DoD's $36.9M contract for special studies and reviews awarded to Huntington Ingalls Inc. shows limited competition

Contract Overview

Contract Amount: $36,902,680 ($36.9M)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2012-11-16

End Date: 2016-05-31

Contract Duration: 1,292 days

Daily Burn Rate: $28.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SPECIAL STUDIES, ANALYSES AND REVIEWS

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39567

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to HUNTINGTON INGALLS INCORPORATED for work described as: SPECIAL STUDIES, ANALYSES AND REVIEWS Key points: 1. The contract value of $36.9 million for special studies and reviews represents a significant investment in analytical support. 2. Awarded to a single entity, this contract raises questions about the extent of market engagement and potential for cost efficiencies. 3. The duration of the contract (1292 days) suggests a long-term need for these specialized services. 4. The 'Ship Building and Repairing' NAICS code, while specific, may not fully encompass the scope of 'Special Studies, Analyses and Reviews'. 5. The cost-plus-fixed-fee contract type indicates that costs are reimbursed, plus a fixed fee, which can incentivize cost control but also carries inherent risks. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the 'special studies, analyses and reviews' performed. However, a $36.9 million award for analytical services over nearly four years suggests a substantial investment. The cost-plus-fixed-fee structure, while common for complex or uncertain work, can lead to higher overall costs compared to fixed-price contracts if not managed diligently. Without comparable contract data for similar specialized studies, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach is typically used when a unique capability or urgent need exists that cannot be met by other sources. The lack of competition means that the government did not benefit from a competitive bidding process, which could have potentially led to lower prices or more innovative solutions from multiple offerors.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible pricing and terms for taxpayers. This can result in higher costs than if multiple vendors had competed for the contract.

Public Impact

The primary beneficiary is the Department of the Navy, which receives specialized analytical support to inform its decision-making processes. The services delivered likely involve in-depth research, data analysis, and strategic recommendations related to shipbuilding and repair, or broader defense initiatives. The geographic impact is primarily within the Department of Defense, with potential implications for naval operations and strategic planning. Workforce implications may include the employment of highly skilled analysts, researchers, and subject matter experts within Huntington Ingalls Incorporated.

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 cost overruns if not carefully managed.
NAICS code mismatch may indicate a broader scope than initially apparent, requiring further clarification.
Lack of transparency in the specific nature of 'special studies' makes performance evaluation difficult.

Positive Signals

Award to an established contractor like Huntington Ingalls Incorporated suggests a level of trust and proven capability.
Long contract duration indicates a sustained need and potential for deep expertise development.
The contract supports critical analytical functions within the Department of Defense.

Sector Analysis

The defense sector, particularly shipbuilding and repair, is characterized by high-value, complex contracts often awarded to a limited number of large, specialized firms. This contract falls under the broader category of professional services and research, which are essential for strategic planning and operational effectiveness within the Department of Defense. Comparable spending benchmarks for specialized analytical services within defense can vary widely depending on the scope and duration, but multi-million dollar contracts are common for in-depth studies.

Small Business Impact

There is no indication that this contract included a small business set-aside. The sole-source nature of the award further suggests that opportunities for small businesses to participate as prime contractors were not pursued. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data. This contract does not appear to directly contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the performance metrics defined within the contract and the fixed fee structure. Transparency regarding the specific studies conducted and their findings may be limited due to the nature of defense-related analyses. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Contracts
Naval Ship Systems Engineering Support
Defense Analysis and Consulting Services
Shipbuilding and Repair Services

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns
Lack of competitive pricing pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to HUNTINGTON INGALLS INCORPORATED. SPECIAL STUDIES, ANALYSES AND REVIEWS

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 $36.9 million.

What is the period of performance?

Start: 2012-11-16. End: 2016-05-31.

What specific types of 'special studies, analyses and reviews' were conducted under this contract, and how did they inform Department of the Navy decisions?

The provided data does not specify the exact nature of the 'special studies, analyses and reviews'. However, given the contractor's primary business in shipbuilding and repair and the awarding agency (Department of the Navy), these studies likely pertained to optimizing naval vessel design, maintenance strategies, lifecycle cost analysis, operational efficiency, or strategic planning for fleet modernization. The impact on Navy decisions would depend on the findings and recommendations, which are not publicly detailed. These studies are crucial for informed resource allocation and strategic direction within the Navy's complex operational environment.

How does the cost-plus-fixed-fee (CPFF) contract type compare to other potential contract types for similar services in terms of cost efficiency for the government?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used when the scope of work is not clearly defined or involves a high degree of uncertainty, making it difficult to estimate costs accurately upfront. While it allows for flexibility and ensures contractor engagement, it can be less cost-efficient for the government compared to fixed-price contracts. With CPFF, the contractor is reimbursed for allowable costs plus a predetermined fixed fee, which represents their profit. This structure can incentivize contractors to incur costs, as their fee remains constant regardless of the total cost. Effective oversight and robust cost controls are essential to mitigate potential cost overruns and ensure value for money under a CPFF arrangement.

What is the rationale behind awarding this contract on a sole-source basis, and were any efforts made to explore competitive options?

Sole-source awards are typically justified when only one responsible source is capable of providing the required service or supply. Reasons can include unique capabilities, proprietary technology, urgent and compelling needs, or situations where competition is not feasible or cost-effective. The data indicates this contract was 'NOT COMPETED,' suggesting the Department of the Navy determined that Huntington Ingalls Incorporated was the only viable option at the time of award. Without further documentation, the specific rationale remains undisclosed, but it implies a lack of readily available alternatives or a critical dependency on the contractor's specific expertise or infrastructure.

What is the historical spending pattern for 'Special Studies, Analyses and Reviews' by the Department of the Navy, and how does this contract fit within that trend?

Historical spending on 'Special Studies, Analyses and Reviews' by the Department of the Navy can fluctuate significantly year-to-year, influenced by evolving strategic priorities, technological advancements, and budget allocations. A $36.9 million contract for such services over approximately 3.5 years represents a substantial, but not necessarily anomalous, investment for a major defense agency. Without access to detailed historical spending data for this specific category, it's difficult to definitively place this contract within a trend. However, such contracts are generally indicative of the Navy's commitment to data-driven decision-making and strategic foresight, requiring specialized expertise that may not always be available internally.

What are the potential risks associated with a sole-source, cost-plus-fixed-fee contract for specialized analytical services, and what mitigation strategies might be in place?

The primary risks associated with a sole-source, CPFF contract include potential for inflated costs due to lack of competition, contractor incentive to increase costs to maximize profit (though the fixed fee mitigates this to some extent compared to cost-plus-incentive-fee), and potential for scope creep. Mitigation strategies typically involve rigorous contract oversight, detailed performance metrics, regular audits of costs, and clear definition of deliverables and milestones. The government contracting officer plays a critical role in managing the contractor's performance and ensuring adherence to the contract terms. Independent cost estimates and benchmarking, where possible, can also help manage risks.

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: N0002412R2404

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc (UEI: 967362331)

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: $40,933,282

Exercised Options: $40,933,282

Current Obligation: $36,902,680

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $383,669

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline