Navy Awards $963M Contract to Electric Boat for Submarine Modification Services

Contract Overview

Contract Amount: $1,227,262,715 ($1.2B)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2002-09-26

End Date: 2014-11-25

Contract Duration: 4,443 days

Daily Burn Rate: $276.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200212!026235!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002402C2901 !A!N! !N! !20020926!20071231!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !+000079067124!N!N!000554224422!K019!MODIFICATION OF EQ/SHIPS-SML CRAFT-DOCKS !A3 !SHIPS !2SDJ!SUBMARINE GUIDED MISSILE-SSG !541490!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!U!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340, UNITED STATES OF AMERICA

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $1.23 billion to ELECTRIC BOAT CORPORATION for work described as: 200212!026235!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002402C2901 !A!N! !N! !20020926!20071231!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !+000079067124!N!N!000554224422!K019!MODIFICATION… Key points: 1. The contract value is substantial at $963,737,366. 2. Electric Boat Corporation is the sole awardee, indicating a lack of competition. 3. The contract type is Cost Plus Fixed Fee, which can carry cost overrun risks. 4. The sector is primarily defense, specifically shipbuilding and repair.

Value Assessment

Rating: fair

The contract value of $963,737,366 for submarine modification services appears significant. Benchmarking against similar specialized naval engineering contracts would be necessary to fully assess its pricing reasonableness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition on this large contract may result in taxpayers paying more than if multiple bids were solicited.

Public Impact

Impacts national security through the maintenance and modification of critical submarine assets. Supports a major defense contractor and its supply chain, potentially preserving jobs. Raises questions about the efficiency of sole-source procurements in the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type can incentivize cost overruns.
Long contract duration (2002-2014) may not reflect current market conditions.

Positive Signals

Award to a known, specialized provider (Electric Boat).
Contract supports critical defense capabilities.
Potential for long-term relationship and expertise development.

Sector Analysis

This contract falls within the Defense sector, specifically related to specialized design services for ships and submarines. Spending benchmarks in this niche area are often high due to the complexity and security requirements.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this sole-source award. The prime contractor, Electric Boat Corporation, is a large entity.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny regarding the justification for not pursuing competitive bidding. Oversight should focus on ensuring the fixed fee is reasonable and costs are managed effectively.

Related Government Programs

Other Specialized Design Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Cost Plus Fixed Fee contract type
Potential for cost overruns
Long contract duration
Limited transparency due to sole-source nature

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.23 billion to ELECTRIC BOAT CORPORATION. 200212!026235!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002402C2901 !A!N! !N! !20020926!20071231!963737366!963737366!001381284!N!ELECTRIC BOAT CORPORATION !75 EASTERN POINT RD !GROTON !CT!06340!34180!011!09!GROTON !NEW LONDON !CONN !+000079067124!N!N!000554224422!K019!MODIFICATION OF EQ/SHIPS-SML CRAFT-DOCKS !A3 !SHIPS !2SDJ!SUBMARINE GUIDED MISSILE-SSG !541490!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!U!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!

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 $1.23 billion.

What is the period of performance?

Start: 2002-09-26. End: 2014-11-25.

What was the specific justification for awarding this contract on a sole-source basis, and was a full and open competition truly not feasible?

The justification for sole-source awards typically involves unique capabilities, urgent needs, or situations where only one responsible source can provide the required supplies or services. For this contract, the Navy would need to document why Electric Boat Corporation was the only viable option, potentially due to proprietary technology, specialized facilities, or existing integration with the submarine platforms.

How were the costs controlled and validated under the Cost Plus Fixed Fee structure to ensure taxpayer value?

Under a Cost Plus Fixed Fee (CPFF) contract, the government pays the actual costs incurred by the contractor plus a predetermined fixed fee representing profit. Oversight involves rigorous auditing of incurred costs, monitoring contractor performance, and ensuring adherence to the contract's scope. Regular reviews and negotiations of the fixed fee, if applicable, are crucial for managing taxpayer exposure.

Given the contract's long duration (2002-2014), how did the Navy ensure the services remained relevant and cost-effective throughout its lifecycle?

Long-duration contracts often include mechanisms for periodic review, potential re-negotiation of terms, and adjustments for evolving requirements or technological advancements. The Navy likely employed program management reviews and technical assessments to ensure the ongoing relevance and cost-effectiveness of the modifications. However, the extended period also increases the risk of scope creep or outdated pricing if not actively managed.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Specialized Design Services › Other Specialized Design 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)

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 75 EASTERN POINT RD, GROTON, CT, 06340

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline