DoD awards $309M contract to Huntington Ingalls for engineering services, raising concerns about competition
Contract Overview
Contract Amount: $30,934,721 ($30.9M)
Contractor: Huntington Ingalls Inc
Awarding Agency: Department of Defense
Start Date: 2002-10-01
End Date: 2006-09-30
Contract Duration: 1,460 days
Daily Burn Rate: $21.2K/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 $30.9 million to HUNTINGTON INGALLS INC for work described as: Key points: 1. Significant contract value of $309M awarded to a single large business. 2. Lack of competition raises questions about price discovery and potential overspending. 3. Engineering services sector is critical but requires careful oversight for cost-effectiveness. 4. Long contract duration (2002-2006) suggests a sustained need, but initial award method is key.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. Without competitive bidding, it's difficult to assess if the $309M price represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was 'NOT COMPETED', indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a large contract like this suggests taxpayers may not be receiving the best possible price for engineering services.
Public Impact
Taxpayers may be paying more than necessary due to the absence of competitive bidding. The long-term nature of the contract could lock in potentially inflated costs. Lack of transparency in the award process can erode public trust in government spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
- Long contract duration
Positive Signals
- Awarded to a known entity (Huntington Ingalls)
- Contract addresses a specific need (engineering services)
Sector Analysis
Engineering services are vital for defense projects, but the $309M value for this contract is substantial. Benchmarks for similar sole-source engineering contracts are needed for comparison.
Small Business Impact
The contract was awarded to Huntington Ingalls Inc., a large business, and there is no indication of small business participation. This represents a missed opportunity for small business engagement.
Oversight & Accountability
The 'NOT COMPETED' status and sole-source nature of this award warrant further investigation into the justification for not seeking competitive bids. Oversight is needed to ensure the fixed fee was appropriate.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Sole-source award justification
- Potential for cost overruns (CPFF)
- Limited small business participation
- Long contract duration without competitive re-evaluation
Tags
engineering-services, department-of-defense, va, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.9 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 $30.9 million.
What is the period of performance?
Start: 2002-10-01. End: 2006-09-30.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The provided data indicates the contract was 'NOT COMPETED'. A thorough review would require access to the contract file to understand the specific justification, such as a critical need, lack of qualified sources, or national security implications. Without this information, it's impossible to assess if competitive strategies were adequately explored or if a sole-source award was truly the only viable option.
How does the Cost Plus Fixed Fee structure impact cost control and contractor performance in this specific engineering services context?
Cost Plus Fixed Fee contracts can be challenging for cost control as the contractor is reimbursed for actual costs plus a fixed fee. This can incentivize higher spending if not managed rigorously. For engineering services, the effectiveness depends heavily on clear scope definition and robust government oversight to ensure efficiency and prevent unnecessary costs from inflating the final price beyond the fixed fee's intended limit.
What is the long-term value proposition of this $309M sole-source contract for the Department of the Navy, considering its duration and lack of competition?
The long-term value is questionable due to the sole-source nature and contract type. While Huntington Ingalls is a significant defense contractor, the absence of competition means the Navy may not have secured the most cost-effective solution. The value hinges on the criticality of the services and the government's ability to manage costs effectively within the CPFF structure over the contract's lifespan.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
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 (UEI: 967362331)
Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 03
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2002-10-01
Current End Date: 2006-09-30
Potential End Date: 2006-09-30 00:00:00
Last Modified: 2015-03-03
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