DoD's $1.17B Engineering Services Contract with Huntington Ingalls: A 3002-Day Award

Contract Overview

Contract Amount: $117,353,933 ($117.4M)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2005-02-11

End Date: 2013-05-02

Contract Duration: 3,002 days

Daily Burn Rate: $39.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Engineering Services

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39568

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $117.4 million to HUNTINGTON INGALLS INCORPORATED for work described as: Key points: 1. Significant long-term award to a major defense contractor. 2. Lack of competition raises questions about price discovery. 3. Potential for cost overruns given the Cost Plus Award Fee structure. 4. Focus on engineering services within the shipbuilding sector.

Value Assessment

Rating: questionable

The contract's value of $1.17 billion over 3002 days suggests a substantial investment. Without competitive benchmarks, assessing its value for money is difficult. The Cost Plus Award Fee structure can incentivize performance but also carries inherent risks of cost escalation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This significantly reduces price discovery opportunities and may lead to higher costs than a competitive process would yield.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these engineering services, as there was no market pressure to drive down costs.

Public Impact

Impacts naval engineering and shipbuilding capabilities. Long duration suggests critical, ongoing support needs. Potential for follow-on contracts or related work.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Award Fee structure
Long contract duration

Positive Signals

Award to established, experienced contractor
Supports critical defense needs

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the Department of the Navy. Spending in this area is crucial for maintaining and developing naval assets, with benchmarks often tied to specific project scopes and contractor capabilities.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. The nature of large-scale defense engineering services often favors established prime contractors.

Oversight & Accountability

The long duration and sole-source nature of this contract warrant close oversight to ensure cost control and effective delivery of engineering services. Regular performance reviews and audits are essential.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Cost Plus Award Fee structure
Long contract duration (3002 days)
Potential for cost overruns
Limited transparency on specific services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $117.4 million to HUNTINGTON INGALLS INCORPORATED. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $117.4 million.

What is the period of performance?

Start: 2005-02-11. End: 2013-05-02.

What specific engineering services were procured under this contract, and how do they align with the Navy's long-term strategic goals?

The contract, NAICS code 541330, covers engineering services. While the data doesn't specify the exact services, they likely relate to naval design, development, maintenance, or modernization of ships and related systems. These services are critical for maintaining the fleet's operational readiness and advancing technological capabilities in line with the Navy's strategic objectives.

Given the sole-source nature, what mechanisms were in place to ensure fair and reasonable pricing and mitigate cost overrun risks?

The contract utilized a Cost Plus Award Fee (CPAF) structure. While CPAF aims to incentivize performance through award fees, it inherently carries risks of cost escalation. Robust oversight, detailed cost tracking, and clear performance metrics tied to award fees would be crucial to mitigate these risks and ensure fair pricing.

How does the $1.17 billion expenditure over 3002 days compare to industry benchmarks for similar long-term, non-competed engineering support contracts?

Direct comparison is challenging due to the contract's specific nature, duration, and sole-source status. However, such large, long-term sole-source awards often exceed competitive pricing. Benchmarking would typically involve analyzing historical data for similar services, contractor overhead rates, and profit margins, adjusted for project complexity and risk.

Industry Classification

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

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc (UEI: 967362331)

Address: 1000 ACCESS RD, PASCAGOULA, MS, 04

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline