DoD's $244M Engineering Services Contract with Huntington Ingalls Faces Scrutiny for Lack of Competition

Contract Overview

Contract Amount: $244,375,761 ($244.4M)

Contractor: Huntington Ingalls Inc

Awarding Agency: Department of Defense

Start Date: 2006-03-01

End Date: 2008-10-30

Contract Duration: 974 days

Daily Burn Rate: $250.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $244.4 million to HUNTINGTON INGALLS INC for work described as: Key points: 1. Significant contract value of $244.4 million awarded. 2. Sole-source award to Huntington Ingalls Inc. raises competition concerns. 3. Contract duration of 974 days suggests a substantial, ongoing need. 4. Engineering services sector is critical for defense operations.

Value Assessment

Rating: questionable

The contract value of $244.4 million for engineering services is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts for specialized engineering support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for taxpayers.

Taxpayer Impact: The absence of competition for a $244.4 million contract potentially leads to overspending, impacting taxpayer funds negatively.

Public Impact

Taxpayers may be paying a premium due to the lack of competitive bidding. The long duration of the contract suggests a critical, ongoing need for these specific engineering services. Oversight is needed to ensure the services provided are essential and efficiently delivered.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value

Positive Signals

Essential engineering services for the Navy
Established contractor

Sector Analysis

This contract falls within the engineering services sector, which is vital for the Department of Defense's operational readiness and technological advancement. Benchmarks for similar large-scale engineering contracts are often difficult to establish due to specialization.

Small Business Impact

There is no indication that small businesses were involved in this sole-source award, suggesting missed opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure the contractor is delivering necessary services at a reasonable cost and that future procurements are competed.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited transparency
Missed small business opportunities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $244.4 million to HUNTINGTON INGALLS INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $244.4 million.

What is the period of performance?

Start: 2006-03-01. End: 2008-10-30.

What specific engineering services were provided under this contract, and why were they deemed only available from Huntington Ingalls Inc.?

The contract specifies engineering services under NAICS code 541330. The sole-source justification would detail the unique capabilities or proprietary knowledge required, explaining why competition was not feasible or beneficial for this particular requirement. This information is crucial for understanding the necessity of the non-competitive award.

What was the process for determining the 'Cost Plus Fixed Fee' structure, and how was the fixed fee justified?

A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover allowable costs plus a predetermined fixed fee. The fee is negotiated upfront and represents the contractor's profit. Justification involves assessing the level of uncertainty in the work, the contractor's efficiency incentives, and market rates for similar services to ensure the fee is fair and reasonable.

Were there any performance metrics or milestones tied to the fixed fee to ensure contractor efficiency and value?

While the contract type is CPFF, the presence and stringency of performance metrics are not detailed in the provided data. Effective contracts of this nature typically include performance standards, milestones, or other objective measures to incentivize efficiency and ensure the government receives value for the fixed fee paid. Further review of the contract's statement of work and performance clauses would be necessary.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: 4101 WASHINGTON AVE BLDG 520/3, NEWPORT NEWS, VA, 23607

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $244,375,761

Current Obligation: $244,375,761

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline