Navy awards $93.9M contract for USS Springfield planning and execution to Electric Boat Corporation

Contract Overview

Contract Amount: $93,906,801 ($93.9M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2009-08-14

End Date: 2012-01-15

Contract Duration: 884 days

Daily Burn Rate: $106.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PLANNING AND EXECUTION USS SPRINGFIELD TAS::17 1804::TAS

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $93.9 million to ELECTRIC BOAT CORPORATION for work described as: PLANNING AND EXECUTION USS SPRINGFIELD TAS::17 1804::TAS Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. The contract was not competed, raising questions about potential cost efficiencies. 3. Awarded to a single contractor, Electric Boat Corporation, suggesting a specialized need or limited market. 4. The duration of the contract (884 days) indicates a significant, multi-year undertaking. 5. The contract falls under shipbuilding and repairing, a critical but often high-cost sector. 6. The absence of small business set-asides suggests the prime contractor is expected to handle the majority of the work.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar planning and execution phases. The firm-fixed-price structure provides some cost certainty, but the lack of competition means there's no market-driven validation of the pricing. The raw dollar amount of $93.9 million for planning and execution of a specific vessel's needs is substantial, and without competitive bids, it's difficult to ascertain if it represents optimal value for taxpayer funds.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Electric Boat Corporation, was solicited. This approach is typically used when a unique capability or specialized knowledge is required, or when only one source is capable of meeting the agency's needs. The lack of competition means that the Navy did not benefit from a bidding process that could have potentially driven down costs through market forces.

Taxpayer Impact: Sole-source awards limit the opportunity for competitive pricing, potentially leading to higher costs for taxpayers compared to competed contracts where multiple vendors vie for the business.

Public Impact

The primary beneficiary is the U.S. Navy, which will receive planning and execution services for the USS Springfield. This contract supports the maintenance and readiness of naval assets, crucial for national defense. The work is likely to be performed in Connecticut, where Electric Boat Corporation is based, impacting the local workforce. The contract contributes to the specialized shipbuilding and repair industry, supporting skilled labor in this sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed contract.
Sole-source awards can reduce transparency in pricing and value assessment.
Dependence on a single contractor for critical planning phases can create vendor lock-in.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established contractor like Electric Boat Corporation suggests a high likelihood of successful execution.
Focus on planning and execution indicates a structured approach to a complex project.

Sector Analysis

The shipbuilding and repairing sector is a highly specialized and capital-intensive industry critical to national defense. Contracts in this area often involve complex engineering, long lead times, and significant government oversight. The market is dominated by a few large, experienced firms. This contract for planning and execution fits within the broader context of naval vessel construction and maintenance, a significant area of federal spending.

Small Business Impact

The contract was not competed and does not indicate any small business set-aside provisions. This suggests that the prime contractor, Electric Boat Corporation, is expected to perform the majority of the work, and subcontracting opportunities for small businesses are not explicitly mandated by this award. The impact on the small business ecosystem would depend on Electric Boat's subcontracting practices.

Oversight & Accountability

As a sole-source award, oversight would primarily focus on the contractor's adherence to the firm-fixed-price terms and the successful completion of the defined planning and execution tasks. The Department of the Navy's contracting officers and program managers are responsible for monitoring performance. Transparency is limited due to the non-competitive nature of the award, and specific Inspector General jurisdiction would depend on the nature of any potential issues arising.

Related Government Programs

Naval Shipbuilding Programs
Submarine Construction and Maintenance
Defense Procurement Contracts
Ship Building and Repairing Services

Risk Flags

Sole-source award limits price competition.
Potential for cost overruns if initial estimates are inaccurate.
Lack of transparency in pricing justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $93.9 million to ELECTRIC BOAT CORPORATION. PLANNING AND EXECUTION USS SPRINGFIELD TAS::17 1804::TAS

Who is the contractor on this award?

The obligated recipient is ELECTRIC BOAT CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $93.9 million.

What is the period of performance?

Start: 2009-08-14. End: 2012-01-15.

What is Electric Boat Corporation's track record with similar sole-source contracts for naval vessel planning and execution?

Electric Boat Corporation (EBC) has a long and established history as a primary contractor for U.S. Navy submarines, including significant roles in planning and execution phases for various classes of vessels. As a sole-source provider for many submarine-related needs, EBC frequently receives contracts without full and open competition due to its specialized facilities, workforce, and unique expertise. Analyzing EBC's past sole-source awards for similar planning and execution tasks would reveal patterns in contract value, duration, and performance outcomes. While specific data on all past sole-source planning contracts may not be publicly detailed, EBC's consistent role in major submarine programs suggests a proven, albeit non-competitively validated, capability in these areas. The Navy's reliance on EBC for these critical functions underscores its unique position in the defense industrial base.

How does the $93.9 million cost compare to similar planning and execution contracts for naval vessels?

Directly comparing the $93.9 million cost of this sole-source contract for the USS Springfield's planning and execution to other naval vessel contracts is challenging due to the unique nature of sole-source awards and the specific phase of work. Planning and execution phases can vary significantly in scope and complexity depending on the vessel type, its class, and the specific requirements. However, considering the overall cost of constructing a modern naval vessel, which can run into billions of dollars, $93.9 million for the detailed planning and initial execution phases represents a significant but potentially proportionate investment. Without access to EBC's detailed cost breakdown or comparable sole-source bids for similar planning efforts, a definitive value-for-money assessment against market rates is difficult. The Navy likely has internal benchmarks and historical data to justify this expenditure for a sole-source award.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risk associated with awarding a $93.9 million contract on a sole-source basis is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, there is less incentive for the contractor, Electric Boat Corporation, to offer the most cost-effective solution. This can lead to taxpayers paying a premium. Another risk is reduced transparency; the justification for the price and the overall value proposition are harder to scrutinize when there isn't a competitive market to benchmark against. Furthermore, sole-source awards can foster vendor lock-in, making it difficult for the government to switch providers or negotiate more favorable terms in the future for similar services. There's also a risk that innovation might be stifled, as the contractor may face less pressure to develop novel or more efficient approaches compared to a competitive environment.

How effective is the firm-fixed-price contract type in managing costs for this specific planning and execution phase?

The firm-fixed-price (FFP) contract type is generally considered effective in managing costs for well-defined scopes of work, such as planning and execution phases, as it shifts most of the cost risk to the contractor. For this $93.9 million contract with Electric Boat Corporation, the FFP structure means that the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This provides the Department of the Navy with significant cost certainty and predictability. However, the effectiveness of FFP in this sole-source context is contingent on the accuracy of the initial cost estimates and the contractor's ability to manage their expenses. If the initial estimates were too high, the government might overpay. Conversely, if the contractor significantly underestimates costs, they may cut corners, potentially impacting quality, though the fixed price aims to prevent this.

What are the historical spending patterns for shipbuilding and repair contracts awarded by the Department of the Navy, and how does this contract fit?

The Department of the Navy historically represents one of the largest components of federal defense spending, with a substantial portion allocated to shipbuilding and repair. This sector is characterized by large, complex, and long-term contracts, often awarded to a limited number of prime contractors due to the specialized nature of the work. Spending patterns in this area are driven by strategic defense needs, fleet modernization plans, and maintenance requirements. Contracts like the $93.9 million for the USS Springfield's planning and execution are typical within this spending category, representing the initial investment in bringing a vessel through its lifecycle. While the specific amount is significant, it is likely a fraction of the total cost for a major naval asset. Historical data would show a consistent, high-volume expenditure in shipbuilding and repair, with sole-source or limited-competition awards being common for specialized components or unique vessel classes.

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: N0002409R4400

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 75 EASTERN POINT RD, GROTON, CT, 06340

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

Financial Breakdown

Contract Ceiling: $94,193,310

Exercised Options: $94,193,310

Current Obligation: $93,906,801

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline