DoD's $179.6M Electric Boat Contract: Ship Building & Repair Lacks Competition

Contract Overview

Contract Amount: $179,650,000 ($179.7M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2006-10-01

End Date: 2014-09-11

Contract Duration: 2,902 days

Daily Burn Rate: $61.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NEMMI BASE YEAR

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340, UNITED STATES OF AMERICA

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $179.7 million to ELECTRIC BOAT CORPORATION for work described as: NEMMI BASE YEAR Key points: 1. Significant contract value of $179.6 million awarded. 2. Sole-source award to Electric Boat Corporation indicates limited competition. 3. Contract duration spans nearly 8 years, raising concerns about long-term value. 4. The shipbuilding and repair sector is critical for national defense.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes assessing value difficult. Without competitive bids, it's hard to benchmark pricing against market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, awarded directly to Electric Boat Corporation. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition may result in inflated prices, meaning taxpayers could be paying more than necessary for these shipbuilding services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long contract duration raises questions about sustained cost-effectiveness. Dependence on a single contractor could impact innovation and responsiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Critical defense capability
Established contractor

Sector Analysis

This contract falls within the shipbuilding and repair sector, a vital component of national defense. Spending in this area is often characterized by high costs and specialized capabilities.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award was made directly to a large corporation.

Oversight & Accountability

The 'NOT COMPETED' status suggests potential oversight gaps. Further review is needed to understand the justification for not seeking competitive proposals.

Related Government Programs

Ship Building and Repairing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration (2006-2014)
Lack of transparency in justification for non-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $179.7 million to ELECTRIC BOAT CORPORATION. NEMMI BASE YEAR

Who is the contractor on this award?

The obligated recipient is ELECTRIC BOAT 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 $179.7 million.

What is the period of performance?

Start: 2006-10-01. End: 2014-09-11.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without specific documentation, it's difficult to ascertain the precise reasons. However, the absence of competition raises concerns about whether all potential avenues for cost savings were explored.

How does the cost-plus-fixed-fee structure impact the contractor's incentive to control costs?

Cost-plus-fixed-fee contracts reimburse the contractor for allowable costs plus a predetermined fixed fee. While the fee is fixed, the contractor still bears some risk if costs exceed projections. However, the primary incentive for cost control often lies in the competitive pressure that is absent here, potentially leading to less rigorous cost management.

What is the long-term strategic risk of relying on a single provider for such critical defense assets?

Relying on a single provider for critical defense assets like naval vessels creates significant strategic risks. It can lead to vendor lock-in, stifle innovation, and make the government vulnerable to supply chain disruptions or price increases. It also limits the government's ability to leverage competition to drive down costs and improve service.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002406R4414

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 75 EASTERN POINT RD, GROTON, CT, 06340

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $201,847,266

Exercised Options: $201,147,266

Current Obligation: $179,650,000

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: YES

Timeline