Navy Awards $1.67 Billion for Trade Support Services to Electric Boat Corporation
Contract Overview
Contract Amount: $16,720,684 ($16.7M)
Contractor: Electric Boat Corporation
Awarding Agency: Department of Defense
Start Date: 2010-09-10
End Date: 2015-09-28
Contract Duration: 1,844 days
Daily Burn Rate: $9.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: TRADE SUPPORT SERVICES FOR PNSY; PROVIDE
Place of Performance
Location: PORTSMOUTH, ROCKINGHAM County, NEW HAMPSHIRE, 03804, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $16.7 million to ELECTRIC BOAT CORPORATION for work described as: TRADE SUPPORT SERVICES FOR PNSY; PROVIDE Key points: 1. The contract value of $1.67 billion represents a significant investment in shipbuilding and repair. 2. Sole-source award to Electric Boat Corporation limits competitive pricing opportunities. 3. The 'COST PLUS FIXED FEE' contract type carries inherent cost escalation risks. 4. Spending in the Ship Building and Repairing sector is substantial and critical for national defense.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, coupled with a sole-source award, raises concerns about potential cost overruns and the absence of competitive pressure to achieve optimal pricing. Benchmarking is difficult without comparable sole-source contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Electric Boat Corporation, was considered. This lack of competition likely resulted in a higher price than could have been achieved through a competitive bidding process.
Taxpayer Impact: The absence of competition for a contract of this magnitude means taxpayers may have paid a premium, as there was no market pressure to drive down costs.
Public Impact
Significant taxpayer funds allocated to a single contractor for essential defense services. Potential for cost overruns due to the contract type and lack of competition. Impact on the broader shipbuilding and repair market due to a large sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Long contract duration (over 4 years)
Positive Signals
- Essential services for national defense
- Established contractor with relevant experience
Sector Analysis
The shipbuilding and repairing sector (NAICS 336611) is capital-intensive and critical for national security. Spending in this sector is often characterized by large, long-term contracts, frequently with sole-source awards due to specialized capabilities.
Small Business Impact
This contract was awarded to a large corporation, Electric Boat Corporation, and there is no indication of subcontracting opportunities for small businesses within the provided data. The nature of this specialized defense work may limit small business involvement.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny regarding the justification for not pursuing a competitive process. Oversight should focus on cost control and performance monitoring to ensure value for taxpayer money.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Cost-plus-fixed-fee contract type poses cost overrun risk.
- Long contract duration increases exposure to changing economic conditions.
- Lack of transparency regarding justification for sole-source award.
- Potential for inefficient resource allocation without competitive pressure.
Tags
ship-building-and-repairing, department-of-defense, nh, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.7 million to ELECTRIC BOAT CORPORATION. TRADE SUPPORT SERVICES FOR PNSY; PROVIDE
Who is the contractor on this award?
The obligated recipient is ELECTRIC BOAT CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $16.7 million.
What is the period of performance?
Start: 2010-09-10. End: 2015-09-28.
What was the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis?
The justification for a sole-source award typically centers on the unique capabilities of the contractor, the urgency of the requirement, or the unavailability of other sources. For Electric Boat Corporation, this likely relates to their specialized expertise in submarine construction and repair, a highly complex and sensitive area of defense.
How does the 'COST PLUS FIXED FEE' structure compare to other contract types in terms of potential cost overruns for shipbuilding?
Cost-plus-fixed-fee contracts allow the contractor to recover all allowable costs plus a predetermined fixed fee. While providing incentive for cost control, they can lead to overruns if costs exceed projections, especially in complex projects like shipbuilding where unforeseen issues are common. Other types like fixed-price contracts offer more cost certainty but may deter innovation or require higher initial bids.
What mechanisms are in place to ensure the effectiveness and efficiency of trade support services provided by Electric Boat Corporation under this contract?
Effectiveness and efficiency are typically ensured through performance metrics, milestones, and regular reporting requirements outlined in the contract. The Department of the Navy would likely have program managers and contracting officers responsible for monitoring progress, quality, and adherence to the contract terms, potentially including site visits and technical reviews.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 75 EASTERN POINT RD, GROTON, CT, 06340
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $18,200,452
Exercised Options: $18,200,452
Current Obligation: $16,720,684
Contract Characteristics
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0002410G4314
IDV Type: BOA
Timeline
Start Date: 2010-09-10
Current End Date: 2015-09-28
Potential End Date: 2015-09-28 00:00:00
Last Modified: 2016-05-05
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