Navy awards $233M modernization contract for USS Tortuga, BAE Systems to perform work

Contract Overview

Contract Amount: $233,139,357 ($233.1M)

Contractor: BAE Systems Maritime Solutions Norfolk Inc.

Awarding Agency: Department of Defense

Start Date: 2017-11-09

End Date: 2021-03-18

Contract Duration: 1,225 days

Daily Burn Rate: $190.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CL::IGF USS TORTUGA (LSD 46) MODERNIZATION PERIOD (MODPRD)AVAILABILITY

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $233.1 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. for work described as: IGF::CL::IGF USS TORTUGA (LSD 46) MODERNIZATION PERIOD (MODPRD)AVAILABILITY Key points: 1. Contract awarded to BAE Systems Maritime Solutions for modernization of USS Tortuga. 2. Work to be performed over a 1225-day period. 3. Contract type is Firm Fixed Price, indicating defined costs. 4. Awarded under Full and Open Competition. 5. Small business set-aside was not utilized. 6. The contract value is $233,313,935. 7. The period of performance spans from November 2017 to March 2021.

Value Assessment

Rating: good

The contract value of $233.3 million for the modernization of a naval vessel appears reasonable given the scope of work typically involved in such projects. While specific benchmarks for this exact modernization are not readily available, similar large-scale naval ship repair and modernization efforts often fall within this cost range. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for value if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. The presence of two bids suggests a competitive environment, which generally leads to better pricing and terms for the government. The specific number of bidders and the evaluation criteria would provide further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are the U.S. Navy, which receives a modernized and more capable vessel. The services delivered include modernization and repair of the USS Tortuga (LSD 46). The work is expected to be performed in Norfolk, Virginia. This contract supports skilled labor in the shipbuilding and repair industry, potentially impacting the maritime workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays impacting operational readiness of the USS Tortuga.
Risk of cost increases if unforeseen issues arise during modernization, despite fixed-price contract.
Dependence on a single contractor for a critical modernization project.

Positive Signals

Firm Fixed Price contract structure provides cost certainty.
Awarded through full and open competition, suggesting competitive pricing.
Experienced contractor (BAE Systems) with a track record in maritime solutions.

Sector Analysis

This contract falls within the Ship Building and Repairing sector, a critical component of the defense industrial base. The market for naval vessel modernization is specialized, with a limited number of large contractors capable of undertaking such complex projects. Spending in this sector is heavily influenced by defense budgets and strategic priorities, with significant investments made annually in maintaining and upgrading naval fleets.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the primary award went to a large prime contractor, and the direct impact on the small business ecosystem may be limited unless BAE Systems actively engages small businesses as subcontractors.

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 inherent in the firm fixed-price contract, requiring the contractor to deliver specified services within the agreed budget. Transparency is generally maintained through contract award notices and reporting requirements, though detailed oversight reports are not provided here.

Related Government Programs

Naval Ship Modernization Programs
Amphibious Assault Ship Maintenance
Defense Shipbuilding and Repair Contracts
BAE Systems Maritime Contracts

Risk Flags

Potential for schedule slippage impacting fleet readiness.
Risk of unforeseen technical challenges during modernization.
Quality control concerns inherent in large-scale repair/modernization projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $233.1 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC.. IGF::CL::IGF USS TORTUGA (LSD 46) MODERNIZATION PERIOD (MODPRD)AVAILABILITY

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS NORFOLK 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 $233.1 million.

What is the period of performance?

Start: 2017-11-09. End: 2021-03-18.

What is the historical spending trend for USS Tortuga modernization and maintenance?

Analyzing historical spending for the USS Tortuga (LSD 46) reveals a pattern of periodic maintenance and modernization efforts. Prior to this $233 million contract awarded in late 2017, the vessel would have undergone various maintenance availabilities and potentially smaller upgrade projects. Without access to specific historical contract data for this hull, it's difficult to provide precise figures. However, naval vessels of this class typically require significant investment over their service life, with major modernization periods occurring every several years to incorporate new technologies and extend operational capability. The $233 million figure represents a substantial, likely multi-year, modernization effort, suggesting a significant upgrade rather than routine maintenance.

How does the awarded amount compare to similar naval vessel modernization contracts?

The $233.3 million awarded to BAE Systems for the USS Tortuga modernization is a significant sum, typical for major overhauls of naval vessels. Comparing it to similar contracts requires identifying comparable ship classes (e.g., other LSDs, LPDs) and the scope of their modernization. For instance, modernization contracts for larger vessels like aircraft carriers or amphibious assault ships can easily run into hundreds of millions or even billions of dollars. For a dock landing ship, this amount suggests a comprehensive modernization, potentially including upgrades to propulsion, combat systems, habitability, and structural integrity. While precise benchmarks are proprietary, this value aligns with the upper end of major modernization efforts for mid-sized naval combatants or support vessels.

What are the key performance indicators (KPIs) used to evaluate BAE Systems' performance on this contract?

While the specific KPIs for this contract are not publicly detailed, typical performance indicators for naval vessel modernization contracts include adherence to schedule, cost control (especially critical for fixed-price contracts where deviations are penalized), quality of workmanship, and meeting technical specifications. For the USS Tortuga modernization, the Navy would likely track milestones related to specific system upgrades (e.g., combat systems integration, propulsion overhauls), shipyard performance metrics (e.g., man-hours per task, production efficiency), and successful testing and trials post-modernization. Meeting the contract's defined delivery dates and ensuring the vessel's operational readiness upon completion are paramount.

What is the track record of BAE Systems Maritime Solutions in executing similar naval modernization contracts?

BAE Systems Maritime Solutions has a substantial track record in the defense sector, particularly in shipbuilding, repair, and modernization for the U.S. Navy and other allied navies. They have been involved in numerous complex projects, including the overhaul and modernization of various naval platforms, such as destroyers, cruisers, and amphibious ships. Their experience encompasses a wide range of upgrades, from routine maintenance availabilities to extensive service life extensions and technology insertions. While specific performance details on every contract are not always public, BAE Systems is generally considered a major, capable contractor in this domain, possessing the infrastructure, skilled workforce, and technical expertise required for large-scale naval modernization efforts like the one for the USS Tortuga.

What are the potential risks associated with the firm fixed-price (FFP) contract type for this modernization?

The primary risk associated with a Firm Fixed-Price (FFP) contract for a complex project like a naval vessel modernization is the potential for the contractor to cut corners on quality or scope to maintain profitability if unforeseen issues arise. While FFP shifts cost risk to the contractor, significant technical challenges or discovery of unexpected structural problems during the modernization could lead to disputes, delays, or contractor claims for equitable adjustments, even under an FFP. The government's risk lies in ensuring that the initial scope is well-defined and that robust oversight is in place to monitor quality and prevent substandard work. For the Navy, the risk is that the vessel may not be modernized to the desired standard or that delays occur if the contractor struggles with unexpected complexities.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002417R4403

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 750 W BERKLEY AVE, NORFOLK, VA, 23523

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

Financial Breakdown

Contract Ceiling: $253,285,820

Exercised Options: $233,139,357

Current Obligation: $233,139,357

Actual Outlays: $25,869,305

Subaward Activity

Number of Subawards: 519

Total Subaward Amount: $174,504,340

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline