Naval Sea Systems Command awards $174.8M contract for advanced ship technology development to Northrop Grumman

Contract Overview

Contract Amount: $108,779,845 ($108.8M)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2005-09-30

End Date: 2006-01-31

Contract Duration: 123 days

Daily Burn Rate: $884.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200512!053218!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C2311 !A!N! !N! ! !20050930!20060131!174786913!001922749!016435559!N!NORTHROP GRUMMAN SHIP SYSTEMS !1000 ACCESS RD !PASCAGOULA !MS!39568!55360!059!28!PASCAGOULA !JACKSON !MISS !+000026700000!N!N!000053400000!AC33!RDTE/SHIPS-ADV TECH DEV !A3 !SHIPS !197 !DD(X) / DD 21 (SC-21) !336611!E! !1! ! ! ! ! !20200930!B! ! !A! !D!N!R!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y!1700!N00024!0001! !

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39568

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $108.8 million to HUNTINGTON INGALLS INCORPORATED for work described as: 200512!053218!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C2311 !A!N! !N! ! !20050930!20060131!174786913!001922749!016435559!N!NORTHROP GRUMMAN SHIP SYSTEMS !1000 ACCESS RD !PASCAGOULA !MS!39568!55360!059!28!PASCAGOULA !JACK… Key points: 1. Contract awarded for advanced technology development in shipbuilding, focusing on DD(X) / DD 21 programs. 2. Significant investment in research, development, testing, and evaluation (RDTE) for future naval capabilities. 3. Contractor has a substantial track record in large-scale defense shipbuilding and integration. 4. The contract's duration and value suggest a complex, multi-year development effort. 5. Focus on advanced technology development indicates a strategic investment in maintaining naval technological superiority.

Value Assessment

Rating: fair

The contract value of $174.8 million for a 123-day period (approximately $1.42 million per day) appears high, but is typical for advanced R&D in the defense sector. Benchmarking against similar advanced technology development contracts for major naval platforms is necessary for a precise value-for-money assessment. The 'COST PLUS AWARD FEE' (CPAF) contract type allows for flexibility but requires robust oversight to ensure cost control and performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that Northrop Grumman was the only source considered capable of performing the required advanced technology development. While sole-source awards can be justified for specialized R&D, they limit price discovery and may result in higher costs compared to a competitive process. The justification for this sole-source award would need to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings that typically arise from competitive bidding, potentially leading to a higher overall expenditure for this development.

Public Impact

The primary beneficiaries are the U.S. Navy, which will receive advanced technological capabilities for future warships. Services delivered include research, development, testing, and evaluation of advanced ship technologies. The geographic impact is concentrated in Pascagoula, Mississippi, where Northrop Grumman Ship Systems is located. Workforce implications include employment for highly skilled engineers, technicians, and support staff at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition, potentially increasing costs for taxpayers.
Cost Plus Award Fee structure requires diligent oversight to manage expenses and ensure performance.
The specific advanced technologies being developed are not detailed, posing a potential risk if they do not align with future naval needs.

Positive Signals

Award to a major defense contractor with extensive experience in shipbuilding and advanced technology.
Focus on R&D for future naval platforms signals a commitment to technological advancement and national security.
The contract supports critical shipbuilding infrastructure and a skilled workforce in Mississippi.

Sector Analysis

This contract falls within the Defense sector, specifically in shipbuilding and advanced technology development. The market for major naval platform development is highly concentrated, with a few large prime contractors dominating. Spending in this area is driven by national security requirements and the need to maintain a technological edge. Comparable spending benchmarks would involve other large-scale R&D contracts for naval vessels or advanced defense systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to a large prime contractor, Northrop Grumman. There is no explicit information regarding subcontracting plans for small businesses within this specific award notice. The focus on advanced R&D may limit opportunities for small businesses unless they are specialized subcontractors to the prime.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Sea Systems Command (NAVSEA) and potentially the Department of Defense's Inspector General. The 'COST PLUS AWARD FEE' structure necessitates rigorous performance monitoring and financial auditing to ensure funds are used effectively and award fees are justified. Transparency regarding the specific R&D outcomes and their alignment with program goals would be crucial.

Related Government Programs

DDG 51 Arleigh Burke-class destroyers
Littoral Combat Ship (LCS) program
Future Surface Combatant programs
Naval Surface Warfare Center research initiatives

Risk Flags

Sole-source award
Cost Plus Award Fee contract type
Advanced technology development (inherent R&D risks)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $108.8 million to HUNTINGTON INGALLS INCORPORATED. 200512!053218!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C2311 !A!N! !N! ! !20050930!20060131!174786913!001922749!016435559!N!NORTHROP GRUMMAN SHIP SYSTEMS !1000 ACCESS RD !PASCAGOULA !MS!39568!55360!059!28!PASCAGOULA !JACKSON !MISS !+000026700000!N!N!000053400000!AC33!RDTE/SHIPS-ADV TECH DEV !A3 !SHIPS !197 !DD(X) / DD 21 (SC-21) !336611!E! !1! ! ! ! ! !202

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 $108.8 million.

What is the period of performance?

Start: 2005-09-30. End: 2006-01-31.

What is the specific nature of the 'advanced technology development' for the DD(X) / DD 21 programs funded by this contract?

The data provided indicates the contract is for 'RDTE/SHIPS-ADV TECH DEV' related to the DD(X) / DD 21 programs. While the specific technologies are not detailed in the summary, these programs historically focused on developing next-generation surface combatants. This likely encompassed areas such as advanced hull design, propulsion systems, combat systems integration, stealth technologies, and network-centric warfare capabilities. The DD(X) program evolved into the Zumwalt-class destroyer (DDG 1000), and the DD 21 program was a precursor to the current DDG 51 Flight III upgrades and future surface combatant concepts. The contract's purpose was to mature these technologies before full-scale production.

How does the $174.8 million contract value compare to other advanced shipbuilding R&D efforts?

The $174.8 million contract value for advanced technology development is substantial, reflecting the complexity and high cost associated with cutting-edge naval R&D. While direct comparisons are difficult without knowing the exact scope and duration of similar contracts, major naval platform development programs often involve billions of dollars over many years. This specific contract, with a duration of approximately four months (123 days), suggests a focused effort on maturing specific technologies rather than developing an entire platform. It represents a significant, albeit potentially short-term, investment in future naval capabilities, consistent with the high-risk, high-reward nature of advanced defense R&D.

What are the key risks associated with a sole-source award for advanced technology development in shipbuilding?

The primary risk of a sole-source award for advanced technology development is the lack of competitive pressure, which can lead to inflated costs and reduced innovation. Without competing bids, the government may overpay for the services rendered. Furthermore, it limits the opportunity to explore alternative technological approaches or solutions that other capable firms might offer. There's also a risk that the chosen contractor may not perform optimally if they perceive less pressure to deliver exceptional value. Robust contract oversight, clear performance metrics, and strong negotiation are critical to mitigate these risks.

What is Northrop Grumman Ship Systems' track record with similar naval development contracts?

Northrop Grumman (now part of Huntington Ingalls Industries) has a long and extensive track record in developing and building major naval platforms for the U.S. Navy. They were the prime contractor for the DDG 51 Arleigh Burke-class destroyers and have been involved in numerous advanced technology development and integration programs for surface combatants and aircraft carriers. Their experience includes complex systems engineering, integration of advanced weapons and sensor systems, and large-scale shipbuilding. This history suggests a strong capability to execute advanced R&D contracts, although the specific success and cost-effectiveness of past contracts would require further analysis.

How does this contract fit into the broader context of naval shipbuilding modernization efforts?

This contract represents a crucial component of the Navy's continuous modernization strategy. The DD(X) / DD 21 programs were foundational efforts to define the future of surface warfare, moving beyond existing designs to incorporate revolutionary technologies. Contracts like this enable the exploration and maturation of concepts that will eventually lead to new classes of warships or significant upgrades to existing fleets. It signifies the Navy's commitment to investing in research and development to maintain its technological advantage and address evolving threats, ensuring that its fleet remains capable and relevant in the long term.

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: Huntington Ingalls Industries, Inc

Address: 1000 ACCESS RD, PASCAGOULA, MS, 39567

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

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline