Navy's $2.57B CVN 71 Refueling Overhaul Awarded to Huntington Ingalls Inc. with No Competition
Contract Overview
Contract Amount: $2,574,356,598 ($2.6B)
Contractor: Huntington Ingalls Inc
Awarding Agency: Department of Defense
Start Date: 2009-08-26
End Date: 2013-09-25
Contract Duration: 1,491 days
Daily Burn Rate: $1.7M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: CVN 71 REFUELING COMPLEX OVERHAUL ACCOMPLISHMENT.
Place of Performance
Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $2.57 billion to HUNTINGTON INGALLS INC for work described as: CVN 71 REFUELING COMPLEX OVERHAUL ACCOMPLISHMENT. Key points: 1. Significant investment in a critical naval asset, the USS George H.W. Bush (CVN 77). 2. Sole-source award to Huntington Ingalls Inc., the sole builder of U.S. aircraft carriers. 3. High contract value indicates complex and lengthy overhaul process. 4. Potential for cost overruns given the Cost Plus Incentive Fee (CPIF) structure.
Value Assessment
Rating: questionable
The contract value of $2.57 billion for a refueling complex overhaul is substantial. Without competitive bids, it's difficult to assess if this price is optimal. The CPIF structure allows for shared savings and cost overruns, suggesting a focus on performance incentives over strict cost control.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, likely due to Huntington Ingalls Inc. being the only entity capable of performing such a specialized and complex overhaul on a U.S. Navy aircraft carrier. The lack of competition limits price discovery and negotiation leverage.
Taxpayer Impact: Taxpayers bear the full cost of this essential but non-competed overhaul, with potential for costs to exceed initial estimates depending on performance incentives and cost overruns.
Public Impact
Ensures the continued operational readiness of a key U.S. Navy aircraft carrier. Supports high-skilled jobs in shipbuilding and repair sectors. Demonstrates significant government investment in national defense infrastructure. Highlights the unique capabilities required for nuclear-powered aircraft carrier maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Incentive Fee structure
- Long contract duration
- Potential for cost overruns
Positive Signals
- Critical national defense asset maintenance
- Ensures carrier operational readiness
- Supports specialized industrial base
Sector Analysis
This contract falls within the shipbuilding and repair sector, specifically for naval vessels. Major overhauls of this magnitude are typically sole-sourced due to the highly specialized nature of nuclear-powered aircraft carriers and the limited number of facilities capable of performing such work.
Small Business Impact
This contract was awarded directly to Huntington Ingalls Inc., a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The Department of the Navy is responsible for overseeing this contract. Given the sole-source nature and the complexity of the work, robust oversight is crucial to ensure cost control, adherence to schedule, and quality of execution to protect taxpayer interests.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits price competition.
- CPIF contract type can lead to cost overruns.
- Long duration increases risk exposure.
- High dollar value requires stringent oversight.
- Dependency on a single contractor.
Tags
ship-building-and-repairing, department-of-defense, va, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $2.57 billion to HUNTINGTON INGALLS INC. CVN 71 REFUELING COMPLEX OVERHAUL 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 $2.57 billion.
What is the period of performance?
Start: 2009-08-26. End: 2013-09-25.
What is the historical cost performance for similar refueling complex overhauls on aircraft carriers?
Historical data on similar refueling complex overhauls is essential for benchmarking. Without it, assessing the $2.57 billion price tag's reasonableness is challenging. Past projects can reveal trends in cost overruns, schedule delays, and the effectiveness of incentive fee structures in managing these complex, long-term endeavors.
What are the specific risks associated with the Cost Plus Incentive Fee (CPIF) structure for this overhaul?
The CPIF structure introduces risks related to cost control. While it incentivizes efficiency, it also allows for shared cost overruns, potentially increasing the final price beyond initial estimates. Effective monitoring and clear performance metrics are vital to mitigate the risk of inflated costs and ensure value for money.
How will the effectiveness of this overhaul be measured to ensure long-term operational readiness of the CVN 71?
Effectiveness will be measured through a combination of technical performance metrics, adherence to overhaul specifications, and post-overhaul testing. Key indicators include the successful completion of all planned maintenance, system upgrades, and the carrier's subsequent performance during sea trials and operational deployments, ensuring it meets readiness standards.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002409R2107
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 BLDG 520/3, NEWPORT NEWS, VA, 23607
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $2,655,008,020
Exercised Options: $2,655,008,020
Current Obligation: $2,574,356,598
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-08-26
Current End Date: 2013-09-25
Potential End Date: 2013-09-25 00:00:00
Last Modified: 2025-12-19
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