DoD's $91.7M Ship Repair Contract with Bath Iron Works: Limited Competition Raises Concerns
Contract Overview
Contract Amount: $91,676,040 ($91.7M)
Contractor: Bath Iron Works Corporation
Awarding Agency: Department of Defense
Start Date: 2005-12-29
End Date: 2014-10-16
Contract Duration: 3,213 days
Daily Burn Rate: $28.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Place of Performance
Location: BATH, SAGADAHOC County, MAINE, 04530
State: Maine Government Spending
Plain-Language Summary
Department of Defense obligated $91.7 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 repairing services represents a significant expenditure. 2. Limited competition was a factor in this award, potentially impacting price discovery and overall value. 3. The primary risk lies in the lack of competitive bidding, which could lead to inflated costs. 4. The sector is dominated by large, established players, making it challenging for smaller firms to compete.
Value Assessment
Rating: questionable
The contract type is Cost Plus Award Fee, which can incentivize contractors to incur costs to achieve award fees. Without a competitive benchmark, assessing the pricing's fairness against similar contracts is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, indicating a limited source selection. This approach may be justified by specific circumstances, but it bypasses the price discovery benefits inherent in open competition.
Taxpayer Impact: The lack of competition means taxpayers may not have received the best possible price for these services, potentially leading to higher overall costs.
Public Impact
Taxpayers may be paying more than necessary due to the absence of competitive bidding. The long duration of the contract (over 9 years) means potential cost overruns could accumulate significantly. Dependence on a single contractor for critical shipbuilding and repair services can create strategic vulnerabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost Plus Award Fee Contract Type
- Long Contract Duration
- Potential for Cost Overruns
Positive Signals
- Awarded to an established company with relevant experience
- Contract aims to ensure critical shipbuilding and repair capabilities
Sector Analysis
The shipbuilding and repair sector is capital-intensive and highly specialized, often characterized by long-term contracts with a limited number of large, experienced firms. Government contracts are a significant portion of this market.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. The nature of large-scale shipbuilding and repair typically favors larger, established corporations.
Oversight & Accountability
The contract's long duration and cost-plus nature warrant close oversight to ensure costs are reasonable and award fees are justified. Robust auditing and performance monitoring are crucial.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of Competition
- Potential for Cost Overruns
- Limited Transparency in Pricing
- Long Contract Duration
- Contract Type (CPAF)
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 $91.7 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 $91.7 million.
What is the period of performance?
Start: 2005-12-29. End: 2014-10-16.
What specific factors justified the 'not competed' determination for this significant shipbuilding contract?
The justification for not competing this contract would typically involve factors such as unique capabilities, urgent need, or the unavailability of other sources. A thorough review of the contracting officer's justification is necessary to understand the rationale and assess if it aligns with federal procurement regulations for sole-source or limited-source awards.
How does the Cost Plus Award Fee structure impact the risk of cost overruns compared to fixed-price contracts in this sector?
Cost Plus Award Fee (CPAF) contracts shift some cost risk to the government, as the contractor is reimbursed for allowable costs plus an award fee based on performance. This contrasts with fixed-price contracts, where the contractor bears more risk for cost overruns. For complex, long-term projects like shipbuilding, CPAF can incentivize contractor performance but requires diligent government oversight to control costs and ensure award fees are earned appropriately.
What is the long-term strategic implication of awarding such a large, non-competed contract for shipbuilding and repair capabilities?
Awarding a large, non-competed contract can ensure the continuity of essential capabilities with a specific, trusted provider. However, it may also stifle innovation and competition within the industry over the long term. It could also create a dependency that makes it difficult to leverage new technologies or more cost-effective solutions that might emerge from a competitive market.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
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: 2005-12-29
Current End Date: 2014-10-16
Potential End Date: 2014-10-16 00:00:00
Last Modified: 2015-03-09
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