Navy awards $240M for Iraqi patrol boats, weapon systems, and engineering services to Swiftships Shipbuilders

Contract Overview

Contract Amount: $240,117,441 ($240.1M)

Contractor: Swiftships Shipbuilders, L.L.C.

Awarding Agency: Department of Defense

Start Date: 2009-09-25

End Date: 2014-01-31

Contract Duration: 1,589 days

Daily Burn Rate: $151.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IRAQI 35M PATROL BOATS #1, WEAPON SYSTEMS, SPARES AND ENGINEERING SERVICES.

Place of Performance

Location: MORGAN CITY, SAINT MARY County, LOUISIANA, 70380

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $240.1 million to SWIFTSHIPS SHIPBUILDERS, L.L.C. for work described as: IRAQI 35M PATROL BOATS #1, WEAPON SYSTEMS, SPARES AND ENGINEERING SERVICES. Key points: 1. The contract value of $240 million represents a significant investment in naval capabilities for Iraq. 2. The procurement includes weapon systems and engineering services, indicating a comprehensive support package. 3. The duration of the contract (over 4 years) suggests a long-term commitment to the program. 4. The award was a definitive contract, implying a structured and agreed-upon set of terms. 5. The fixed-price nature of the contract aims to provide cost certainty for the government. 6. The contract was not competed, raising questions about potential cost efficiencies and market fairness.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific details on the patrol boats and weapon systems procured. However, a $240 million award over approximately four years for specialized naval assets and services indicates a substantial expenditure. The lack of competition makes it difficult to assess if the pricing reflects market rates or if there were opportunities for better value through a competitive bidding process. Further analysis would require comparing the scope and specifications to similar naval procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from multiple bidders. This approach is typically used when only one source is capable of meeting the government's needs, or in specific circumstances where competition is not feasible or advantageous. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the best possible value.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. Without competing offers, there is a risk that the awarded price is higher than it would have been in a competitive environment.

Public Impact

The primary beneficiaries are the Iraqi forces who will receive patrol boats and associated weapon systems, enhancing their maritime security capabilities. The services delivered include the provision of patrol boats, weapon systems, spare parts, and engineering support. The geographic impact is primarily focused on Iraq's maritime domain, supporting its naval operations. The contract supports the defense industrial base, specifically shipbuilding and weapons manufacturing, potentially impacting the workforce in those sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce transparency and accountability in the procurement process.
The long contract duration could present risks if requirements change or performance issues arise.
Dependence on a single contractor for critical naval assets and services.

Positive Signals

The contract provides essential naval assets and support to a partner nation.
The fixed-price contract offers some level of cost predictability.
The inclusion of engineering services suggests a commitment to long-term operational readiness.

Sector Analysis

The defense sector, particularly naval shipbuilding and armament, is characterized by high costs, long lead times, and specialized expertise. This contract falls within the broader category of defense procurement, supporting foreign military sales or international security cooperation initiatives. The market for such specialized vessels and integrated weapon systems is often limited to a few key contractors, which can influence competition dynamics. Comparable spending benchmarks would involve analyzing other large-scale naval asset procurements for allied nations.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the specialized nature of naval shipbuilding and weapon systems, it is likely that the prime contractor is a large entity. Subcontracting opportunities for small businesses may exist in areas such as component manufacturing or specialized services, but this would depend on the prime contractor's strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be defined within the contract terms, including performance standards and delivery schedules. Transparency might be limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigate fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales (FMS)
Naval Vessel Procurement
Defense Security Cooperation
Maritime Security Programs

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $240.1 million to SWIFTSHIPS SHIPBUILDERS, L.L.C.. IRAQI 35M PATROL BOATS #1, WEAPON SYSTEMS, SPARES AND ENGINEERING SERVICES.

Who is the contractor on this award?

The obligated recipient is SWIFTSHIPS SHIPBUILDERS, L.L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $240.1 million.

What is the period of performance?

Start: 2009-09-25. End: 2014-01-31.

What specific types of patrol boats and weapon systems were procured under this contract?

The provided data does not specify the exact types of patrol boats or weapon systems. However, the contract number (336612) and description suggest a focus on patrol craft suitable for maritime security operations. The inclusion of 'weapon systems' implies armaments such as machine guns, cannons, or potentially more advanced systems integrated onto the vessels. The 'engineering services' component likely covers design, integration, testing, training, and maintenance support to ensure the operational readiness and effectiveness of the procured assets.

How does the per-unit cost of these patrol boats compare to similar vessels procured by other nations or the U.S. Navy?

A direct per-unit cost comparison is not feasible with the provided data. The total contract value of $240 million spread over an unspecified number of patrol boats and including weapon systems and engineering services makes a simple division misleading. To conduct a meaningful comparison, one would need to know the exact quantity of boats, their specifications (size, speed, endurance, armament), and the cost breakdown of the weapon systems and services. Without this granular information, benchmarking against similar naval procurements is speculative.

What is the track record of Swiftships Shipbuilders in delivering complex naval contracts?

Information on Swiftships Shipbuilders' track record for complex naval contracts is not detailed in the provided data. As the sole-source awardee, their capability to fulfill this specific requirement was presumably assessed by the Department of the Navy. A comprehensive review of their past performance, including on-time delivery, quality of work, and adherence to budget on previous contracts, would be necessary to fully evaluate their reliability for this $240 million award.

What are the potential risks associated with a sole-source award for naval assets?

Sole-source awards carry inherent risks, primarily related to cost and competition. Without competitive bidding, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to higher costs for the government. Furthermore, the lack of multiple bidders limits the government's ability to explore alternative solutions or technologies that might be more suitable or cost-effective. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier for critical assets and support, potentially limiting future flexibility.

What is the historical spending pattern for similar Iraqi naval modernization programs?

The provided data does not include historical spending patterns for Iraqi naval modernization. This specific contract represents a significant investment, but its context within broader Iraqi defense spending or previous naval programs is unknown. Analyzing historical data would require accessing broader defense budget information and procurement records related to Iraq's military development over time. Understanding past investments could help assess the scale and strategic importance of this particular patrol boat acquisition.

How does the inclusion of 'engineering services' impact the overall value and risk of this contract?

The inclusion of engineering services alongside the patrol boats and weapon systems suggests a comprehensive approach to ensuring the operational effectiveness and longevity of the assets. This can enhance value by providing crucial support like design finalization, integration, testing, training, and potentially maintenance planning. However, it also introduces complexity and potential risks. The scope and deliverables of these services must be clearly defined to avoid cost overruns or performance issues. Effective management of the engineering component is critical for realizing the full intended value of the contract.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Boat Building

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002409R2256

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1105 LEVEE RD, MORGAN CITY, LA, 70380

Business Categories: Category Business, Limited Liability Corporation, Small Business

Financial Breakdown

Contract Ceiling: $281,415,441

Exercised Options: $240,117,441

Current Obligation: $240,117,441

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline