Navy Awards $64M for Ship Building and Repair to National Steel and Shipbuilding Company

Contract Overview

Contract Amount: $64,050,210 ($64.1M)

Contractor: National Steel and Shipbuilding Company

Awarding Agency: Department of Defense

Start Date: 2011-10-07

End Date: 2015-12-28

Contract Duration: 1,543 days

Daily Burn Rate: $41.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: LPD 22 FOA/PSA, LPD 23 FOA/PSA AND LPD 25 FOA/PSA AND EMERGENT WORK

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92113

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $64.1 million to NATIONAL STEEL AND SHIPBUILDING COMPANY for work described as: LPD 22 FOA/PSA, LPD 23 FOA/PSA AND LPD 25 FOA/PSA AND EMERGENT WORK Key points: 1. The contract value of $64.05 million is for ship building and repair services. 2. National Steel and Shipbuilding Company secured this contract through full and open competition. 3. The contract was awarded by the Department of the Navy, highlighting a significant investment in naval capabilities. 4. The primary sector for this spending is Ship Building and Repair, crucial for national defense infrastructure.

Value Assessment

Rating: fair

The contract type is Cost Plus Award Fee, which can lead to costs exceeding initial estimates if not managed carefully. Benchmarking against similar contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a robust price discovery process. However, the Cost Plus Award Fee structure introduces potential for cost overruns.

Taxpayer Impact: Taxpayer funds are being used for critical naval infrastructure, with the competitive award aiming for value, though the fee structure warrants monitoring.

Public Impact

Supports naval readiness and national security through shipbuilding and repair. Invests in a key industrial sector, potentially creating or sustaining jobs in California. The award contributes to the modernization and maintenance of the U.S. Navy's fleet.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee structure can lead to unpredictable final costs.
Lack of specific performance metrics makes assessing award fee justification challenging.
Contract duration and emergent work could increase the total expenditure beyond the initial award amount.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Supports a critical defense sector, aligning with national security objectives.
Contract awarded to a single entity, potentially streamlining project execution.

Sector Analysis

This contract falls within the Ship Building and Repair sector, which is a significant part of the defense industrial base. Spending benchmarks for similar naval vessel construction and repair can vary widely based on vessel type and complexity.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). Further analysis would be needed to determine if subcontracting opportunities for small businesses were included or pursued.

Oversight & Accountability

The Department of the Navy is responsible for oversight. The Cost Plus Award Fee structure necessitates diligent monitoring of costs and performance to ensure value for taxpayer money.

Related Government Programs

Ship Building and Repairing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Award Fee structure
Potential for emergent work increasing total cost
Lack of small business participation noted
Contract duration of over 4 years
Limited insight into specific performance metrics for award fee

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.1 million to NATIONAL STEEL AND SHIPBUILDING COMPANY. LPD 22 FOA/PSA, LPD 23 FOA/PSA AND LPD 25 FOA/PSA AND EMERGENT WORK

Who is the contractor on this award?

The obligated recipient is NATIONAL STEEL AND SHIPBUILDING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $64.1 million.

What is the period of performance?

Start: 2011-10-07. End: 2015-12-28.

What specific performance metrics were used to determine the award fee, and how were they aligned with the contract's objectives?

The specific performance metrics for the award fee are not detailed in the provided data. Typically, for Cost Plus Award Fee contracts, metrics relate to schedule adherence, cost control, technical performance, and quality. The Navy would have established these criteria to incentivize the contractor to meet or exceed expectations in these areas, ensuring the successful completion of shipbuilding and repair tasks while managing costs effectively.

How does the Cost Plus Award Fee structure compare to other contract types in terms of cost efficiency for this type of naval shipbuilding and repair work?

Cost Plus Award Fee contracts offer flexibility for complex projects where scope may evolve, like shipbuilding and repair. While they allow for cost reimbursement plus a fee based on performance, they can be less cost-efficient than fixed-price contracts if not managed rigorously. The potential for cost overruns is higher, but the award incentive can drive better performance, making it a trade-off between cost certainty and flexibility/performance.

What is the projected taxpayer impact considering the potential for emergent work and the contract's fee structure over its full duration?

The initial award is $64.05 million, but the Cost Plus Award Fee structure and potential for emergent work introduce uncertainty. Taxpayer impact depends heavily on the contractor's performance in managing costs and meeting award criteria. Without detailed projections for emergent work and performance against award fee targets, the final taxpayer cost could exceed the initial estimate, necessitating close oversight.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002411R2400

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 2798 HARBOR DR, SAN DIEGO, CA, 92113

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: $137,939,012

Exercised Options: $135,205,235

Current Obligation: $64,050,210

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $45,318

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline