DoD awards $215M non-nuclear submarine repair contract to Electric Boat Corp

Contract Overview

Contract Amount: $214,835,473 ($214.8M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2012-12-16

End Date: 2017-12-06

Contract Duration: 1,816 days

Daily Burn Rate: $118.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NON NUCLEAR SUBMARINE REPAIR&MAINTENANCE SERVICES CONTRACT

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $214.8 million to ELECTRIC BOAT CORPORATION for work described as: NON NUCLEAR SUBMARINE REPAIR&MAINTENANCE SERVICES CONTRACT Key points: 1. Contract awarded to a single, established provider for specialized submarine maintenance. 2. Significant value suggests critical, long-term support for naval assets. 3. Lack of competition raises questions about potential price overruns and innovation. 4. Sector focus on naval shipbuilding and repair highlights specialized industrial base needs.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a definitive value assessment difficult. Without benchmarks from competing bids, it's hard to determine if the $215M represents a fair price for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach limits price discovery and may prevent the government from benefiting from competitive market forces that could drive down costs or encourage innovative solutions.

Taxpayer Impact: The lack of competition for this substantial contract may result in higher costs for taxpayers than if multiple vendors had vied for the work.

Public Impact

Ensures continued operational readiness of critical naval assets. Supports a highly specialized industrial base and skilled workforce. Potential for cost savings through future competitive procurements in this niche. Impacts the strategic capabilities of the U.S. Navy's submarine fleet.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Ensures critical maintenance for naval assets
Supports specialized industry

Sector Analysis

This contract falls within the naval shipbuilding and repair sector, a highly specialized area requiring unique expertise and facilities. Spending in this sector is often characterized by long lead times, high R&D costs, and limited competition due to the complexity and criticality of the assets.

Small Business Impact

The data indicates this contract was not awarded to small businesses. The specialized nature of submarine repair typically requires large, established firms with significant infrastructure and security clearances, often excluding smaller entities.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets all requirements. Robust auditing and performance monitoring are crucial to mitigate risks associated with non-competitive contracts.

Related Government Programs

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

Risk Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited innovation incentives
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $214.8 million to ELECTRIC BOAT CORPORATION. NON NUCLEAR SUBMARINE REPAIR&MAINTENANCE SERVICES CONTRACT

Who is the contractor on this award?

The obligated recipient is ELECTRIC BOAT CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $214.8 million.

What is the period of performance?

Start: 2012-12-16. End: 2017-12-06.

What was the justification for awarding this contract sole-source, and were alternative competition strategies considered?

The justification for a sole-source award typically involves unique capabilities, critical national security needs, or the unavailability of other sources. Without specific documentation, it's difficult to ascertain the exact rationale. However, the specialized nature of non-nuclear submarine repair might necessitate a single provider due to proprietary technology, extensive training, or specific shipyard infrastructure required.

How does the cost-plus-fixed-fee structure impact the government's ability to control costs in this non-competitive environment?

The cost-plus-fixed-fee (CPFF) structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. In a non-competitive scenario, this can increase risk for the government, as the contractor has less incentive to control costs aggressively. The fixed fee, however, provides some predictability in contractor profit, but overall project cost can still escalate if direct costs are not managed effectively.

What are the long-term implications for naval readiness and technological advancement given the lack of competition for these repair services?

The long-term implications include potential stagnation in innovation and efficiency if the incumbent contractor faces no competitive pressure. While ensuring immediate readiness, a sustained lack of competition could lead to higher long-term maintenance costs and slower adoption of new repair technologies. Future competitive procurements, if feasible, would be crucial to reintroduce market dynamics.

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: N0002412R4307

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 75 EASTERN POINT RD, GROTON, CT, 06340

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: $217,065,897

Exercised Options: $217,065,897

Current Obligation: $214,835,473

Actual Outlays: $-80,270

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline