DoD awards $66.1M contract for LHA 7 ship planning services to Huntington Ingalls Inc

Contract Overview

Contract Amount: $66,104,496 ($66.1M)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2017-04-14

End Date: 2022-06-30

Contract Duration: 1,903 days

Daily Burn Rate: $34.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF THIS PROCUREMENT IS FOR POST DELIVERY PLANNING YARD SERVICES IN SUPPORT OF THE LHA 7 AMPHIBIOUS ASSAULT SHIP. THE SERVICES INCLUDE: POST-DELIVERY PLANNING, MATERIAL PROCUREMENT AND SUPPORT SERVICES FOR INDUSTRIAL POST DELIVERY AVAILABILITY (IPDA), POST DELIVERY AVAILABILITY (PDA), FITTING-OUT AVAILABILITY (FOA), POST SHAKEDOWN AVAILABILITY (PSA), AND EMERGENT WORK.

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39567

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $66.1 million to HUNTINGTON INGALLS INCORPORATED for work described as: IGF::OT::IGF THIS PROCUREMENT IS FOR POST DELIVERY PLANNING YARD SERVICES IN SUPPORT OF THE LHA 7 AMPHIBIOUS ASSAULT SHIP. THE SERVICES INCLUDE: POST-DELIVERY PLANNING, MATERIAL PROCUREMENT AND SUPPORT SERVICES FOR INDUSTRIAL POST DELIVERY AVAILABILITY (IPDA), POST DELIVERY AVAI… Key points: 1. Contract awarded to a single, large business prime contractor. 2. Services are critical for post-delivery planning and availability of a major amphibious assault ship. 3. The contract type is Cost Plus Fixed Fee, which can carry higher cost risk. 4. The procurement was not competed, raising questions about price discovery and value.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type, while allowing flexibility for emergent work, can lead to higher costs compared to fixed-price contracts. Benchmarking against similar complex ship availability services is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down prices.

Taxpayer Impact: The lack of competition for a significant contract value may result in suboptimal pricing and reduced value for taxpayer funds.

Public Impact

Ensures the operational readiness of a key naval asset (LHA 7). Supports the shipbuilding and repair industry, though primarily benefiting a large prime. Potential for cost overruns due to the CPFF contract type and lack of competition. Impacts the Navy's ability to efficiently manage ship maintenance and upgrades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type carries inherent cost escalation risk.
Lack of small business participation noted.

Positive Signals

Contract supports a critical national defense asset.
Long-term planning services ensure ship availability.
Experienced prime contractor likely possesses necessary expertise.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to naval shipbuilding and maintenance. Spending benchmarks for such specialized, large-scale post-delivery services are highly variable and dependent on ship class and scope of work.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss=false, sb=false). There is no indication of subcontracting opportunities for small businesses within this data, suggesting a missed opportunity for their participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and efficient execution. The Department of the Navy's contracting activity should monitor costs closely given the CPFF structure.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition may lead to inflated costs.
CPFF contract type increases risk of cost overruns.
No small business participation identified.
Potential for scope creep without strict oversight.
Long contract duration (1903 days) increases exposure to market fluctuations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.1 million to HUNTINGTON INGALLS INCORPORATED. IGF::OT::IGF THIS PROCUREMENT IS FOR POST DELIVERY PLANNING YARD SERVICES IN SUPPORT OF THE LHA 7 AMPHIBIOUS ASSAULT SHIP. THE SERVICES INCLUDE: POST-DELIVERY PLANNING, MATERIAL PROCUREMENT AND SUPPORT SERVICES FOR INDUSTRIAL POST DELIVERY AVAILABILITY (IPDA), POST DELIVERY AVAILABILITY (PDA), FITTING-OUT AVAILABILITY (FOA), POST SHAKEDOWN AVAILABILITY (PSA), AND EMERGENT WORK.

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $66.1 million.

What is the period of performance?

Start: 2017-04-14. End: 2022-06-30.

What was the justification for not competing this significant contract, and what steps were taken to ensure a fair and reasonable price was negotiated?

The justification for a sole-source award typically involves factors like unique capabilities, urgent needs, or lack of viable alternatives. Without specific details on the justification, it's difficult to assess the price reasonableness. Robust negotiation and independent cost analysis by the government are crucial in such cases to mitigate the risks associated with non-competitive procurements and ensure taxpayer value.

What are the projected cost risks associated with the Cost Plus Fixed Fee (CPFF) contract type for these complex ship services, and how are they being managed?

CPFF contracts carry the risk of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. For complex services like post-delivery planning for a major vessel, unforeseen issues can arise, increasing costs. Effective management requires stringent cost tracking, clear scope definition, and proactive identification of potential cost drivers by the government contracting officer.

How does the government plan to ensure the effectiveness and efficiency of the awarded services, given the lack of competitive pressure?

Effectiveness and efficiency in a sole-source scenario rely heavily on strong contract administration and performance monitoring. The government must establish clear performance metrics, conduct regular progress reviews, and maintain open communication with the contractor. Incentives for performance and penalties for deficiencies, if outlined in the contract, can also drive desired outcomes.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002416R2461

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc

Address: 1000 ACCESS RD, PASCAGOULA, MS, 39567

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

Financial Breakdown

Contract Ceiling: $83,658,400

Exercised Options: $82,815,763

Current Obligation: $66,104,496

Actual Outlays: $168,300

Subaward Activity

Number of Subawards: 61

Total Subaward Amount: $12,161,415

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline