DoD's $670M Ship Repair Contract Awarded to Huntington Ingalls Inc. in FY08
Contract Overview
Contract Amount: $670,736,987 ($670.7M)
Contractor: Huntington Ingalls Inc
Awarding Agency: Department of Defense
Start Date: 2008-04-11
End Date: 2010-04-19
Contract Duration: 738 days
Daily Burn Rate: $908.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: FY08 EDSRA ACCOMPLISHMENT
Place of Performance
Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $670.7 million to HUNTINGTON INGALLS INC for work described as: FY08 EDSRA ACCOMPLISHMENT Key points: 1. Significant contract value of $670.7M for ship building and repair. 2. Awarded to a single large business, raising questions about competition. 3. Contract type is Cost Plus Incentive Fee, which can lead to cost overruns. 4. Sector is Defense, specifically shipbuilding and repair, a critical area for national security.
Value Assessment
Rating: questionable
The contract value of $670.7M is substantial. Benchmarking against similar shipbuilding and repair contracts is difficult without more specific details on the scope of work. The Cost Plus Incentive Fee structure suggests potential for costs to exceed initial estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down the price.
Taxpayer Impact: The lack of competition likely resulted in a higher price than if the contract had been competitively bid, impacting taxpayer funds negatively.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. The Department of Defense relies on this contract for critical shipbuilding and repair capabilities. The long duration of the contract (2 years) means sustained potential for cost inefficiencies.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Incentive Fee contract type
- Large contract value
Positive Signals
- Addresses critical shipbuilding and repair needs for the Navy
Sector Analysis
This contract falls within the Defense sector, specifically shipbuilding and repair. Spending in this area is crucial for maintaining naval capabilities. Benchmarks are highly variable based on ship type and repair complexity.
Small Business Impact
The contract was awarded to Huntington Ingalls Inc., a large business. There is no indication of small business participation in this specific award, which is a missed opportunity for small business engagement.
Oversight & Accountability
The 'VA' status suggests it underwent some level of review, but the sole-source nature warrants further scrutiny regarding justification and potential for future competition. Accountability for cost control under the incentive fee structure is key.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Cost Plus Incentive Fee structure carries inherent cost overrun risk.
- No apparent small business participation.
- Significant contract value requires robust oversight.
Tags
ship-building-and-repairing, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $670.7 million to HUNTINGTON INGALLS INC. FY08 EDSRA ACCOMPLISHMENT
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 $670.7 million.
What is the period of performance?
Start: 2008-04-11. End: 2010-04-19.
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 available sources. Without specific documentation, it's difficult to ascertain the precise reason. However, sole-source contracts often bypass competitive processes, potentially leading to higher costs and reduced innovation compared to open competition.
What are the potential risks associated with the Cost Plus Incentive Fee (CPIF) contract type in this context?
CPIF contracts incentivize both the contractor and the government to control costs. However, they can be complex to manage and may still result in costs exceeding initial estimates if targets are not met or if the incentive structure is not sufficiently robust. This can lead to budget uncertainty and potential overspending for the government.
How effectively did this contract fulfill the Department of the Navy's shipbuilding and repair requirements?
The effectiveness of the contract in fulfilling requirements is not directly measurable from the provided data. While the contract was awarded and likely executed, the lack of competition and the CPIF structure raise concerns about overall value for money. A post-award review of performance against objectives and cost efficiency would be necessary.
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: N0002408R2100
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Huntington Ingalls Industries, Inc
Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $699,480,970
Exercised Options: $699,480,970
Current Obligation: $670,736,987
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-04-11
Current End Date: 2010-04-19
Potential End Date: 2010-04-19 00:00:00
Last Modified: 2025-11-12
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