Navy awards $68.4M contract for USS New Orleans (LPD 18) Dry-docking and Special Refueling Availability

Contract Overview

Contract Amount: $68,424,573 ($68.4M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2016-11-08

End Date: 2019-10-11

Contract Duration: 1,067 days

Daily Burn Rate: $64.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF USS NEW ORLEANS (LPD 18) DSRA

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92113

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $68.4 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: IGF::OT::IGF USS NEW ORLEANS (LPD 18) DSRA Key points: 1. Contract value represents a significant investment in naval readiness and ship maintenance. 2. Competition dynamics suggest a robust bidding process for complex naval repair services. 3. Performance period of over two years indicates a substantial scope of work. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. The contract falls within the broader category of shipbuilding and repair, a critical sector for national defense. 6. Geographic concentration of the award in California may have local economic implications.

Value Assessment

Rating: good

The contract value of $68.4 million for the USS New Orleans (LPD 18) DSRA appears reasonable given the complexity of naval ship maintenance and modernization. While direct comparisons are difficult without specific details on the scope of work, similar large-scale dry-docking and overhaul contracts for naval vessels can range from tens to hundreds of millions of dollars. The firm fixed-price nature of the contract suggests an effort to establish clear cost expectations, which is a positive indicator for value. Benchmarking against historical spending for similar availabilities on LPD-class ships would provide further insight into the pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. The presence of three bidders, as suggested by the 'no' field, points to a healthy level of competition for this significant naval repair and maintenance requirement. A competitive bidding process generally leads to more favorable pricing and better terms for the government, as contractors strive to offer their best value propositions.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by driving down costs through market forces. It allows the Navy to secure the best possible services at the most competitive prices, maximizing the return on investment for public funds.

Public Impact

The primary beneficiaries are the U.S. Navy and national security, ensuring the operational readiness of a key amphibious transport dock ship. The services delivered include dry-docking, special refueling, and other essential maintenance and repair activities. The geographic impact is concentrated in California, where the ship is likely homeported or where the repair facility is located, potentially supporting local jobs in the maritime industry. Workforce implications include employment for skilled tradespeople, engineers, and support staff involved in complex ship repair and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extensive repair work.
Dependence on a single contractor for a critical, long-duration availability could pose risks if performance falters.

Positive Signals

Firm fixed-price contract structure provides cost certainty and limits the government's exposure to price increases.
Award to a known entity like BAE Systems Maritime Solutions suggests a contractor with established capabilities in naval shipbuilding and repair.
Full and open competition indicates a thorough vetting of potential providers, likely resulting in a capable and competitive offer.

Sector Analysis

The shipbuilding and repair sector is a vital component of the defense industrial base, supporting naval fleet readiness and modernization. This contract falls within the broader NAICS code 336611 (Ship Building and Repairing). Spending in this sector is characterized by large, complex projects often awarded through competitive processes to specialized firms. The market size is substantial, driven by government procurement needs for naval vessels and associated maintenance. Comparable spending benchmarks would involve analyzing other major availabilities for LPD-class ships or similar naval platforms.

Small Business Impact

The contract was awarded to BAE Systems Maritime Solutions, a large defense contractor, and there is no indication of a small business set-aside ('sb': false). This suggests that small businesses are unlikely to be direct prime contractors on this specific award. However, BAE Systems may engage small businesses as subcontractors for specialized services or supplies, contributing to the broader small business ecosystem within the defense industrial base. Further analysis of subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is generally maintained through contract award databases and public reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Amphibious Transport Dock Ships (LPD)
Naval Ship Maintenance and Repair
Shipbuilding and Repair Contracts
Department of Defense Procurement
Naval Readiness Programs

Risk Flags

Potential for schedule delays due to complexity of work.
Risk of cost growth if unforeseen issues arise during maintenance.
Contractor performance risk on a large, long-duration project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.4 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. IGF::OT::IGF USS NEW ORLEANS (LPD 18) DSRA

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO 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 $68.4 million.

What is the period of performance?

Start: 2016-11-08. End: 2019-10-11.

What is the historical spending pattern for Dry-docking and Special Refueling Availabilities (DSRA) for LPD-class ships?

Analyzing historical spending for DSRA on LPD-class ships reveals significant investment in maintaining fleet readiness. For instance, similar availabilities for other LPDs have often commanded contract values in the tens of millions of dollars, with some exceeding $50 million depending on the specific scope and duration. The $68.4 million awarded for the USS New Orleans (LPD 18) falls within the higher end of this range, suggesting a comprehensive scope of work or potentially increased costs associated with specialized refueling requirements. Trends may show an increase in costs over time due to inflation, evolving technological requirements, and the aging of the fleet, necessitating more extensive repairs. Understanding these patterns helps in benchmarking current contract values and forecasting future maintenance budgets for the LPD class.

How does the performance of BAE Systems Maritime Solutions compare to other contractors for similar naval repair contracts?

BAE Systems Maritime Solutions is a well-established entity within the naval shipbuilding and repair industry, possessing a track record of performing complex maintenance and modernization for the U.S. Navy. Comparisons of their performance on similar contracts would involve examining metrics such as on-time delivery, adherence to budget, quality of work, and responsiveness to contract modifications. While specific performance data is often proprietary, their consistent selection for major availabilities suggests a generally positive performance history. However, like any large contractor, there may be instances of delays or cost adjustments on specific projects. A comprehensive assessment would require a detailed review of past contract performance reports and customer feedback within the Department of the Navy.

What are the key risks associated with a firm fixed-price contract for a complex naval availability like this?

While firm fixed-price (FFP) contracts are designed to provide cost certainty, they carry inherent risks for the contractor, which can indirectly impact the government. For a complex naval availability, the primary risk is the contractor's underestimation of the work required. Unforeseen issues discovered during dry-docking or refueling, such as structural damage, equipment failures, or environmental remediation needs, can significantly increase costs. If the contractor cannot absorb these unexpected expenses within the fixed price, they may face financial strain, potentially leading to quality compromises, delays, or even contract disputes. The government's risk is that the contractor may cut corners to maintain profitability, or that the contractor might seek contract modifications, which can negate the cost certainty benefit of the FFP structure.

What is the strategic importance of maintaining the operational readiness of LPD-class ships like the USS New Orleans?

LPD-class ships, such as the USS New Orleans, are critical assets for the U.S. Navy's power projection and amphibious assault capabilities. They serve as versatile platforms capable of transporting troops, vehicles, and landing craft, supporting a wide range of military operations, from humanitarian assistance to full-scale combat. Maintaining their operational readiness through regular availabilities like this DSRA is paramount to ensuring the Navy can meet its global commitments and respond effectively to crises. An LPD that is not mission-capable represents a significant gap in naval force structure, potentially impacting fleet deployment schedules and the ability to conduct essential maritime security operations. Therefore, investments in their upkeep are directly tied to national security objectives.

How does the competition level for this contract potentially influence the final price paid by taxpayers?

The fact that this contract was awarded under full and open competition with three bidders is a positive indicator for taxpayer value. When multiple capable companies vie for a contract, they are incentivized to submit competitive bids to win the work. This competitive pressure typically drives down prices compared to what might be offered under a sole-source or limited-competition scenario. The bidders are forced to optimize their cost structures and offer their most efficient solutions. Furthermore, the competition allows the government to select the offer that provides the best overall value, considering not just price but also technical approach, past performance, and schedule. This process helps ensure that taxpayer funds are used judiciously and that the government obtains high-quality services at a fair market price.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002416R4414

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 2205 E BELT ST, SAN DIEGO, CA, 92113

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

Financial Breakdown

Contract Ceiling: $68,424,573

Exercised Options: $68,424,573

Current Obligation: $68,424,573

Subaward Activity

Number of Subawards: 182

Total Subaward Amount: $24,383,889

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline