DoD awards $15.1M for Steam Plant Manual Work to Huntington Ingalls Inc

Contract Overview

Contract Amount: $15,131,802 ($15.1M)

Contractor: Huntington Ingalls Inc

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2013-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $8.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BASIC AWARD FOR STEAM PLANT MANUAL WORK.

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $15.1 million to HUNTINGTON INGALLS INC for work described as: BASIC AWARD FOR STEAM PLANT MANUAL WORK. Key points: 1. Awarded to a single large business, indicating potential lack of small business participation. 2. Contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 3. The contract duration of 5 years suggests a long-term need for these services. 4. Sector is Defense, specifically Ship Building and Repairing, a critical area for national security.

Value Assessment

Rating: fair

The contract value of $15.1M over 5 years is substantial. Without specific benchmarks for steam plant manual work in shipbuilding, it's difficult to definitively assess pricing. The Cost Plus Fixed Fee structure warrants scrutiny for potential cost inefficiencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, suggesting a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as competition is absent.

Taxpayer Impact: The lack of competition in this sole-source award may result in a higher cost to taxpayers than if the contract had been competitively bid.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term nature of the contract raises questions about ongoing cost management. Potential for cost overruns exists with the Cost Plus Fixed Fee contract type. Limited visibility into the specific services provided under 'manual work'.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of small business participation

Positive Signals

Award to a major defense contractor
Long-term contract addressing a sustained need

Sector Analysis

This contract falls within the Defense sector, specifically Ship Building and Repairing. Spending in this area is critical for national security, but often involves complex and high-value contracts. Benchmarking is challenging due to the specialized nature of the work.

Small Business Impact

The contract was awarded to Huntington Ingalls Inc., a large business, and there is no indication of small business subcontracting. This suggests a missed opportunity to support small businesses in the defense industrial base.

Oversight & Accountability

The sole-source nature of this award warrants careful oversight to ensure fair pricing and efficient use of funds. The Department of the Navy should provide justification for the lack of competition and monitor cost performance closely.

Related Government Programs

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

Risk Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Lack of small business participation noted.
Long contract duration requires sustained oversight.
Limited transparency on 'manual work' specifics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.1 million to HUNTINGTON INGALLS INC. BASIC AWARD FOR STEAM PLANT MANUAL WORK.

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 $15.1 million.

What is the period of performance?

Start: 2008-10-01. End: 2013-09-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific documentation, it's presumed the Department of the Navy determined Huntington Ingalls Inc. was the only source capable of performing the required steam plant manual work. Steps to ensure fair and reasonable pricing would normally include market research, cost analysis, and negotiation, though the effectiveness of these in a sole-source scenario is inherently limited compared to competitive processes.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific service, and how are they being mitigated?

The primary risk of a CPFF contract is that the contractor is incentivized to incur costs to increase their fixed fee profit margin, potentially leading to cost overruns. Mitigation strategies include robust government oversight, detailed cost tracking, and clear performance metrics. For steam plant manual work, the government must diligently monitor labor hours, material costs, and the efficiency of the work performed to control overall expenditure.

How does this $15.1M award contribute to the overall effectiveness of the Navy's shipbuilding and repair capabilities, and what is the long-term value proposition?

This award is intended to ensure the operational readiness and maintenance of steam plants within naval vessels, which are critical for propulsion and power generation. The long-term value lies in maintaining the fleet's capability and extending the service life of these assets. However, the effectiveness is contingent on the quality of the work performed and the cost-efficiency of the contract, which are areas requiring ongoing scrutiny due to the contract type and sole-source nature.

Industry Classification

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

Product/Service Code: FURNACE/STEAM/DRYING; NUCL REACTOR

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002408R2105

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc (UEI: 967362331)

Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,878,645

Exercised Options: $15,878,645

Current Obligation: $15,131,802

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline