DoD's $98M Ship Repair Contract Awarded to Bath Iron Works Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $98,134,516 ($98.1M)
Contractor: Bath Iron Works Corporation
Awarding Agency: Department of Defense
Start Date: 2005-09-30
End Date: 2006-08-07
Contract Duration: 311 days
Daily Burn Rate: $315.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Place of Performance
Location: BATH, SAGADAHOC County, MAINE, 04530
State: Maine Government Spending
Plain-Language Summary
Department of Defense obligated $98.1 million to BATH IRON WORKS CORPORATION for work described as: Key points: 1. The contract awarded to Bath Iron Works Corporation for ship building and repair represents a significant expenditure. 2. Lack of competition is a major concern, potentially leading to inflated costs and reduced innovation. 3. The 'COST PLUS AWARD FEE' contract type can incentivize cost overruns if not managed carefully. 4. The IT sector is not directly involved, but efficient management of defense contracts is crucial for national security.
Value Assessment
Rating: questionable
The contract's value of $98,134,516 for ship building and repair needs further scrutiny. Without competitive bidding, it's difficult to benchmark against similar contracts to determine if the pricing is fair and reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and negotiation leverage for the government, potentially resulting in higher costs for taxpayers.
Taxpayer Impact: The absence of competition for this substantial contract raises concerns about taxpayer value and the potential for inefficient use of funds.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. Reduced competition can stifle innovation in shipbuilding and repair technologies. The Department of Defense's reliance on sole-source contracts warrants closer examination for efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Awarded to an established defense contractor
- Contract duration aligns with project needs
Sector Analysis
The shipbuilding and repair sector is critical for national defense, often involving complex, high-value contracts. Benchmarks for such specialized services can vary widely, but competitive processes are typically expected to yield better value.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This sole-source award bypasses opportunities for small business participation.
Oversight & Accountability
The Department of the Navy awarded this contract without competition. Oversight should focus on ensuring the justification for the sole-source award is robust and that the cost-plus award fee structure is managed to prevent excessive spending.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Cost-plus contract type can incentivize higher spending.
- Potential for reduced innovation due to lack of competition.
- Limited transparency on specific cost drivers and profit margins.
- No apparent small business participation.
Tags
ship-building-and-repairing, department-of-defense, me, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $98.1 million to BATH IRON WORKS CORPORATION. See the official description on USAspending.
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 $98.1 million.
What is the period of performance?
Start: 2005-09-30. End: 2006-08-07.
What is the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without further details, it's impossible to assess if the Department of the Navy thoroughly explored competitive options or if the justification is sound. This lack of competition directly impacts the government's ability to secure the best possible price and value for taxpayer dollars.
How effectively is the 'COST PLUS AWARD FEE' structure being monitored to ensure Bath Iron Works meets performance targets without excessive cost escalation?
The 'COST PLUS AWARD FEE' (CPAF) contract type allows the contractor to recover costs plus a fee that can be adjusted based on performance. Effective oversight requires rigorous monitoring of incurred costs, clear performance metrics, and objective evaluation of award fee criteria to prevent unwarranted fee payouts and control overall project expenditure.
What is the long-term strategic impact of awarding such significant contracts without competition on the overall health and innovation within the shipbuilding and repair industry?
Consistently awarding large contracts without competition can reduce market pressure on incumbent firms, potentially leading to complacency and slower innovation. It also limits opportunities for new entrants and specialized firms, potentially concentrating critical capabilities and reducing overall industry resilience and technological advancement.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D 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: General Dynamics Corp (UEI: 001381284)
Address: 700 WASHINGTON ST, BATH, ME, 01
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2005-09-30
Current End Date: 2006-08-07
Potential End Date: 2007-01-07 00:00:00
Last Modified: 2014-05-15
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