DoD's $184M Nuclear Maintenance Contract with Electric Boat Corporation Raises Concerns Over Competition

Contract Overview

Contract Amount: $184,117,510 ($184.1M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2013-03-21

End Date: 2018-04-11

Contract Duration: 1,847 days

Daily Burn Rate: $99.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NUCLEAR REGIONAL MAINTENANCE DEPARTMENT

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $184.1 million to ELECTRIC BOAT CORPORATION for work described as: NUCLEAR REGIONAL MAINTENANCE DEPARTMENT Key points: 1. The contract awarded to Electric Boat Corporation for nuclear regional maintenance is substantial at $184.1 million. 2. Lack of competition is a significant factor, with the contract being 'NOT COMPETED'. 3. The 'COST PLUS FIXED FEE' pricing structure can lead to cost overruns if not managed carefully. 4. The sector is Ship Building and Repairing, a critical but often complex area for government procurement.

Value Assessment

Rating: questionable

The 'COST PLUS FIXED FEE' (CPFF) contract type, while common for complex projects, offers less incentive for cost control compared to fixed-price contracts. Without competitive pressure, the government may not be achieving the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was 'NOT COMPETED', indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no market-based competition to drive down the price.

Taxpayer Impact: The absence of competition suggests taxpayers may be paying a premium for these nuclear maintenance services.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The long duration (2013-2018) of the contract raises questions about ongoing necessity and potential for future competition. Dependence on a single contractor for critical nuclear maintenance could pose a long-term strategic risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration
Sole-source award

Positive Signals

Critical maintenance services provided
Established contractor with relevant experience

Sector Analysis

The Ship Building and Repairing sector, particularly for nuclear components, requires specialized expertise. However, even in specialized fields, competitive sourcing strategies should be explored to ensure value for money.

Small Business Impact

The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to assess small business participation.

Oversight & Accountability

The 'NOT COMPETED' status suggests a potential gap in competitive sourcing oversight. Regular reviews of sole-source justifications and market research are crucial for ensuring accountability and cost-effectiveness.

Related Government Programs

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

Risk Flags

Lack of competition
Sole-source award
Cost-plus contract type
Potential for cost overruns
Limited price discovery

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $184.1 million to ELECTRIC BOAT CORPORATION. NUCLEAR REGIONAL MAINTENANCE DEPARTMENT

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 $184.1 million.

What is the period of performance?

Start: 2013-03-21. End: 2018-04-11.

What was the justification for not competing this contract, and has it been re-competed or justified since?

The justification for not competing this contract is not provided in the data. Typically, sole-source awards require extensive documentation proving that only one source can meet the requirement. Without this justification, it's difficult to assess the validity of the award. Re-competition or justification for extensions would be critical for ongoing oversight.

How does the 'COST PLUS FIXED FEE' structure compare to industry benchmarks for similar nuclear maintenance services?

Cost-Plus-Fixed-Fee (CPFF) contracts are common for R&D and complex services where cost estimation is difficult. However, they shift cost risk to the government. Benchmarking against similar contracts, especially those awarded competitively, is essential to determine if the fixed fee and overall costs are reasonable and reflect fair market value.

What is the long-term strategic risk of relying on a single contractor for critical nuclear maintenance, and are there plans to mitigate this?

Sole-sourcing critical infrastructure maintenance creates a dependency that can lead to price escalation and reduced service quality over time. It also limits the government's ability to leverage new technologies or approaches. Developing a long-term strategy that includes market research, potential for future competition, or developing alternative capabilities is vital for mitigating this risk.

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: N0002412R4306

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

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: $184,117,510

Exercised Options: $184,117,510

Current Obligation: $184,117,510

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline