DoD's $20.3M Contract for Bow & Stern Sections Dismantled Raises Questions on Value and Competition
Contract Overview
Contract Amount: $20,302,046 ($20.3M)
Contractor: Production Association North Machinebuilding Enterprise FED
Awarding Agency: Department of Defense
Start Date: 2004-09-30
End Date: 2008-10-31
Contract Duration: 1,492 days
Daily Burn Rate: $13.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: BOW & STERN SECTIONS DISMANTLED
Plain-Language Summary
Department of Defense obligated $20.3 million to PRODUCTION ASSOCIATION NORTH MACHINEBUILDING ENTERPRISE FED for work described as: BOW & STERN SECTIONS DISMANTLED Key points: 1. The contract awarded to PRODUCTION ASSOCIATION NORTH MACHINEBUILDING ENTERPRISE FED for $20.3M lacks clear justification for its necessity. 2. Limited competition is a significant concern, as the contract was not available for competitive bidding. 3. The fixed-price contract type offers some cost control, but the lack of competition hinders price discovery. 4. The sector is Defense, specifically for the Defense Threat Reduction Agency, indicating a specialized need.
Value Assessment
Rating: questionable
The total award amount of $20.3M for dismantling bow and stern sections is substantial. Without details on the scope of work or the condition of the sections, it's difficult to benchmark against similar contracts. The lack of competition further complicates a fair value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was explicitly stated as 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source or limited competition award. This significantly restricts price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The absence of competition for a $20.3M contract means taxpayers may have paid a premium compared to what a competitive bidding process might have yielded.
Public Impact
Taxpayers may have overpaid due to the lack of competitive bidding on this significant defense contract. The necessity and value of dismantling these specific ship sections warrant further scrutiny. The long contract duration (over 4 years) for dismantling work raises questions about efficiency and planning.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Unclear Value Proposition
- Extended Contract Duration
Positive Signals
- Firm Fixed Price Contract Type
Sector Analysis
This contract falls within the Defense sector, specifically related to the dismantling of naval components. Spending benchmarks in this niche area are hard to establish without more context on the specific vessels or materials involved.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award went to a specific named enterprise.
Oversight & Accountability
The lack of competition and the substantial value of this contract suggest a need for enhanced oversight to ensure that taxpayer funds were used efficiently and effectively. Further review of the justification for sole-sourcing is recommended.
Related Government Programs
- International Affairs
- Department of Defense Contracting
- Defense Threat Reduction Agency Programs
Risk Flags
- Lack of competitive bidding raises concerns about price fairness.
- The necessity and value of the service are not clearly defined.
- Extended contract duration for dismantling work may indicate inefficiencies.
- Potential for taxpayer overpayment due to non-competitive award.
Tags
international-affairs, department-of-defense, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.3 million to PRODUCTION ASSOCIATION NORTH MACHINEBUILDING ENTERPRISE FED. BOW & STERN SECTIONS DISMANTLED
Who is the contractor on this award?
The obligated recipient is PRODUCTION ASSOCIATION NORTH MACHINEBUILDING ENTERPRISE FED.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Threat Reduction Agency).
What is the total obligated amount?
The obligated amount is $20.3 million.
What is the period of performance?
Start: 2004-09-30. End: 2008-10-31.
What was the specific justification for awarding this contract on a non-competitive basis, and what steps were taken to ensure the best possible price was obtained?
The data explicitly states the contract was 'NOT AVAILABLE FOR COMPETITION.' This implies a sole-source award. Without further documentation, it's impossible to know the specific justification (e.g., unique capabilities, urgent need). Standard procedures for sole-source procurements typically involve price analysis and negotiation, but the effectiveness of these in achieving best value is questionable without competition.
How was the necessity and value of dismantling these specific bow and stern sections determined to justify a $20.3 million expenditure?
The provided data does not detail the justification for the necessity or the value assessment of dismantling the bow and stern sections. A $20.3 million price tag for dismantling suggests significant complexity, size, or hazardous material handling. Without a breakdown of costs or a comparison to alternative disposal methods, the value proposition remains unclear and warrants further investigation.
Given the contract's duration of nearly four years, what measures were in place to ensure efficient execution and prevent cost overruns or delays?
The contract spanned 1492 days (approximately 4 years), from September 30, 2004, to October 31, 2008. While the contract type is Firm Fixed Price, which shifts cost overrun risk to the contractor, the extended duration for dismantling work raises questions about project management and potential inefficiencies. Oversight would be crucial to monitor progress and ensure timely completion within the agreed price.
Industry Classification
NAICS: Public Administration › National Security and International Affairs › International Affairs
Product/Service Code: SALVAGE SERVICES › DEMOLITION OF NONBUILDING FACILITY
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Opytny Zavod Luch OAO (UEI: 534821137)
Address: 58 ARKHANGELSKOE SHOSSE, SEVERODVINSK
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $20,302,046
Exercised Options: $20,302,046
Current Obligation: $20,302,046
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2004-09-30
Current End Date: 2008-10-31
Potential End Date: 2008-10-31 00:00:00
Last Modified: 2009-09-18
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