DoD's $410M Submarine Planning Contract Awarded to Huntington Ingalls Inc. Lacks Competition

Contract Overview

Contract Amount: $409,837,509 ($409.8M)

Contractor: Huntington Ingalls Inc

Awarding Agency: Department of Defense

Start Date: 2015-07-17

End Date: 2020-06-30

Contract Duration: 1,810 days

Daily Burn Rate: $226.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SUBMARINE PLANNING YARD

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $409.8 million to HUNTINGTON INGALLS INC for work described as: SUBMARINE PLANNING YARD Key points: 1. Significant contract value of over $409 million for submarine planning. 2. Sole-source award to Huntington Ingalls Inc. indicates limited competition. 3. Potential risk associated with lack of competitive bidding impacting price. 4. Spending falls within the Ship Building and Repairing sector.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, raises concerns about cost control and potential overspending. Benchmarking is difficult without comparable contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Huntington Ingalls Inc. The absence of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: Taxpayer funds are committed without the benefit of competitive pricing, potentially resulting in a less efficient use of resources.

Public Impact

Impacts national defense capabilities through specialized submarine planning. Affects the shipbuilding industry and its supply chain. Raises questions about the procurement process for critical defense assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Essential for national security
Experienced contractor

Sector Analysis

This contract falls under the Ship Building and Repairing sector, which is critical for national defense. Spending in this sector can be highly variable due to the specialized nature and long lead times of major projects.

Small Business Impact

No information is provided regarding small business participation in this contract. Sole-source awards often limit opportunities for small businesses to compete for prime contracts.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and effective use of funds. Oversight should focus on the contractor's performance and cost management.

Related Government Programs

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

Risk Flags

Sole-source award
Cost-plus contract type
Lack of transparency in pricing
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $409.8 million to HUNTINGTON INGALLS INC. SUBMARINE PLANNING YARD

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $409.8 million.

What is the period of performance?

Start: 2015-07-17. End: 2020-06-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities or circumstances where only one contractor can meet the requirement. Without specific details, it's difficult to assess the fairness of pricing. However, cost-plus-fixed-fee contracts inherently carry a risk of cost overruns if not rigorously monitored.

What are the potential risks to national security if this submarine planning capability is not competitively sourced in the future?

Future sole-source awards could lead to complacency and reduced innovation from the incumbent contractor. It also limits the government's ability to leverage competitive pressures to drive down costs and improve technological advancements, potentially impacting long-term strategic capabilities.

How does the cost-plus-fixed-fee structure impact the government's ability to control spending on this long-term project?

The cost-plus-fixed-fee structure allows the contractor to recover all allowable costs plus a predetermined fee. While the fee is fixed, the overall cost can escalate if the contractor's costs increase. This necessitates robust government oversight to scrutinize costs and ensure efficiency.

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: N0002414R2105

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc

Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $564,023,324

Exercised Options: $534,808,924

Current Obligation: $409,837,509

Actual Outlays: $298,449

Subaward Activity

Number of Subawards: 149

Total Subaward Amount: $8,328,104

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline