016613872!N!N!000000000000!1921!TUGS AND TOWBOATS !A3 !SHIPS !5000!NOT DISCERNABLE OR CLASSIFIED !111110!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is CONRAD ORANGE SHIPYARD, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $35.2 million.

What is the period of performance?

Start: 2002-09-27. End: 2008-08-04.

What is the track record of Conrad Orange Shipyard, Inc. in fulfilling government contracts, particularly within the shipbuilding and repair sector?

A comprehensive review of Conrad Orange Shipyard, Inc.'s track record would involve examining past contract performance data, including on-time delivery, quality of work, and any instances of disputes or contract modifications. Information from sources like the Contractor Performance Assessment Reporting System (CPARS) would be crucial. Without access to this specific data, it's difficult to definitively assess their past performance. However, securing a contract of this magnitude from the Department of Defense suggests a certain level of capability and experience, though it does not guarantee flawless execution on this particular award.

How does the awarded price of $352 million compare to the estimated value or budget for this shipbuilding and repair requirement?

The provided data lists the 'Award Amount' as $35,212,921.96, which appears to be a partial or initial award amount, given the contract's total value is stated as $352,129,219.60. To compare this to the estimated value or budget, we would need access to the government's pre-solicitation estimate or the contract's ceiling value if it differs significantly from the award amount. The difference between the initial award and the total value suggests potential for future task orders or modifications. A detailed comparison would require access to the government's cost estimates and the contract's full financial structure.

What are the key performance indicators (KPIs) and risk mitigation strategies associated with this shipbuilding and repair contract?

Key performance indicators for a shipbuilding and repair contract typically include adherence to delivery schedules, quality of workmanship (e.g., meeting specifications, defect rates), safety compliance, and cost control within the fixed-price framework. Risk mitigation strategies would likely involve detailed project management plans, rigorous quality assurance inspections at various stages of work, contingency planning for material or labor shortages, and clear communication protocols between the contractor and the government. The fixed-price nature itself acts as a risk mitigation tool for the government by capping costs, provided the scope is well-defined.

What is the historical spending pattern for similar shipbuilding and repair services by the Department of Defense or the U.S. Army?

Historical spending on shipbuilding and repair services by the Department of Defense (DoD) and the U.S. Army is substantial, reflecting the significant maintenance and construction needs of the naval fleet and other maritime assets. Analyzing past FPDS data would reveal trends in contract values, types of services procured (e.g., new construction, routine maintenance, major overhauls), and the primary contractors awarded these agreements. Spending can fluctuate based on geopolitical events, fleet readiness requirements, and budget allocations. This specific contract's value of over $350 million is significant but should be viewed within the context of the DoD's overall shipbuilding and repair budget, which can run into billions annually.

How does the competition level for this contract (full and open) typically influence pricing and contractor performance compared to sole-source or limited competition awards?

Full and open competition generally leads to more competitive pricing as a wider pool of contractors can bid, driving down costs through market forces. This increased competition often incentivizes contractors to perform at a higher level to secure the award and maintain a positive performance record for future opportunities. In contrast, sole-source or limited competition awards may result in higher prices and potentially less pressure on the contractor to optimize performance, as the options for the government are restricted. Therefore, the 'full and open' designation for this contract suggests a favorable environment for achieving both cost efficiency and strong contractor performance.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: FIXED PRICE (J)

Contractor Details

Parent Company: Conrad Industries, Inc. (UEI: 008172785)

Address: 710 MARKET STREET, ORANGE, TX, 77631

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline