Navy's $18M Facilities Support Contract Awarded to Electric Boat Corporation Raises Value Questions

Contract Overview

Contract Amount: $18,059,762 ($18.1M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2002-01-31

End Date: 2007-03-10

Contract Duration: 1,864 days

Daily Burn Rate: $9.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $18.1 million to ELECTRIC BOAT CORPORATION for work described as: Key points: 1. The contract's value proposition is unclear due to a lack of competitive bidding. 2. Sole-source awards can limit price discovery and potentially lead to higher costs. 3. The duration of the contract (over 5 years) warrants scrutiny for ongoing value. 4. Performance context is limited without comparison to other facilities support contracts. 5. The contract falls within the broader Defense sector, specifically supporting naval operations. 6. No small business set-aside was indicated, suggesting limited direct impact on small businesses.

Value Assessment

Rating: questionable

The total award amount of $18,059,762 for facilities support services over a period of approximately 5 years (from January 2002 to March 2007) lacks a clear benchmark for value. As a sole-source award, it was not subjected to competitive pricing, making it difficult to assess if the price was fair and reasonable compared to market rates or what other agencies might pay for similar services. Without competitive bids, the government may not have secured the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Electric Boat Corporation, was solicited. This approach bypasses the competitive process, which typically involves soliciting bids from multiple qualified contractors. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities or urgent needs), they inherently limit price competition and may not result in the most cost-effective outcome for the government.

Taxpayer Impact: Sole-source awards mean taxpayers did not benefit from the price reductions typically achieved through competitive bidding, potentially leading to a higher overall cost for these facilities support services.

Public Impact

The primary beneficiary of this contract is the Department of the Navy, ensuring the operational readiness of its facilities. Services provided include essential facilities support, maintaining infrastructure necessary for naval operations. The geographic impact is concentrated in Connecticut, where Electric Boat Corporation is located and likely operates. The contract supports the workforce employed by Electric Boat Corporation in providing these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing.
Long contract duration without competitive re-evaluation could lead to diminishing value.
Sole-source nature limits transparency in pricing and service level agreements.

Positive Signals

Electric Boat Corporation is a known entity within the defense industrial base, suggesting established capabilities.
Facilities support is critical for maintaining operational readiness of naval assets.

Sector Analysis

This contract falls within the broader defense industrial base, specifically supporting the operational infrastructure of the Department of the Navy. Facilities support services are a critical, albeit often overlooked, component of maintaining readiness for military installations and operations. The market for such services is substantial within the defense sector, with numerous contractors capable of providing these essential functions. Benchmarking this specific award is challenging due to its sole-source nature, but it represents a segment of the larger government contracting market focused on maintaining physical assets.

Small Business Impact

The contract details indicate that this was not a small business set-aside, nor does it appear to have specific provisions for small business subcontracting. Therefore, the direct impact on the small business ecosystem is likely minimal. The award went to a large, established contractor, Electric Boat Corporation, suggesting that opportunities for small businesses to participate in this specific contract were not prioritized or actively sought through subcontracting channels.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards and payment schedules. Transparency is limited due to the sole-source nature of the award; however, contract award data is generally made public. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Facilities Engineering Command (NAVFAC) Contracts
Department of Defense Base Operations Support (BOS)
Government Facilities Maintenance Contracts
Shipyard Support Services

Risk Flags

Sole-source award lacks competitive justification.
Potential for uncompetitive pricing.
Limited transparency in value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.1 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 $18.1 million.

What is the period of performance?

Start: 2002-01-31. End: 2007-03-10.

What is the track record of Electric Boat Corporation in providing facilities support services to the government?

Electric Boat Corporation (EBC) is primarily known as a major designer and builder of submarines for the U.S. Navy. While their core competency lies in shipbuilding, they also possess extensive facilities and infrastructure at their Groton, Connecticut shipyard. This necessitates significant in-house or contracted facilities support services to maintain their operational capabilities. Information regarding EBC's specific track record in providing standalone facilities support services to other government entities or as a prime contractor for such services, beyond their own operational needs, is less publicly documented. Their long-standing relationship with the Navy suggests a familiarity with government contracting requirements and operational environments, but the nature and scale of their facilities support experience as a distinct service offering requires further investigation.

How does the value of this contract compare to similar facilities support contracts awarded by the Navy or other defense agencies?

Direct comparison of this $18 million contract is challenging due to its sole-source nature and the specific period of performance (2002-2007). Competitive contracts for facilities support services, especially those awarded more recently, often provide clearer benchmarks for pricing and value. For instance, larger indefinite-delivery/indefinite-quantity (IDIQ) contracts for base operations support (BOS) or facilities maintenance across multiple DoD installations can range from tens of millions to billions of dollars. These competitive vehicles typically involve rigorous price evaluations. Without a competitive process for this specific Electric Boat contract, it's difficult to ascertain if the pricing was aligned with market rates or what could have been achieved through competition. The lack of comparative data makes a definitive value assessment problematic.

What are the primary risks associated with a sole-source award for facilities support services?

The primary risk associated with a sole-source award for facilities support services is the potential for inflated costs due to the absence of competition. When only one vendor is considered, there is less incentive for them to offer the most competitive pricing. This can lead to the government paying more than necessary for the services rendered. Another risk is a potential decrease in service quality or innovation, as the contractor may face less pressure to continuously improve performance or adopt cost-saving measures. Furthermore, sole-source awards can raise concerns about fairness and transparency in the procurement process, potentially leading to perceptions of favoritism or missed opportunities to engage a wider range of capable vendors, including small businesses.

How effective are facilities support services in ensuring the operational readiness of naval installations?

Facilities support services are critically important for ensuring the operational readiness of naval installations. These services encompass a wide range of activities, including maintenance, repair, custodial services, groundskeeping, utility management, and infrastructure upkeep. Without consistent and effective facilities support, critical infrastructure such as piers, buildings, power systems, and communication networks can degrade, leading to operational disruptions and increased long-term repair costs. For naval bases, which often house sensitive equipment, personnel, and strategic assets, maintaining a secure, functional, and well-maintained physical environment is paramount. Therefore, robust facilities support directly contributes to the Navy's ability to project power, train personnel, and execute its mission effectively.

What has been the historical spending trend for facilities support services within the Department of the Navy?

Historical spending on facilities support services within the Department of the Navy has been substantial and generally increasing over time, reflecting the aging infrastructure of many bases and the continuous need for maintenance and upgrades. The Navy, through its Naval Facilities Engineering Command (NAVFAC), manages a vast portfolio of real property requiring ongoing support. Spending encompasses a wide array of services, from routine maintenance and repair to major construction and environmental services. While specific figures fluctuate annually based on budget allocations, operational tempo, and infrastructure investment priorities, the overall trend indicates a consistent and significant financial commitment to maintaining the physical plant necessary for naval operations. This includes both competitively awarded contracts and, in some cases, sole-source procurements for specialized needs.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: LEASE/RENT FACILITIES › LEASE/RENTAL OF BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 75 EASTERN POINT RD, GROTON, CT, 02

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline