DoD's $241M contract with Huntington Ingalls Inc. for shipbuilding services raises questions about value and competition

Contract Overview

Contract Amount: $241,152,947 ($241.2M)

Contractor: Huntington Ingalls Inc

Awarding Agency: Department of Defense

Start Date: 2000-03-31

End Date: 2003-05-07

Contract Duration: 1,132 days

Daily Burn Rate: $213.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $241.2 million to HUNTINGTON INGALLS INC for work described as: Key points: 1. The contract's large value of $241M warrants scrutiny for cost-effectiveness. 2. A 'NOT COMPETED' award suggests limited market exploration and potential for higher prices. 3. The Cost Plus Fixed Fee (CPFF) structure can incentivize cost overruns. 4. Shipbuilding is a critical sector with significant taxpayer investment.

Value Assessment

Rating: questionable

The $241M award, using a Cost Plus Fixed Fee structure, offers limited insight into pricing benchmarks without further detail on the specific services rendered. Comparison to similar shipbuilding contracts is difficult without more granular data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

Awarded as 'NOT COMPETED', this contract bypassed competitive bidding processes. This lack of competition limits price discovery and may result in less favorable terms for the government.

Taxpayer Impact: The absence of competition could lead to higher costs for taxpayers compared to a competitively bid contract.

Public Impact

Taxpayers may be paying more than necessary due to the lack of competition. The long-term implications for shipbuilding costs and innovation are unclear. Oversight is crucial to ensure the fixed fee aligns with performance and value.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee structure
Potential for cost overruns

Positive Signals

Definitive contract provides long-term relationship
Fixed fee provides some cost certainty

Sector Analysis

The shipbuilding sector is capital-intensive and often involves complex, long-term contracts. Government spending benchmarks in this area are typically high due to specialized labor and materials.

Small Business Impact

No information is provided regarding small business participation in this contract. The prime contractor, Huntington Ingalls Inc., is a large entity, suggesting limited direct opportunities for small businesses.

Oversight & Accountability

The 'NOT COMPETED' nature of this award necessitates robust oversight to ensure the government receives fair value and that the contractor meets all performance requirements within the agreed-upon fixed fee.

Related Government Programs

Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Cost Plus Fixed Fee structure
Lack of detailed service description
Potential for cost overruns
Limited transparency on justification for non-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $241.2 million to HUNTINGTON INGALLS INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $241.2 million.

What is the period of performance?

Start: 2000-03-31. End: 2003-05-07.

What specific shipbuilding services were procured under this contract, and how do they align with the Department of the Navy's strategic needs?

The contract details are limited, but it was awarded to Huntington Ingalls Inc. for shipbuilding services. Without specific service descriptions, it's challenging to assess strategic alignment. Further investigation into the Statement of Work (SOW) is required to understand the precise nature of the work and its contribution to naval capabilities.

What justification was provided for not competing this contract, and were alternative sources considered?

The data indicates the contract was 'NOT COMPETED'. Typically, sole-source awards require a justification, such as a unique capability or urgent need. The absence of competition raises concerns about whether the government explored all viable options to secure the best value and price for these shipbuilding services.

How does the Cost Plus Fixed Fee structure impact cost control and contractor performance in this specific shipbuilding context?

The Cost Plus Fixed Fee (CPFF) structure aims to provide cost certainty by adding a fixed fee to allowable costs. However, it can incentivize contractors to incur higher costs to increase the base for the fee, potentially leading to cost overruns. Effective oversight is critical to manage this risk and ensure the fixed fee remains appropriate for the work performed.

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: Huntington Ingalls Industries, Inc

Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline