Naval Reactors Contract with Bechtel Plant Machinery Exceeds $527 Million for Ship Building and Repair
Contract Overview
Contract Amount: $527,781,301 ($527.8M)
Contractor: Bechtel Plant Machinery, Inc.
Awarding Agency: Department of Defense
Start Date: 2009-10-19
End Date: 2023-09-30
Contract Duration: 5,094 days
Daily Burn Rate: $103.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NAVAL REACTORS
Place of Performance
Location: MONROEVILLE, ALLEGHENY County, PENNSYLVANIA, 15146
Plain-Language Summary
Department of Defense obligated $527.8 million to BECHTEL PLANT MACHINERY, INC. for work described as: NAVAL REACTORS Key points: 1. Significant contract value of over $527 million highlights long-term commitment to naval infrastructure. 2. Sole-source nature raises questions about potential lack of competitive pricing and innovation. 3. Extended contract duration (2009-2023) suggests a critical, ongoing need for specialized services. 4. Focus on 'Ship Building and Repair' indicates a core defense capability area.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without benchmarks from similar competitively awarded contracts, it's hard to determine if the pricing is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This approach bypasses the competitive bidding process, potentially leading to higher costs and reduced pressure for cost efficiency.
Taxpayer Impact: The lack of competition in this large contract may result in taxpayers paying a premium for services that could potentially be procured at a lower cost through a competitive process.
Public Impact
Ensures continued maintenance and potential construction of critical naval assets. Supports specialized jobs in shipbuilding and repair sectors. Long-term funding commitment provides stability for the contractor and related supply chains. Potential for cost overruns due to sole-source and cost-plus contract type.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
- Sole-source award
Positive Signals
- Critical national security function
- Long-term stability for contractor
- Specialized expertise maintained
Sector Analysis
The shipbuilding and repair sector is vital for national defense, often involving complex, long-term projects. Spending benchmarks in this area are highly variable due to the specialized nature of naval vessels and infrastructure.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded to Bechtel Plant Machinery, Inc. Further analysis would be needed to determine if subcontracting opportunities were pursued.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure costs are reasonable and performance meets requirements. Regular reviews of the cost-plus-fixed-fee structure are essential for accountability.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns
- Limited transparency in pricing
- Extended contract duration without clear re-competition
Tags
ship-building-and-repairing, department-of-defense, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $527.8 million to BECHTEL PLANT MACHINERY, INC.. NAVAL REACTORS
Who is the contractor on this award?
The obligated recipient is BECHTEL PLANT MACHINERY, 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 $527.8 million.
What is the period of performance?
Start: 2009-10-19. End: 2023-09-30.
What is the justification for the sole-source award, and has it been reviewed periodically?
Sole-source awards are typically justified by unique capabilities or urgent needs. Periodic reviews are crucial to ensure the justification remains valid and that competition is not feasible. Without this information, it's difficult to assess if taxpayers are receiving fair value or if alternative solutions were adequately explored.
How does the cost-plus-fixed-fee structure impact cost control and potential overruns in this long-term contract?
Cost-plus-fixed-fee contracts can incentivize contractors to increase costs, as their fee is a percentage of the total cost. While the fixed fee provides some predictability, the overall cost can escalate significantly. This structure, especially over a long duration like 14 years, requires robust oversight to manage expenses and prevent unnecessary spending.
What are the key performance indicators (KPIs) for this contract, and how has the contractor performed against them?
Key performance indicators for naval shipbuilding and repair contracts typically include adherence to schedule, quality of work, safety records, and budget management. Performance against these KPIs is essential for evaluating the effectiveness of the contract and the contractor's ability to meet critical defense needs. Without access to performance data, assessing the contract's true value is challenging.
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
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Bechtel Group, Inc. (UEI: 094878980)
Address: 3500 TECHNOLOGY DR, MONROEVILLE, PA, 15146
Business Categories: Category Business, Corporate Entity Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $527,781,301
Exercised Options: $527,781,301
Current Obligation: $527,781,301
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-10-19
Current End Date: 2023-09-30
Potential End Date: 2023-09-30 00:00:00
Last Modified: 2018-11-19
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