Navy awards $105M contract to Swiftships for shipbuilding, with a 2,682-day duration

Contract Overview

Contract Amount: $105,257,836 ($105.3M)

Contractor: Swiftships Shipbuilders, L.L.C.

Awarding Agency: Department of Defense

Start Date: 2014-09-22

End Date: 2022-01-25

Contract Duration: 2,682 days

Daily Burn Rate: $39.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UNDEFINITIZED CONTRACTING ACTION

Place of Performance

Location: MORGAN CITY, SAINT MARY County, LOUISIANA, 70380

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $105.3 million to SWIFTSHIPS SHIPBUILDERS, L.L.C. for work described as: UNDEFINITIZED CONTRACTING ACTION Key points: 1. Contract awarded for shipbuilding and repair services. 2. The contract spans over 7 years, indicating a long-term need. 3. The firm fixed-price structure aims to control costs. 4. The contractor, Swiftships, is based in Louisiana. 5. This award represents a significant investment in naval capabilities. 6. The contract's duration suggests a complex or extensive project.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables. However, a nearly 7-year duration for a $105 million shipbuilding contract suggests a potentially reasonable, though not exceptionally low, annual expenditure. The firm fixed-price type indicates an attempt to lock in costs, but the lack of detailed performance metrics makes a definitive value assessment difficult. Comparing it to similar long-term naval shipbuilding contracts would be necessary for a more precise evaluation of its value-for-money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the Navy did not benefit from potential price reductions or innovative solutions that might have emerged from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a higher price than in a competitive scenario, and the opportunity to foster broader industry participation was missed.

Public Impact

The primary beneficiary is the Department of the Navy, which will receive shipbuilding and repair services. The contract supports the maintenance and potentially the expansion of the U.S. naval fleet. The geographic impact is centered in Louisiana, where Swiftships is located, potentially creating or sustaining jobs in that region. The contract implies a need for skilled labor in shipbuilding and repair, impacting the maritime workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and innovation.
Long contract duration (2,682 days) may present risks if requirements change or performance issues arise.
Lack of detailed performance metrics makes value assessment difficult.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Contract supports critical naval shipbuilding and repair needs.
Contractor is based in the US, supporting domestic industry.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval readiness and national security. This contract falls under the North American Industry Classification System (NAICS) code 336611 for Ship Building and Repairing. The market is characterized by high barriers to entry, significant capital investment, and specialized labor requirements. The Navy is a major customer in this sector, with spending often concentrated among a few large shipbuilders and specialized repair facilities.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate directly or indirectly through subcontracting, potentially concentrating the economic benefits with the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Given the long duration, regular performance reviews and financial audits would be expected. The firm fixed-price nature implies that the contractor bears more risk for cost overruns, but oversight would still be needed to ensure adherence to specifications and quality standards. Transparency regarding the justification for the sole-source award and the specific deliverables would be key areas for public scrutiny.

Related Government Programs

Naval shipbuilding programs
Ship repair and maintenance contracts
Defense procurement
Maritime industry support

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.3 million to SWIFTSHIPS SHIPBUILDERS, L.L.C.. UNDEFINITIZED CONTRACTING ACTION

Who is the contractor on this award?

The obligated recipient is SWIFTSHIPS SHIPBUILDERS, L.L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $105.3 million.

What is the period of performance?

Start: 2014-09-22. End: 2022-01-25.

What specific shipbuilding or repair services are covered under this $105 million contract?

The provided data indicates the contract is for 'Ship Building and Repairing' under NAICS code 336611. However, the specific details of the services, such as the type of vessels, the scope of repairs, or the exact nature of the shipbuilding work, are not detailed in the provided data. This level of specificity is crucial for understanding the contract's true value and purpose. Without this information, it's difficult to assess if the $105 million over 2,682 days represents a fair price for the expected outcomes or if it aligns with the Navy's strategic shipbuilding goals.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract type as 'NOT AVAILABLE FOR COMPETITION,' which typically signifies a sole-source award. The justification for such an award usually stems from unique capabilities, proprietary technology, urgent and compelling needs where only one source can reasonably fulfill the requirement, or specific government-mandated reasons. Without further documentation from the Department of the Navy, the precise rationale for awarding this $105 million shipbuilding contract solely to Swiftships, L.L.C. remains undisclosed. This lack of competition limits the government's ability to leverage market forces for potentially better pricing and innovation.

How does the $105 million contract value compare to similar shipbuilding contracts awarded by the Navy?

Direct comparison of the $105 million value is difficult without knowing the specific scope of work. However, the contract's duration of 2,682 days (approximately 7.3 years) suggests a long-term, potentially complex project. For context, major naval shipbuilding programs, such as aircraft carriers or submarines, involve billions of dollars over many years. Smaller vessels or extensive refits might fall within the tens to hundreds of millions. This $105 million award for a multi-year period could represent the construction of a specialized vessel, a significant mid-life upgrade, or a series of smaller shipbuilding efforts. Benchmarking would require identifying contracts with similar vessel types, ages, and modernization requirements.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

Sole-source contracts, especially those spanning over seven years and valued at $105 million, carry inherent risks. Firstly, the absence of competition can lead to inflated pricing, as the contractor faces less pressure to offer the most cost-effective solution. Secondly, the long duration increases the risk of scope creep, requirement changes, or unforeseen technical challenges that may not have been adequately addressed in the initial sole-source justification. Performance monitoring becomes critical to ensure the contractor meets quality standards and delivery timelines. Finally, there's a risk of contractor dependency; the Navy might become reliant on Swiftships, potentially limiting future flexibility in sourcing similar services.

What is Swiftships, L.L.C.'s track record in fulfilling large government shipbuilding contracts?

The provided data identifies Swiftships, L.L.C. as the contractor based in Louisiana. However, it does not offer details on their past performance, specific contract history, or track record in fulfilling large government shipbuilding contracts. To assess their reliability and capability for this $105 million award, a review of their past performance evaluations, any previous government contracts (especially with the Department of Defense or Navy), and their history of meeting deadlines and quality standards would be necessary. Without this information, it's challenging to gauge their experience level and suitability for such a significant undertaking.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002414R5360

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1105 LEVEE RD, MORGAN CITY, LA, 70380

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $105,257,836

Exercised Options: $105,257,836

Current Obligation: $105,257,836

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline