DoD's $892M USS Boxer Availability Contract Awarded to National Steel and Shipbuilding Company

Contract Overview

Contract Amount: $892,369,913 ($892.4M)

Contractor: National Steel and Shipbuilding Company

Awarding Agency: Department of Defense

Start Date: 2007-01-29

End Date: 2020-05-19

Contract Duration: 4,859 days

Daily Burn Rate: $183.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: F07 EXECUTION PLANNING FOR USS BOXER (LHD 4) FY 07 NON DRY-DOCKING CNO SCHEDULED AVAILABILITY.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92136

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $892.4 million to NATIONAL STEEL AND SHIPBUILDING COMPANY for work described as: F07 EXECUTION PLANNING FOR USS BOXER (LHD 4) FY 07 NON DRY-DOCKING CNO SCHEDULED AVAILABILITY. Key points: 1. The contract, valued at $892.4 million, covers execution planning for the USS Boxer (LHD 4) FY07 non dry-docking availability. 2. Awarded via full and open competition, the contract went to National Steel and Shipbuilding Company. 3. The contract type is Cost Plus Award Fee (CPAF), which can lead to higher costs if performance incentives are not carefully managed. 4. The sector is Ship Building and Repairing, a critical but often complex area for defense spending.

Value Assessment

Rating: questionable

The Cost Plus Award Fee (CPAF) contract type allows for cost reimbursement plus an award fee based on performance. While intended to incentivize good performance, CPAF contracts can sometimes lead to higher overall costs compared to fixed-price contracts if award criteria are not strictly defined or if performance targets are easily met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust process for soliciting bids. However, the CPAF structure means the final price is not fixed, and the award fee component could increase the total expenditure beyond initial estimates, impacting price discovery.

Taxpayer Impact: Taxpayer funds are committed to a large-scale naval vessel repair. The CPAF structure introduces uncertainty in the final cost, meaning taxpayers could potentially bear higher expenses than initially projected if performance incentives are not tightly controlled.

Public Impact

Ensures the operational readiness of a key naval asset, the USS Boxer (LHD 4). Supports jobs and economic activity within the shipbuilding and repair sector, particularly in California. Represents a significant investment in maintaining the U.S. Navy's fleet capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee (CPAF) contract type can lead to cost overruns.
Long contract duration (4859 days) increases risk of scope creep and cost escalation.
Lack of specific performance metrics for award fee makes oversight challenging.

Positive Signals

Awarded through full and open competition, promoting a competitive bidding process.
Addresses a critical need for naval vessel maintenance and readiness.

Sector Analysis

The shipbuilding and repairing sector is characterized by large, complex projects with long lead times and significant capital investment. Defense contracts in this area often involve specialized requirements and stringent quality standards, making benchmarks difficult to establish due to unique vessel needs.

Small Business Impact

There is no specific indication in the provided data whether small businesses were involved as subcontractors or prime contractors in this award. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The CPAF contract type necessitates robust oversight to ensure performance targets are met and award fees are justified. Regular reviews of progress, cost expenditures, and adherence to specifications are crucial for accountability and to prevent potential cost overruns.

Related Government Programs

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

Risk Flags

Cost Plus Award Fee (CPAF) contract type.
Long contract duration (4859 days).
Potential for cost overruns.
Lack of detailed performance metrics in summary data.
Complexity of naval ship repair projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $892.4 million to NATIONAL STEEL AND SHIPBUILDING COMPANY. F07 EXECUTION PLANNING FOR USS BOXER (LHD 4) FY 07 NON DRY-DOCKING CNO SCHEDULED AVAILABILITY.

Who is the contractor on this award?

The obligated recipient is NATIONAL STEEL AND SHIPBUILDING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $892.4 million.

What is the period of performance?

Start: 2007-01-29. End: 2020-05-19.

What specific performance metrics were used to determine the award fee, and how were they aligned with the government's objectives for the USS Boxer availability?

The provided data does not detail the specific performance metrics tied to the award fee. A thorough review of the contract's Statement of Work (SOW) and award fee plan would be necessary to understand these metrics. Effective alignment ensures that the contractor is incentivized to meet or exceed government expectations regarding cost, schedule, and quality, thereby maximizing the value of taxpayer investment.

Given the CPAF structure and the long duration, what are the primary risks associated with cost escalation, and what mitigation strategies are in place?

The primary risks include uncontrolled cost growth due to the cost-reimbursement nature and potential for scope creep over the extended period. Mitigation strategies typically involve stringent cost controls, regular audits, clear change order processes, and well-defined performance criteria for the award fee to discourage unnecessary expenditures and ensure contractor efficiency.

How does the execution planning for this specific availability contribute to the overall operational effectiveness and readiness of the LHD 4 class of ships?

Effective execution planning ensures that the USS Boxer undergoes necessary maintenance and upgrades to maintain its operational capabilities and extend its service life. This directly impacts the Navy's ability to deploy and sustain amphibious assault operations, contributing to overall fleet readiness and national security objectives. Proper planning minimizes downtime and ensures the vessel is available for its intended missions.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002407R4013

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 2798 EAST HARBOR DRIVE, SAN DIEGO, CA, 92113

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $913,605,306

Exercised Options: $892,757,530

Current Obligation: $892,369,913

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline