Navy awards $96.3M contract for submarine nuclear management support to Electric Boat Corporation

Contract Overview

Contract Amount: $53,968,817 ($54.0M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2001-09-27

End Date: 2013-01-25

Contract Duration: 4,138 days

Daily Burn Rate: $13.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200112!018802!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002401C2900 !A!N!*!Y!P00007 !20010927!20010930!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !+000000135000!N!N!000000000000!AG56!RDTE/ENERGY - NUCLEAR - MANAGEMENT SUPPORT !A3 !SHIPS !2SDN!SUBMARINE NUCLEAR-SSN !336611!*!*!3! ! ! !*!*!*!B!*!*!A! !D !N!U!1!001!N!3A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $54.0 million to ELECTRIC BOAT CORPORATION for work described as: 200112!018802!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002401C2900 !A!N!*!Y!P00007 !20010927!20010930!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW L… Key points: 1. Contract awarded for critical nuclear management support services for submarines. 2. Electric Boat Corporation, a long-standing defense contractor, secured this award. 3. The contract duration is substantial, indicating a long-term need for these services. 4. The award was not competed, raising questions about potential cost efficiencies. 5. The specific services relate to the management of nuclear energy within naval platforms. 6. This contract falls under the broader category of shipbuilding and repair.

Value Assessment

Rating: fair

The awarded amount of $96.3 million for submarine nuclear management support appears to be a significant investment. Without direct comparable contracts for the exact same scope and duration, it's challenging to definitively benchmark value. However, given the specialized nature of nuclear management and the sole-source award, the pricing warrants scrutiny to ensure it reflects fair market value for the services rendered. The contract type (Cost Plus Fixed Fee) can sometimes lead to higher costs if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential bidders. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates a direct award. The lack of competition means that the Navy did not benefit from the price discovery mechanisms that typically occur in a competitive bidding process, potentially leading to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards limit the opportunity for competitive pricing, which could result in taxpayers paying a premium for these specialized services.

Public Impact

The primary beneficiaries are the U.S. Navy's submarine fleet, ensuring operational readiness and safety. Services delivered include essential management support for nuclear energy systems on submarines. The geographic impact is national, supporting naval operations across various locations. Workforce implications include the continued employment of specialized personnel at Electric Boat Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Cost-plus contract type can incentivize higher spending if not closely monitored.
Long contract duration requires sustained oversight to ensure performance and value.

Positive Signals

Award to a contractor with established expertise in nuclear systems.
Contract supports critical national defense capabilities.
Long-term award suggests a stable and predictable need for these services.

Sector Analysis

This contract falls within the Defense sector, specifically supporting naval operations and shipbuilding. The market for nuclear management support for submarines is highly specialized, with a limited number of contractors possessing the necessary security clearances and technical expertise. Electric Boat Corporation is a key player in this niche. Comparable spending benchmarks would likely be found within other large, complex naval platform support contracts, often running into hundreds of millions or billions of dollars over their lifecycle.

Small Business Impact

There is no indication of a small business set-aside for this contract. Given the highly specialized nature of nuclear management for submarines, it is unlikely that small businesses would possess the required capabilities or security clearances to compete for or perform such work. Subcontracting opportunities for small businesses may exist in ancillary support roles, but the core service is likely to be performed by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Sea Systems Command (NAVSEA). Accountability measures would be embedded within the contract's performance work statement and reporting requirements. Transparency may be limited due to the sensitive nature of nuclear operations and the sole-source award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Submarine Maintenance and Modernization
Naval Nuclear Propulsion Program
Defense Contract Management Agency
Shipbuilding and Repair Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus contract type may lead to cost overruns.
Long contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.0 million to ELECTRIC BOAT CORPORATION. 200112!018802!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002401C2900 !A!N!*!Y!P00007 !20010927!20010930!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !+000000135000!N!N!000000000000!AG56!RDTE/ENERGY - NUCLEAR - MANAGEMENT SUPPORT !A3 !SHIPS !2SDN!SUBMARINE NUCLEAR-SSN !336611!*!*!3! ! ! !*!*!*!B!*!*!A!

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 $54.0 million.

What is the period of performance?

Start: 2001-09-27. End: 2013-01-25.

What is the track record of Electric Boat Corporation in managing nuclear systems for the Navy?

Electric Boat Corporation (EBC) has a long and established history as a primary builder and maintainer of U.S. Navy submarines, including those powered by nuclear reactors. For decades, EBC has been responsible for the construction, overhaul, refueling, and complex maintenance of nuclear-powered submarines. Their expertise is deeply rooted in managing the intricate systems associated with naval nuclear propulsion, adhering to stringent safety and operational protocols set by naval nuclear propulsion programs. This extensive experience positions them as a uniquely qualified entity for contracts involving the management of these critical systems, often leading to sole-source awards due to the specialized knowledge and security clearances required.

How does the value of this contract compare to similar nuclear management support contracts?

Direct comparisons for 'submarine nuclear management support' are difficult due to the highly specialized and often classified nature of the work, as well as the unique configurations of different submarine classes. However, contracts for the construction, maintenance, and modernization of nuclear-powered submarines typically represent multi-billion dollar investments over their lifecycles. This $96.3 million award, while substantial, likely represents a specific segment of the overall lifecycle support for nuclear submarines, such as ongoing operational management, technical support, or specific system upgrades, rather than the full construction or overhaul.

What are the primary risks associated with a sole-source award for nuclear management services?

The primary risk associated with a sole-source award for nuclear management services is the potential for reduced cost efficiency. Without competitive bidding, there is less market pressure on the contractor to offer the lowest possible price. This can lead to taxpayers potentially overpaying for the services. Additionally, a sole-source award can limit opportunities for innovation that might arise from a competitive environment. There's also a risk of complacency from the awarded contractor, although this is often mitigated by strong contract oversight and performance metrics. Ensuring robust oversight and clear performance standards becomes even more critical in sole-source situations.

How effective is the Cost Plus Fixed Fee (CPFF) contract type for managing nuclear systems?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex services where the scope of work is not precisely defined at the outset, or where significant uncertainties exist. For nuclear management, it allows the contractor to be reimbursed for allowable costs plus a predetermined fixed fee representing profit. While it provides flexibility, it can incentivize the contractor to incur higher costs to increase the base upon which the fixed fee is calculated, potentially leading to cost overruns if not managed diligently. Effective oversight, detailed cost tracking, and clear definition of the 'fixed fee' are crucial to mitigate these risks and ensure value for money.

What is the historical spending pattern for submarine nuclear management support by the Department of the Navy?

Historical spending by the Department of the Navy on submarine nuclear management support has been consistently high, reflecting the immense cost and complexity of maintaining a nuclear-powered submarine fleet. This spending is distributed across various contract types and durations, encompassing new construction, major overhauls, refueling, routine maintenance, and specialized technical support. Electric Boat Corporation and Huntington Ingalls Industries (Newport News Shipbuilding) are the primary recipients of such contracts. Annual spending can fluctuate based on the lifecycle stage of the submarine fleet, with significant outlays occurring during periods of new construction or major modernization programs.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › Energy R&D Services

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, 02

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline