Navy Awards $38.2M for Destroyer Engineering Services to Bath Iron Works

Contract Overview

Contract Amount: $38,247,548 ($38.2M)

Contractor: Bath Iron Works Corporation

Awarding Agency: Department of Defense

Start Date: 2004-02-05

End Date: 2017-12-07

Contract Duration: 5,054 days

Daily Burn Rate: $7.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200407!049999!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002404C2302 !A!N! !N! ! !20040205!20070930!045953718!045953718!001381284!N!BATH IRON WORKS CORPORATION !700 WASHINGTON ST !BATH !ME!04530!03355!023!23!BATH !SAGADAHOC !MAINE !+000011816128!N!N!000000000000!1903!DESTROYERS !A3 !SHIPS !180 !DDG 51 !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !A!Y!R!2!002!B! !A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: BATH, SAGADAHOC County, MAINE, 04530

State: Maine Government Spending

Plain-Language Summary

Department of Defense obligated $38.2 million to BATH IRON WORKS CORPORATION for work described as: 200407!049999!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002404C2302 !A!N! !N! ! !20040205!20070930!045953718!045953718!001381284!N!BATH IRON WORKS CORPORATION !700 WASHINGTON ST !BATH !ME!04530!03355!023!23!BATH !SAGA… Key points: 1. Contract awarded for engineering services related to DDG 51 class destroyers. 2. Bath Iron Works Corporation, a major defense contractor, is the sole awardee. 3. The contract spans over 13 years, indicating a long-term need. 4. Engineering services are critical for maintaining and upgrading naval vessels.

Value Assessment

Rating: fair

The contract value of $38.2 million over 13 years suggests a significant but potentially spread-out investment. Benchmarking against similar long-term engineering support contracts for complex naval platforms is necessary for a precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive sign for price discovery. However, the long duration and specialized nature of the services may limit the number of truly competitive bids.

Taxpayer Impact: The long-term nature of the contract implies sustained spending on naval readiness. Ensuring competitive pricing throughout the contract's life is key to maximizing taxpayer value.

Public Impact

Supports the U.S. Navy's fleet of DDG 51 class destroyers, crucial for national defense. Ensures continued employment and economic activity for Bath Iron Works and its supply chain. Contributes to the technological advancement and operational readiness of naval vessels. Potential for follow-on contracts or modifications based on evolving defense needs.

Waste & Efficiency Indicators

Waste Risk Score: 75 / 10

Warning Flags

Extended contract duration raises concerns about potential cost overruns if not managed effectively.
Sole awardee for a long period could indicate limited competition in practice, despite initial full and open solicitation.

Positive Signals

Awarded under full and open competition.
Supports critical national defense assets (destroyers).
Long-term contract provides stability for contractor and program.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting naval shipbuilding and maintenance. Spending in this area is often driven by defense budgets and the lifecycle needs of major military assets.

Small Business Impact

While the prime contractor is a large corporation, the extensive nature of defense contracts often involves significant subcontracting opportunities for small businesses in specialized areas of engineering and manufacturing.

Oversight & Accountability

The long duration of this contract necessitates robust oversight from the Naval Sea Systems Command to ensure performance, manage costs, and address any potential issues proactively.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Long contract duration increases risk of cost escalation.
Potential for limited effective competition despite initial 'full and open' status.
Reliance on a single contractor for extended support.
Need for strong government oversight to manage performance and costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.2 million to BATH IRON WORKS CORPORATION. 200407!049999!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002404C2302 !A!N! !N! ! !20040205!20070930!045953718!045953718!001381284!N!BATH IRON WORKS CORPORATION !700 WASHINGTON ST !BATH !ME!04530!03355!023!23!BATH !SAGADAHOC !MAINE !+000011816128!N!N!000000000000!1903!DESTROYERS !A3 !SHIPS !180 !DDG 51 !541330!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is BATH IRON WORKS 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 $38.2 million.

What is the period of performance?

Start: 2004-02-05. End: 2017-12-07.

What is the projected annual spending rate for these engineering services, and how does it compare to industry benchmarks for similar naval platforms?

The total contract value is $38.2 million over approximately 13 years (from Feb 2004 to Sep 2017, though the data shows an edit date of Dec 2017). This averages to roughly $2.94 million per year. Benchmarking this against annual engineering support costs for comparable destroyer classes would reveal if this rate is competitive or indicative of potential overspending.

Given the long contract duration, what mechanisms are in place to mitigate risks associated with technological obsolescence or changing defense requirements?

The contract type (Cost Plus Award Fee) suggests flexibility and incentives for performance. However, specific clauses addressing scope changes, technology insertion, and termination for convenience would be crucial. Regular reviews and potential contract modifications are likely employed to adapt to evolving needs and mitigate obsolescence risks.

How effectively has Bath Iron Works managed cost and performance throughout the contract's lifecycle, and what lessons can be learned for future long-term defense engineering contracts?

Assessing the effectiveness requires analyzing performance metrics and final costs against initial projections. The Cost Plus Award Fee structure implies performance is evaluated, but the ultimate success depends on the award fee criteria and the government's oversight. Lessons learned would likely focus on the balance between contract flexibility and cost control over extended periods.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 700 WASHINGTON ST, BATH, ME, 04530

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline