DoD awards $236M for LPD 17 Class Engineering Services to Huntington Ingalls Inc

Contract Overview

Contract Amount: $236,099,646 ($236.1M)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2010-02-10

End Date: 2016-03-31

Contract Duration: 2,241 days

Daily Burn Rate: $105.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LPD 17 CLASS ENGINEERING SERVICES

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39568

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $236.1 million to HUNTINGTON INGALLS INCORPORATED for work described as: LPD 17 CLASS ENGINEERING SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant duration of over 6 years suggests a long-term need for these services. 3. Cost-plus-fixed-fee contract type may incentivize cost overruns. 4. The contract supports the LPD 17 class of amphibious transport docks, crucial for naval operations. 5. No small business set-aside was applied, indicating potential missed opportunities for smaller firms. 6. The contract's value is substantial, reflecting the complexity and importance of naval shipbuilding and repair.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific focus on LPD 17 class engineering. However, the duration and cost-plus-fixed-fee structure warrant scrutiny for potential cost efficiencies. Comparing this to other sole-source, long-term naval engineering contracts would be necessary for a more precise value assessment. The fixed fee component provides some cost control, but the overall cost-plus nature leaves room for variability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Huntington Ingalls Incorporated, was solicited. This lack of competition limits the government's ability to secure the best possible price through market forces. The justification for a sole-source award would typically involve unique capabilities or circumstances that preclude competitive bidding.

Taxpayer Impact: The absence of competition means taxpayers may not have received the most cost-effective solution, as there was no pressure from competing bids to drive down prices.

Public Impact

The primary beneficiaries are the U.S. Navy, which receives essential engineering support for its LPD 17 class ships. Services delivered include critical engineering support vital for the maintenance, modernization, and operational readiness of amphibious transport docks. The geographic impact is likely concentrated around naval shipyards and facilities where Huntington Ingalls Incorporated operates, primarily in Mississippi. Workforce implications include the employment of skilled engineers, technicians, and support staff within Huntington Ingalls Incorporated and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee contract type can lead to higher costs if not managed closely.
Long contract duration may obscure potential for more frequent, competitive re-solicitations.
Lack of small business participation noted.

Positive Signals

Contract supports critical naval assets (LPD 17 class).
Experienced contractor with a long history in shipbuilding and repair.
Fixed fee component provides a baseline cost control mechanism.

Sector Analysis

This contract falls within the shipbuilding and repair sector, a critical component of the defense industrial base. The LPD 17 class represents a significant investment in naval capability. Spending in this sector is often characterized by large, long-term contracts due to the complexity and cost of naval vessels. Comparable spending benchmarks would involve other major naval shipbuilding and sustainment contracts.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the prime contractor, Huntington Ingalls Incorporated, is expected to perform the majority of the work. Opportunities for small businesses would likely be through subcontracts awarded by Huntington Ingalls, the extent of which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Given the sole-source nature and cost-plus structure, rigorous oversight of expenditures, performance, and adherence to contract terms is crucial. The Inspector General for the Department of Defense may also conduct audits or investigations into the contract's execution.

Related Government Programs

Naval Ship Production
Amphibious Warfare Ships
Ship Maintenance and Repair
Defense Logistics Support
Naval Engineering Services

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $236.1 million to HUNTINGTON INGALLS INCORPORATED. LPD 17 CLASS ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $236.1 million.

What is the period of performance?

Start: 2010-02-10. End: 2016-03-31.

What is the historical spending trend for LPD 17 Class Engineering Services with Huntington Ingalls Incorporated?

The provided data reflects a single definitive contract awarded in 2010 with an end date in 2016, totaling approximately $236 million. Without access to a broader contract history database or specific contract line item details, it is difficult to establish a comprehensive spending trend. However, this single award indicates a significant, multi-year commitment to Huntington Ingalls for these specific services during that period. Further analysis would require examining prior and subsequent contracts related to LPD 17 class engineering, potentially revealing patterns of sole-source awards or shifts in contracting strategies over time.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar naval engineering services?

The Cost-Plus-Fixed-Fee (CPFF) contract type, used here, reimburses the contractor for allowable costs plus a fixed fee representing profit. This structure is often employed when the scope of work is not precisely defined or involves significant uncertainty, aiming to provide flexibility. However, it carries a risk of cost overruns, as the contractor is incentivized to incur costs to justify the fixed fee. In contrast, Firm-Fixed-Price (FFP) contracts offer greater price certainty for the government but require a well-defined scope. Other cost-reimbursement types, like Cost-Plus-Incentive-Fee (CPIF), introduce performance incentives. For naval engineering, the choice depends on risk assessment and scope definition; CPFF might be chosen for complex, evolving sustainment needs, but FFP or CPIF could yield better value if requirements are stable and measurable.

What are the specific risks associated with a sole-source award for critical defense services like LPD 17 engineering?

Sole-source awards for critical defense services present several risks. Primarily, the lack of competition can lead to inflated prices, as the government cannot leverage market forces to secure the best value. This can result in taxpayers paying more than necessary. Secondly, it reduces the incentive for the sole-source provider to innovate or improve efficiency, as there is no competitive pressure. Thirdly, it can create vendor lock-in, making it difficult and costly to switch providers in the future, even if performance or pricing becomes unsatisfactory. Finally, it raises concerns about transparency and fairness in the procurement process, potentially leading to perceptions of favoritism or missed opportunities for other capable contractors.

What is the track record of Huntington Ingalls Incorporated in delivering engineering services for naval vessels?

Huntington Ingalls Industries (HII), including its relevant subsidiaries, has a long and extensive track record in shipbuilding and complex engineering services for the U.S. Navy. They are a primary builder of naval warships, including aircraft carriers and amphibious assault ships, and have been involved in the LPD 17 program since its inception. Their experience encompasses design, construction, modernization, and sustainment engineering. While specific performance metrics for this particular $236 million contract (2010-2016) are not detailed in the provided data, HII's overall position as a major defense contractor suggests a substantial capacity and history of delivering large-scale naval projects. However, like any large contractor, specific project performance can vary, and detailed reviews of past performance would be necessary for a complete assessment.

How does the $236 million contract value compare to the overall budget for LPD 17 class sustainment or shipbuilding?

The $236 million awarded to Huntington Ingalls Incorporated for LPD 17 Class Engineering Services between 2010 and 2016 represents a significant investment. However, to contextualize this value, it's essential to compare it against the total program cost for the LPD 17 class. The construction of each LPD 17 ship has cost well over $1 billion, with the total program cost for all ships in the class estimated to be in the tens of billions of dollars. Therefore, this $236 million contract, while substantial for engineering services, represents a portion of the overall lifecycle costs, likely focused on specific engineering support rather than new construction or major overhauls. It highlights the ongoing need for specialized technical expertise to maintain and operate these complex vessels throughout their service life.

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: N0002409R2203

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc

Address: 1000 ACCESS RD, PASCAGOULA, MS, 39567

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $288,965,171

Exercised Options: $283,475,363

Current Obligation: $236,099,646

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline