Navy Awards $158.7M Ship Building Contract to Bath Iron Works
Contract Overview
Contract Amount: $158,746,716 ($158.7M)
Contractor: Bath Iron Works Corporation
Awarding Agency: Department of Defense
Start Date: 2014-08-22
End Date: 2019-09-30
Contract Duration: 1,865 days
Daily Burn Rate: $85.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: IGF::CT::IGF LCS PLANNING YARD BASE YEAR
Place of Performance
Location: BATH, SAGADAHOC County, MAINE, 04530
State: Maine Government Spending
Plain-Language Summary
Department of Defense obligated $158.7 million to BATH IRON WORKS CORPORATION for work described as: IGF::CT::IGF LCS PLANNING YARD BASE YEAR Key points: 1. Significant contract awarded to a single, established defense contractor. 2. High value suggests complex shipbuilding requirements. 3. Potential for cost overruns in Cost Plus Award Fee contracts. 4. Sector focus on shipbuilding and repair, a critical defense capability.
Value Assessment
Rating: fair
The Cost Plus Award Fee structure allows for contractor incentives but can lead to higher final costs compared to fixed-price contracts. Benchmarking against similar complex shipbuilding contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific pricing outcomes and how they were influenced by the competition are not detailed.
Taxpayer Impact: Taxpayer funds are being used for a critical defense procurement. The effectiveness of the competition in securing the best value for taxpayers requires further scrutiny.
Public Impact
Supports national defense capabilities through shipbuilding. Impacts the regional economy in Maine through job creation and related industries. Ensures the maintenance and modernization of naval assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contract type can lead to cost uncertainty.
- Lack of detailed cost breakdown makes value assessment difficult.
- Long contract duration increases exposure to economic fluctuations.
Positive Signals
- Awarded under full and open competition.
- Supports critical defense infrastructure.
- Contractor is an established entity in the shipbuilding sector.
Sector Analysis
The shipbuilding and repair sector is characterized by high capital investment, specialized labor, and long production cycles. Defense spending is a major driver, with contracts often being large and complex.
Small Business Impact
This contract appears to be awarded to a large corporation, with no indication of small business participation in the provided data. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses.
Oversight & Accountability
Oversight would typically involve contract performance monitoring by the Department of the Navy to ensure Bath Iron Works meets delivery schedules and quality standards. Award fees are contingent on performance metrics.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for cost overruns due to CPAF structure.
- Lack of detailed cost breakdown hinders value assessment.
- Long contract duration increases exposure to market volatility.
- Dependence on a single large contractor for critical defense assets.
Tags
ship-building-and-repairing, department-of-defense, me, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $158.7 million to BATH IRON WORKS CORPORATION. IGF::CT::IGF LCS PLANNING YARD BASE YEAR
Who is the contractor on this award?
The obligated recipient is BATH IRON WORKS 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 $158.7 million.
What is the period of performance?
Start: 2014-08-22. End: 2019-09-30.
What specific performance metrics are tied to the award fee structure, and how do they ensure value for money?
The award fee structure is designed to incentivize contractor performance beyond minimum requirements. Specific metrics often relate to schedule adherence, quality of work, cost control, and technical innovation. Detailed performance reports and evaluations by the contracting officer determine the awarded fee, aiming to align contractor profit with successful project outcomes and taxpayer value.
How does the Cost Plus Award Fee structure compare to other contract types in terms of risk and cost predictability for this type of project?
Cost Plus Award Fee (CPAF) contracts share risks between the government and contractor. The government covers allowable costs plus a fee that can be adjusted based on performance. This contrasts with fixed-price contracts where the contractor bears more risk for cost overruns. CPAF offers flexibility for complex projects where costs are uncertain but can lead to higher final prices if performance incentives are not tightly managed.
What is the historical performance of Bath Iron Works on similar large-scale shipbuilding contracts, particularly regarding cost and schedule adherence?
Bath Iron Works has a long history in naval shipbuilding, often undertaking complex and high-value contracts. Historical performance data would need to be reviewed to assess their track record on cost and schedule for similar projects. Factors like contract type, specific ship class, and evolving requirements can influence outcomes, making direct comparisons crucial for evaluating current contract effectiveness.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002413R4304
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: General Dynamics Corp
Address: 700 WASHINGTON ST, BATH, ME, 04530
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: $199,936,853
Exercised Options: $197,302,384
Current Obligation: $158,746,716
Actual Outlays: $-33,566
Subaward Activity
Number of Subawards: 78
Total Subaward Amount: $75,534,181
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-08-22
Current End Date: 2019-09-30
Potential End Date: 2020-02-28 00:00:00
Last Modified: 2023-05-18
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