DoD Awards BAE Systems $722M for DDG 102 Availability, Raising Questions on Long-Term Value and Competition
Contract Overview
Contract Amount: $72,233,161 ($72.2M)
Contractor: BAE Systems Maritime Solutions SAN Diego Inc.
Awarding Agency: Department of Defense
Start Date: 2007-12-07
End Date: 2013-08-13
Contract Duration: 2,076 days
Daily Burn Rate: $34.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: POST SHAKEDOWN AVAILABLILITY FOR DDG 102, AND OPTIONS FOR 6 OTHER DDG CLASS SHIPS
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92170
Plain-Language Summary
Department of Defense obligated $72.2 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: POST SHAKEDOWN AVAILABLILITY FOR DDG 102, AND OPTIONS FOR 6 OTHER DDG CLASS SHIPS Key points: 1. Significant contract value for ship availability, impacting naval readiness. 2. BAE Systems is a key player in naval shipbuilding and repair. 3. Potential risks include cost overruns and limited competition for future contracts. 4. Spending falls within the Ship Building and Repair sector.
Value Assessment
Rating: questionable
The contract's cost-plus award fee structure can lead to cost overruns if not managed tightly. Benchmarking against similar availability contracts for DDG-class ships is crucial to assess if the $722M award represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the specific nature of ship availability and the limited number of qualified shipyards could influence future competition.
Taxpayer Impact: Taxpayer funds are being used for critical naval asset maintenance. Ensuring competitive pricing and efficient execution is key to maximizing the value of this investment.
Public Impact
Ensures the operational readiness of the DDG 102 destroyer. Supports jobs in the shipbuilding and repair industry in California. Contributes to the U.S. Navy's overall fleet capability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee structure may incentivize higher costs.
- Limited number of qualified shipyards could reduce future competition.
- Contract duration is extensive, increasing risk of scope creep or unforeseen issues.
Positive Signals
- Awarded under full and open competition.
- Addresses critical naval asset availability.
Sector Analysis
This contract falls under the Ship Building and Repair sector, which is vital for national defense. Spending benchmarks for similar naval vessel maintenance and modernization contracts are essential for evaluating cost-effectiveness.
Small Business Impact
The data does not indicate specific subcontracting opportunities for small businesses. Further analysis would be needed to determine the extent of small business participation in this contract.
Oversight & Accountability
The Department of the Navy is responsible for overseeing this contract. Robust oversight is necessary to manage costs, ensure quality, and verify that the contractor meets all performance requirements.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost overruns due to cost-plus award fee structure.
- Potential for reduced competition in future solicitations.
- Long contract duration increases risk of unforeseen issues.
- Dependence on a single contractor for specific availability needs.
Tags
ship-building-and-repairing, department-of-defense, ca, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $72.2 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. POST SHAKEDOWN AVAILABLILITY FOR DDG 102, AND OPTIONS FOR 6 OTHER DDG CLASS SHIPS
Who is the contractor on this award?
The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO 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 $72.2 million.
What is the period of performance?
Start: 2007-12-07. End: 2013-08-13.
What is the historical cost performance of BAE Systems on similar availability contracts for DDG-class ships?
Historical cost performance data for BAE Systems on similar contracts is essential for a comprehensive value assessment. Analyzing past projects can reveal trends in cost overruns or savings, providing a benchmark against which the current $722M award can be evaluated. This insight helps determine if the pricing is competitive and if the cost-plus award fee structure is being managed effectively to control expenditures.
How might the limited number of qualified shipyards impact future competition and pricing for DDG-class ship availability?
The specialized nature of DDG-class ship maintenance means only a few shipyards possess the necessary facilities and expertise. This limited pool of qualified bidders can reduce competitive pressure in future solicitations, potentially leading to higher prices for taxpayers. The Navy should explore strategies to broaden the competitive base or ensure robust negotiation tactics to mitigate this risk.
What are the key performance indicators (KPIs) used to assess the effectiveness of this availability contract?
Effectiveness is measured by KPIs such as on-time completion of scheduled maintenance, adherence to quality standards, and the successful restoration of the DDG 102 to full operational status. Tracking metrics like vessel availability post-maintenance and the number of repeat deficiencies can also indicate contract effectiveness and the contractor's performance quality.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC (UEI: 217304393)
Address: 2205 E BELT ST, SAN DIEGO, CA, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $101,420,643
Exercised Options: $100,841,441
Current Obligation: $72,233,161
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2007-12-07
Current End Date: 2013-08-13
Potential End Date: 2013-12-06 00:00:00
Last Modified: 2014-12-03
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