DoD Awards $463M for LPD 30 LLTM to Huntington Ingalls, Facing Limited Competition

Contract Overview

Contract Amount: $4,630,238,046 ($4.6B)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2018-08-02

End Date: 2031-03-01

Contract Duration: 4,594 days

Daily Burn Rate: $1.0M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: LPD 30 LLTM

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39567

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $4.63 billion to HUNTINGTON INGALLS INCORPORATED for work described as: LPD 30 LLTM Key points: 1. Significant investment in naval shipbuilding with a substantial contract value. 2. Sole-source award raises questions about price discovery and potential cost efficiencies. 3. Long contract duration (over 12 years) presents long-term financial commitment and risk. 4. Focus on shipbuilding sector, critical for national defense capabilities.

Value Assessment

Rating: questionable

The contract value of $463M for LPD 30 LLTM is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts. The fixed-price incentive structure aims to control costs, but the lack of competition limits external validation of pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This method bypasses the typical price discovery mechanisms found in competitive procurements, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The absence of competition in this sole-source award may result in a higher cost to taxpayers than if multiple vendors had vied for the contract.

Public Impact

Ensures continued production of critical naval assets. Supports jobs in the shipbuilding industry, particularly in Mississippi. Long-term commitment to naval modernization and defense readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Long contract duration increases long-term financial exposure.
Fixed-price incentive contracts can still lead to cost overruns if not managed carefully.

Positive Signals

Addresses a critical defense need for naval vessels.
Provides stability for a key defense contractor.
Long-term planning for fleet modernization.

Sector Analysis

This contract falls within the shipbuilding and repairing sector, a critical component of national defense spending. Benchmarks for similar large naval vessel construction are often in the hundreds of millions to billions of dollars, making this contract significant but not necessarily out of line for its scope.

Small Business Impact

The data indicates this is a large prime contract awarded to Huntington Ingalls Incorporated. There is no direct information on small business subcontracting within this data snippet, but large defense contracts often involve significant subcontracting opportunities.

Oversight & Accountability

The Department of the Navy is the awarding agency, responsible for oversight. The long duration of the contract necessitates continuous monitoring to ensure performance, cost control, and adherence to specifications. Accountability will be crucial throughout the contract's lifecycle.

Related Government Programs

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

Risk Flags

Sole-source award
Long contract duration
Potential for cost overruns
Limited transparency in price discovery

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.63 billion to HUNTINGTON INGALLS INCORPORATED. LPD 30 LLTM

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 $4.63 billion.

What is the period of performance?

Start: 2018-08-02. End: 2031-03-01.

What is the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. For LPD 30 LLTM, the Navy likely cited specific technical requirements or the specialized nature of amphibious assault ship construction. A thorough review would confirm if market research was conducted to ensure no other qualified sources existed or if a competitive process was deemed impractical or detrimental to national security.

How will the fixed-price incentive structure be monitored to ensure cost efficiency given the sole-source nature?

Despite the sole-source award, the fixed-price incentive (FPI) contract type implies shared risk and reward between the government and contractor. The Navy must establish clear target costs, incentive targets, and maximum costs. Robust program management, regular performance reviews, and independent cost estimates will be crucial to monitor progress, identify potential cost deviations early, and ensure the contractor is incentivized to meet or beat targets.

What are the long-term implications of this 12-year contract on the Navy's budget and shipbuilding strategy?

A contract spanning over 12 years represents a significant, long-term financial commitment that must be integrated into the Navy's multi-year budget planning. It signals a sustained investment in the LPD program and amphibious capabilities. This could impact the Navy's ability to fund other shipbuilding priorities or modernization efforts, requiring careful strategic allocation of resources and potential trade-offs.

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: N0002418R2406

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

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: $4,657,023,397

Exercised Options: $4,657,023,397

Current Obligation: $4,630,238,046

Subaward Activity

Number of Subawards: 1009

Total Subaward Amount: $692,338,718

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline