Navy's $945M USS Enterprise Inactivation Contract Awarded to Huntington Ingalls
Contract Overview
Contract Amount: $945,341,283 ($945.3M)
Contractor: Huntington Ingalls Inc
Awarding Agency: Department of Defense
Start Date: 2013-06-20
End Date: 2026-03-31
Contract Duration: 4,667 days
Daily Burn Rate: $202.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: USS ENTERPRISE (CVN 65) INACT ACCOMPLISH
Place of Performance
Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $945.3 million to HUNTINGTON INGALLS INC for work described as: USS ENTERPRISE (CVN 65) INACT ACCOMPLISH Key points: 1. Significant contract value for ship inactivation services. 2. Sole-source award raises questions about competition and price discovery. 3. Long contract duration suggests complex inactivation process. 4. Focus on shipbuilding and repair sector, a critical defense area.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure allows for potential cost overruns. Benchmarking against similar large-scale naval vessel inactivation contracts is difficult due to the unique nature of aircraft carriers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to reduce the bid.
Taxpayer Impact: The lack of competition in awarding this significant contract may result in taxpayers paying more than necessary for the inactivation services.
Public Impact
Taxpayers may be overpaying due to the sole-source nature of the contract. The long duration of the contract raises concerns about efficient project management and potential delays. The inactivation of a major naval asset like the USS Enterprise is a complex undertaking with significant logistical and environmental considerations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of small business participation
Positive Signals
- Critical national defense asset maintenance
- Experienced contractor in shipbuilding and repair
Sector Analysis
This contract falls within the shipbuilding and repair sector, which is a vital component of national defense. Spending in this area is typically high and driven by government procurement needs, often involving specialized contractors.
Small Business Impact
The data indicates that small businesses were not involved in this contract (sb: false). This is common for large, specialized defense contracts where prime contractors are large corporations with extensive capabilities.
Oversight & Accountability
The Department of the Navy is responsible for overseeing this contract. Given the sole-source nature and cost-plus structure, robust oversight is crucial to ensure cost control and adherence to inactivation standards.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type can lead to cost overruns.
- Long contract duration increases risk of delays and cost escalation.
- Lack of small business participation.
- Potential for inadequate price discovery.
Tags
ship-building-and-repairing, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $945.3 million to HUNTINGTON INGALLS INC. USS ENTERPRISE (CVN 65) INACT ACCOMPLISH
Who is the contractor on this award?
The obligated recipient is HUNTINGTON INGALLS 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 $945.3 million.
What is the period of performance?
Start: 2013-06-20. End: 2026-03-31.
What was the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically stems from a lack of available competition or unique capabilities required. For this contract, the Navy likely cited Huntington Ingalls' specific expertise and facilities for inactivating a nuclear-powered aircraft carrier. However, without competition, ensuring fair and reasonable pricing relies heavily on the government's negotiation skills and independent cost estimations.
What are the potential risks associated with the 'Cost Plus Incentive Fee' contract type for this large-scale inactivation project?
Cost Plus Incentive Fee (CPIF) contracts can incentivize the contractor to control costs by sharing savings if they come in under target. However, they also carry risks. If the target cost is set too high, or if the incentive structure is not well-designed, the government might still end up paying significantly more than anticipated. There's also a risk of disputes over allowable costs.
How will the effectiveness of the inactivation process be measured, and what are the key performance indicators for this contract?
Effectiveness will likely be measured against specific milestones and deliverables outlined in the contract, such as the safe removal of hazardous materials, defueling of nuclear components, and structural preservation. Key performance indicators (KPIs) would probably include adherence to schedule, meeting safety and environmental regulations, and achieving the agreed-upon inactivation standards for the vessel. The incentive fee structure would tie contractor compensation to meeting these KPIs.
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: N0002412R2112
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Huntington Ingalls Industries, Inc
Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $987,778,123
Exercised Options: $987,778,123
Current Obligation: $945,341,283
Subaward Activity
Number of Subawards: 178
Total Subaward Amount: $60,849,147
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-06-20
Current End Date: 2026-03-31
Potential End Date: 2026-03-31 00:00:00
Last Modified: 2025-11-13
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