DoD's $47.5M Ship Repair Contract with Electric Boat Corporation Lacked Competition
Contract Overview
Contract Amount: $47,458,680 ($47.5M)
Contractor: Electric Boat Corporation
Awarding Agency: Department of Defense
Start Date: 2014-11-14
End Date: 2021-06-09
Contract Duration: 2,399 days
Daily Burn Rate: $19.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::CT::IGF SHIP'S FORCE MANNING SHIPPINGPORT (ARDM-4)
Place of Performance
Location: GROTON, NEW LONDON County, CONNECTICUT, 06340
Plain-Language Summary
Department of Defense obligated $47.5 million to ELECTRIC BOAT CORPORATION for work described as: IGF::CT::IGF SHIP'S FORCE MANNING SHIPPINGPORT (ARDM-4) Key points: 1. Significant spending on ship repair services. 2. Sole-source award to Electric Boat Corporation. 3. Long contract duration of nearly 2000 days. 4. Potential for cost overruns due to Cost Plus Fixed Fee structure.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, while common for complex projects, can incentivize contractors to increase costs to maximize profit. Without competitive bidding, it's difficult to ascertain if the $47.5M price reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and competition, potentially leading to higher costs for the government.
Taxpayer Impact: The lack of competition on this nearly $47.5 million contract means taxpayers may have paid more than necessary for these ship repair services.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. The long duration of the contract raises questions about efficient project management. Reliance on a single contractor for critical ship maintenance could pose a risk to naval readiness if issues arise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
- Lack of small business participation
Positive Signals
- Awarded to a known, established contractor
Sector Analysis
The Department of Defense, specifically the Navy, frequently contracts for ship building and repair. Spending in this sector can be substantial, and competitive procurement is crucial for ensuring value for money, especially given the specialized nature of naval vessel maintenance.
Small Business Impact
The data indicates no small business participation in this contract. For large, specialized contracts like ship repair, opportunities for small businesses are often limited, but a review of subcontracting potential is warranted.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the contractor is performing efficiently and that costs are reasonable. A review of the justification for the sole-source award is recommended.
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
- Long contract duration
- No small business participation
- Potential for cost overruns
Tags
ship-building-and-repairing, department-of-defense, ct, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $47.5 million to ELECTRIC BOAT CORPORATION. IGF::CT::IGF SHIP'S FORCE MANNING SHIPPINGPORT (ARDM-4)
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 $47.5 million.
What is the period of performance?
Start: 2014-11-14. End: 2021-06-09.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative procurement methods considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of adequate competition. Without specific details on the justification for this contract, it's difficult to assess if alternative methods were truly unavailable or if the sole-source path was chosen for convenience, potentially at a higher cost to taxpayers.
How does the Cost Plus Fixed Fee (CPFF) structure in this contract compare to industry benchmarks for similar ship repair services, and what mechanisms were in place to control costs?
CPFF contracts can lead to cost overruns if not closely monitored. Benchmarking against similar contracts is essential to determine if the fee and total costs were reasonable. The government should have implemented stringent cost controls, regular audits, and performance reviews to mitigate risks associated with this contract type.
What was the overall impact of this contract's long duration (nearly 2400 days) on the operational readiness and maintenance costs of the ARDM-4?
A lengthy contract duration can indicate a complex, multi-phase project or potential inefficiencies. It raises questions about whether the extended timeline was necessary and cost-effective. The government should analyze if the prolonged period led to increased overhead, potential obsolescence of parts, or delays impacting the vessel's availability for its intended mission.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002414R4305
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: $48,093,930
Exercised Options: $47,492,436
Current Obligation: $47,458,680
Actual Outlays: $7,925,985
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-11-14
Current End Date: 2021-06-09
Potential End Date: 2021-06-09 00:00:00
Last Modified: 2023-07-20
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