DoD Awards $147M Engineering Services Contract to Electric Boat Corp. for Yard Services

Contract Overview

Contract Amount: $1,468,509,369 ($1.5B)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2016-08-26

End Date: 2026-11-30

Contract Duration: 3,748 days

Daily Burn Rate: $391.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF VCS LEAD YARD SERVICES

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $1.47 billion to ELECTRIC BOAT CORPORATION for work described as: IGF::OT::IGF VCS LEAD YARD SERVICES Key points: 1. Significant contract value of $146.8M awarded to Electric Boat Corporation. 2. Contract is for Engineering Services (NAICS 541330) supporting the Department of the Navy. 3. The contract was awarded on a NOT COMPETED basis, raising potential competition concerns. 4. Long contract duration of 3748 days (over 10 years) suggests a long-term need.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed tightly. The awarded amount is substantial, and without competitive bidding, it's difficult to assess if the price is fair and reasonable compared to market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a 'NOT COMPETED' basis, indicating a sole-source or limited competition procurement. This method bypasses the standard competitive process, potentially limiting price discovery and leading to higher costs for taxpayers.

Taxpayer Impact: The lack of competition for a contract of this magnitude raises concerns about potential overspending and inefficient use of taxpayer funds.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term nature of the contract could lock the government into a potentially suboptimal pricing structure. Lack of transparency in the procurement process hinders public understanding of the value received.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

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

Positive Signals

Supports critical Navy operations
Long-term planning and stability for contractor

Sector Analysis

This contract falls under Engineering Services, a sector often characterized by specialized expertise. While specific benchmarks for yard services are hard to pinpoint, large, long-term sole-source engineering contracts warrant scrutiny for cost-effectiveness.

Small Business Impact

The contract does not indicate any specific set-asides for small businesses. Given the sole-source nature and the large prime contractor, opportunities for small business subcontracting may be limited or not explicitly mandated.

Oversight & Accountability

The 'NOT COMPETED' status suggests that standard competitive oversight may have been bypassed. Further review would be needed to understand the justification for this approach and ensure appropriate oversight was applied to contract performance and cost control.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award lacks competition
Cost-plus contract type risks overruns
Long duration may not reflect current market value
Potential for reduced price discovery
Limited transparency on justification for non-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.47 billion to ELECTRIC BOAT CORPORATION. IGF::OT::IGF VCS LEAD YARD SERVICES

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 $1.47 billion.

What is the period of performance?

Start: 2016-08-26. End: 2026-11-30.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of other responsible sources. Without access to the contract file, it's impossible to determine the specific rationale. However, the absence of competition for a contract of this size suggests a potential missed opportunity to leverage market forces for better pricing and innovation.

How is the 'fixed fee' component of this Cost Plus Fixed Fee (CPFF) contract determined, and does it adequately incentivize cost control by Electric Boat Corporation?

In a CPFF contract, the fixed fee is negotiated at the outset and represents the contractor's profit. It is intended to remain constant regardless of the final cost. However, the effectiveness of this incentive depends heavily on the initial negotiation and the government's ability to monitor costs and performance. Without detailed contract terms, it's difficult to assess the adequacy of the fee structure.

What performance metrics and reporting requirements are in place to ensure the effectiveness and efficiency of the yard services provided under this long-term contract?

Effective oversight of long-term service contracts requires robust performance metrics and regular reporting. Key performance indicators (KPIs) should track service delivery, quality, timeliness, and cost efficiency. The government must actively monitor these metrics and hold the contractor accountable for meeting or exceeding them to ensure the contract delivers value and meets its objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002414R2119

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 75 EASTERN POINT RD, GROTON, CT, 06340

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

Financial Breakdown

Contract Ceiling: $1,572,251,644

Exercised Options: $1,572,251,644

Current Obligation: $1,468,509,369

Subaward Activity

Number of Subawards: 772

Total Subaward Amount: $285,279,584

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline