Navy Awards $770M Engineering Services Contract to Electric Boat Corp. for Submarine Support
Contract Overview
Contract Amount: $77,021,457 ($77.0M)
Contractor: Electric Boat Corporation
Awarding Agency: Department of Defense
Start Date: 2001-10-18
End Date: 2011-09-07
Contract Duration: 3,611 days
Daily Burn Rate: $21.3K/day
Competition Type: FOLLOW ON TO COMPETED ACTION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Place of Performance
Location: GROTON, NEW LONDON County, CONNECTICUT, 06340
Plain-Language Summary
Department of Defense obligated $77.0 million to ELECTRIC BOAT CORPORATION for work described as: Key points: 1. Significant contract value of $770.2 million awarded to a single, established contractor. 2. Follow-on action suggests potential for limited competition or established relationship. 3. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored. 4. Engineering services sector is critical for complex defense projects like submarine maintenance.
Value Assessment
Rating: fair
The contract is a follow-on to a competed action, indicating some prior competition. However, the cost-plus-fixed-fee structure requires careful oversight to ensure fair pricing and prevent excessive costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
The contract is a 'FOLLOW ON TO COMPETED ACTION,' which implies previous competition but doesn't specify the current competition method. This could range from full and open to a limited competition, impacting price discovery.
Taxpayer Impact: The taxpayer impact depends on the level of competition achieved and the effectiveness of cost controls within the cost-plus-fixed-fee structure.
Public Impact
Supports critical naval infrastructure and national security through submarine maintenance. Ensures continued operation and modernization of the submarine fleet. Impacts the defense industrial base, particularly in shipbuilding and engineering services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure can lead to higher costs if not managed effectively.
- Follow-on action may indicate reduced competition, potentially impacting price.
- Long duration of the contract (over 9 years) increases risk of cost escalation.
Positive Signals
- Awarded to a known contractor with likely relevant expertise.
- Supports a critical national defense asset (submarines).
- Follow-on action suggests a successful prior relationship or outcome.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting complex defense systems. Benchmarks for similar large-scale, long-term defense engineering contracts are highly variable but typically represent significant investments.
Small Business Impact
No specific information is provided regarding small business participation. As a follow-on action to a large prime contractor, direct subcontracting opportunities for small businesses may exist but are not detailed here.
Oversight & Accountability
The cost-plus-fixed-fee contract type necessitates robust oversight from the Department of the Navy to manage costs, ensure performance, and prevent contractor inefficiencies. Audits and performance reviews are crucial.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost Overruns Risk (CPFF structure)
- Limited Competition Risk (Follow-on action)
- Long Contract Duration Risk
- Contractor Performance Risk
Tags
engineering-services, department-of-defense, ct, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $77.0 million to ELECTRIC BOAT CORPORATION. See the official description on USAspending.
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 $77.0 million.
What is the period of performance?
Start: 2001-10-18. End: 2011-09-07.
What was the competitive landscape for the original competed action, and how did that influence the pricing for this follow-on contract?
Understanding the original competition is key to assessing the value of this follow-on award. If the initial competition was robust, the follow-on pricing might be considered fair, assuming reasonable adjustments for scope changes. However, if the original competition was limited, or if this is a sole-source follow-on, the lack of competitive pressure could lead to less favorable pricing for the government and taxpayers.
What specific mechanisms are in place to mitigate cost overruns inherent in a Cost Plus Fixed Fee (CPFF) contract for such a long duration?
Effective mitigation of cost overruns in a CPFF contract requires stringent government oversight. This includes detailed cost tracking, regular performance reviews against milestones, clear definition of fixed-fee scope, and potentially incentive clauses tied to cost savings or performance targets. Independent cost estimates and audits are also vital to ensure the government is not overpaying for services rendered over the contract's extended period.
How does the performance history of Electric Boat Corporation on similar contracts inform the risk assessment for this $770 million award?
Electric Boat Corporation's track record on previous submarine-related engineering and maintenance contracts is a critical factor in assessing risk. A history of successful, on-time, and within-budget performance would indicate lower risk. Conversely, past issues with cost overruns, schedule delays, or quality control would raise concerns and necessitate closer scrutiny of contract management and oversight to ensure this large award delivers expected value.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FOLLOW ON TO COMPETED ACTION
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: General Dynamics Corp (UEI: 001381284)
Address: 75 EASTERN POINT RD, GROTON, CT, 02
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2001-10-18
Current End Date: 2011-09-07
Potential End Date: 2011-09-07 00:00:00
Last Modified: 2011-09-07
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