Naval Sea Systems Command awards $141.6M contract for small craft, with a 7670-day duration

Contract Overview

Contract Amount: $14,164,275 ($14.2M)

Contractor: TPI Composites, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-07-23

End Date: 2025-07-23

Contract Duration: 7,670 days

Daily Burn Rate: $1.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200410!044242!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002404C2224 !A!N! !N! ! !20040723!20080407!001194661!001194661!001194661!N!TPI COMPOSITES, INC !373 MARKET ST !WARREN !RI!02885!73940!001!44!WARREN !BRISTOL !RHODE ISLD!+000006783216!N!N!000000000000!1940!SMALL CRAFT !A3 !SHIPS !000 !* !336612!E! !3! ! ! ! ! !99990909!B! ! !B! !A!N!J!2!002!K! !Z!N!Z! ! !Y!B!N!N! ! !A! !B!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: WARREN, BRISTOL County, RHODE ISLAND, 02885

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $14.2 million to TPI COMPOSITES, INC. for work described as: 200410!044242!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002404C2224 !A!N! !N! ! !20040723!20080407!001194661!001194661!001194661!N!TPI COMPOSITES, INC !373 MARKET ST !WARREN !RI!02885!73940!001!44!WARREN !BRIS… Key points: 1. Contract awarded to TPI Composites, Inc. for small craft, indicating specialized shipbuilding capabilities. 2. The contract's long duration (over 21 years) suggests a need for sustained production or long-term support. 3. Awarded under full and open competition after exclusion of sources, implying a specific justification for limited initial competition. 4. The firm fixed-price contract type shifts risk to the contractor, potentially leading to cost efficiencies if managed well. 5. The contract is for 'Ships' and specifically 'Small Craft', aligning with naval operational requirements. 6. The contract value of $141.6M over its extended period suggests a significant investment in naval assets.

Value Assessment

Rating: fair

The contract value of $141.6 million over a period of 7670 days (approximately 21 years) averages to about $18,470 per year. This is a very long-term contract, making direct per-year comparisons difficult without understanding the phased delivery or sustainment services. The firm fixed-price nature suggests the contractor bears cost overruns, which can be a good value indicator if the contractor is efficient. However, the extended duration could also mask potential cost escalations or scope creep if not tightly managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This designation suggests that while competition was sought, certain sources may have been excluded for specific reasons, possibly related to technical capabilities, security, or prior performance. The number of bidders is not explicitly stated, but the 'exclusion of sources' implies a narrower competitive pool than 'full and open' alone.

Taxpayer Impact: This type of competition, while not fully open, aims to ensure a reasonable price by considering multiple qualified bidders. However, taxpayers may not benefit from the broadest possible price discovery if the exclusion criteria were overly restrictive.

Public Impact

The primary beneficiaries are the U.S. Navy, receiving specialized small craft for operational use. The contract delivers essential naval assets, contributing to national defense capabilities. The geographic impact is centered around TPI Composites, Inc. in Warren, Rhode Island, supporting local and regional economies. Workforce implications include job creation and sustainment within the shipbuilding and composites manufacturing sectors in Rhode Island.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition type warrants scrutiny to ensure it was justified and did not unduly limit competition.
The extremely long contract duration (over 21 years) increases the risk of cost overruns due to inflation or unforeseen technical challenges.
Lack of specific details on performance metrics or milestones makes it difficult to assess the contractor's ongoing performance and value delivery.
The contract is not set aside for small businesses, potentially limiting opportunities for smaller players in the shipbuilding supply chain.

Positive Signals

Awarding to a single contractor (TPI Composites, Inc.) with a long-term contract can foster specialized expertise and stable production.
The firm fixed-price contract type provides cost certainty for the government, assuming the contractor can manage their expenses effectively.
The contract is for 'Small Craft', a specific niche that TPI Composites, Inc. may be uniquely qualified to fulfill.
The contract is managed by the Defense Contract Management Agency (DCMA), indicating established oversight processes are in place.

Sector Analysis

This contract falls within the Defense Industrial Base, specifically the shipbuilding and advanced manufacturing sector. The market for specialized naval vessels is relatively concentrated, with a few key players capable of meeting stringent military requirements. TPI Composites, Inc. operates in the composites manufacturing space, which is increasingly important for lightweight, durable naval structures. Comparable spending benchmarks would involve other naval shipbuilding contracts, but the unique nature of 'small craft' and the extended duration make direct comparisons challenging.

Small Business Impact

This contract was not awarded as a small business set-aside, and the data indicates the prime contractor, TPI Composites, Inc., is not a small business. There is no explicit information regarding subcontracting plans for small businesses. The focus on a large, long-term contract with a prime contractor suggests that subcontracting opportunities may exist, but their extent and impact on the small business ecosystem are not detailed in the provided data.

Oversight & Accountability

The contract is managed by the Naval Sea Systems Command (NAVSEA) and overseen by the Defense Contract Management Agency (DCMA). Oversight mechanisms likely include regular progress reviews, quality assurance inspections, and financial audits. Accountability is tied to the firm fixed-price terms, requiring TPI Composites to deliver within the agreed budget. Transparency is facilitated through contract award databases, though specific performance details may be limited.

Related Government Programs

Naval Shipbuilding Contracts
Small Boat Procurement
Defense Manufacturing
Composite Materials in Defense
Long-Term Government Contracts

Risk Flags

Long contract duration increases risk of cost escalation and obsolescence.
Competition type ('exclusion of sources') requires justification to ensure fairness and value.
Lack of detailed performance metrics makes ongoing assessment challenging.
Potential for contractor financial distress over extended FFP contract term.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.2 million to TPI COMPOSITES, INC.. 200410!044242!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002404C2224 !A!N! !N! ! !20040723!20080407!001194661!001194661!001194661!N!TPI COMPOSITES, INC !373 MARKET ST !WARREN !RI!02885!73940!001!44!WARREN !BRISTOL !RHODE ISLD!+000006783216!N!N!000000000000!1940!SMALL CRAFT !A3 !SHIPS !000 !* !336612!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is TPI COMPOSITES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $14.2 million.

What is the period of performance?

Start: 2004-07-23. End: 2025-07-23.

What specific types of 'small craft' are being procured under this contract, and what are their intended naval applications?

The provided data identifies the contract's purpose as 'Boat Building' and the specific category as 'Small Craft' under the 'Ships' sector. While the exact types of small craft are not detailed, they typically include vessels such as patrol boats, rigid-hulled inflatable boats (RHIBs), special operations craft, and utility boats. These craft are essential for a variety of naval missions, including coastal surveillance, force protection, special warfare operations, search and rescue, and logistical support. The long duration and significant value suggest these could be for specialized, high-performance craft requiring advanced composite construction, potentially for extended deployments or demanding operational environments.

What is the rationale behind the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type, and how did it impact the bidding process?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation implies that the agency initially intended to compete the contract broadly but subsequently excluded certain potential bidders. This exclusion could be based on various factors, such as unique technical capabilities, proprietary technology, security clearances, or past performance issues. The rationale is typically to ensure that only capable and responsible sources are considered, especially for complex or specialized requirements. While it aims for competition among qualified entities, it inherently narrows the field compared to a purely 'full and open' solicitation, potentially impacting the final price and the range of innovative solutions considered. The specific reasons for exclusion are not detailed in the provided data.

How does the firm fixed-price (FFP) contract type align with the long duration (7670 days) of this contract, and what are the associated risks and benefits?

A Firm Fixed-Price (FFP) contract obligates the contractor to complete the work for a predetermined price, regardless of the actual costs incurred. This aligns with the long duration by providing cost certainty to the government over an extended period. The primary benefit is risk transfer; the contractor assumes the financial risk of cost overruns. This can incentivize efficiency and cost control by the contractor. However, the significant risk to the contractor over 21 years could lead them to build substantial contingency into their initial price, potentially making it higher than a cost-reimbursable contract. Furthermore, if unforeseen technical challenges or significant market shifts occur, the contractor might struggle to meet the FFP terms, potentially leading to disputes or contract termination.

What is the historical spending pattern for 'Small Craft' procurement by the Naval Sea Systems Command, and how does this $141.6M contract compare?

The provided data does not include historical spending patterns for 'Small Craft' procurement by NAVSEA. However, a contract value of $141.6 million spread over approximately 21 years represents a substantial, long-term commitment. Typical annual spending on small craft can vary widely depending on fleet modernization cycles, specific mission requirements, and the complexity of the vessels. Without historical data, it's difficult to definitively benchmark this contract's size. However, given its duration and value, it likely represents a significant procurement, possibly for a new class of specialized craft or a long-term sustainment and production agreement for existing ones, rather than routine, smaller-volume purchases.

What are the potential implications of this contract on the small business industrial base, given it's not a small business set-aside and the prime is a large business?

As this is a large prime contract awarded to TPI Composites, Inc. (a non-small business) and not designated as a small business set-aside, the direct impact on small businesses as prime contractors is nil. However, the contract's substantial value and long duration could create significant subcontracting opportunities. The extent to which TPI Composites, Inc. utilizes small businesses for components, specialized manufacturing processes, or support services will determine the indirect impact. Government policy often encourages large prime contractors to meet small business subcontracting goals. If TPI actively pursues these goals, it could provide valuable work and revenue streams for numerous small businesses within the defense supply chain, fostering their growth and capabilities.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Boat Building

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 373 MARKET ST, WARREN, RI, 02885

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline