DoD's $58.8M contract for USS Howard DMP awarded to BAE Systems, highlighting shipbuilding and repair needs

Contract Overview

Contract Amount: $58,809,675 ($58.8M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2017-12-22

End Date: 2019-08-09

Contract Duration: 595 days

Daily Burn Rate: $98.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS HOWARD DMP

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $58.8 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: USS HOWARD DMP Key points: 1. The contract value of $58.8M for the USS Howard DMP appears to be a significant investment in naval readiness. 2. BAE Systems, a major defense contractor, secured this award, indicating established capabilities in shipbuilding and repair. 3. The definitive contract type suggests a commitment to a specific project with defined deliverables. 4. The fixed-price nature of the contract aims to control costs for the Department of the Navy. 5. The contract duration of 595 days points to a substantial undertaking in terms of project scope and timeline. 6. The absence of small business set-asides suggests the scope may have been beyond the typical capacity of smaller firms.

Value Assessment

Rating: good

The $58.8M contract value for the USS Howard DMP is substantial, reflecting the complexity of naval vessel maintenance and upgrades. Benchmarking against similar shipbuilding and repair contracts would provide a clearer picture of value for money. However, given the specialized nature of naval shipbuilding, BAE Systems' established expertise likely justifies a significant portion of the cost. The firm fixed-price structure suggests an effort to manage cost overruns, which is a positive indicator for value.

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 considered. The specific number of bidders is not provided, but this approach generally fosters a competitive environment, driving better pricing and innovation. The Department of the Navy's decision to use full and open competition suggests confidence in the market's ability to meet the requirements for the USS Howard DMP.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, potentially leading to lower prices and more efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who will operate and maintain the USS Howard, ensuring its operational readiness. The contract delivers critical maintenance, repair, and potentially modernization services for a naval vessel. The geographic impact is centered in California, where BAE Systems Maritime Solutions operates, and potentially where the USS Howard is stationed. The contract supports skilled labor within the shipbuilding and repair industry, contributing to the defense industrial base workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the complex repair and maintenance process.
Dependence on a single contractor (BAE Systems) for a critical naval asset could pose risks if performance issues emerge.
The long duration of the contract could lead to scope creep or changes in requirements that impact final cost.
Limited visibility into the specific technical details of the 'DMP' (Depot Modernization Program) makes a full risk assessment challenging.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process and competitive pricing.
Firm fixed-price contract structure helps to mitigate cost escalation risks for the government.
BAE Systems has a significant track record in naval shipbuilding and repair, indicating a high likelihood of successful execution.
The contract supports a critical naval asset, directly contributing to national defense readiness.
The duration of the contract allows for thorough and comprehensive work on the vessel.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, characterized by high technical complexity, significant capital investment, and long project timelines. This contract falls within the broader naval shipbuilding and repair market, which is dominated by a few large, specialized contractors. Spending in this sector is driven by the need to maintain and modernize the fleet, ensuring operational readiness and technological superiority. Comparable spending benchmarks would typically involve other major overhauls or modernization programs for naval vessels.

Small Business Impact

The contract was not awarded as a small business set-aside, and there is no indication of a specific small business subcontracting plan being a primary driver. This suggests the scope and complexity of the work likely required the capabilities of a large prime contractor like BAE Systems. While direct set-asides were absent, large prime contractors often engage small businesses for specialized components or services, so indirect subcontracting opportunities may exist.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring BAE Systems to deliver specified outcomes within the agreed budget. Transparency is generally maintained through contract award notices and reporting requirements, though detailed project-specific oversight information may not be publicly available. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations if any issues of fraud, waste, or abuse were identified.

Related Government Programs

Naval Ship Maintenance and Repair
Shipbuilding and Repair Contracts
Defense Procurement
Naval Vessel Modernization
Department of the Navy Contracts

Risk Flags

Potential for schedule delays due to complexity of modernization.
Risk of cost overruns if unforeseen issues arise during repair.
Dependence on a single large contractor for critical asset.
Limited public detail on specific scope of 'DMP'.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.8 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. USS HOWARD DMP

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 $58.8 million.

What is the period of performance?

Start: 2017-12-22. End: 2019-08-09.

What is the specific scope of work encompassed by the 'DMP' (Depot Modernization Program) for the USS Howard?

The provided data does not detail the specific scope of work for the 'DMP' (Depot Modernization Program) for the USS Howard. Typically, such programs involve a comprehensive overhaul, including structural repairs, system upgrades (e.g., propulsion, combat systems, electronics), habitability improvements, and potentially modernization to extend the vessel's service life. The exact nature of the work would be defined in the contract's statement of work, which is not publicly available in this dataset. Understanding the DMP's specifics is crucial for assessing the true value and risks associated with the $58.8 million contract.

How does the $58.8 million contract value compare to historical spending on similar modernization programs for destroyers of the USS Howard's class?

Without knowing the specific class of the USS Howard (e.g., Arleigh Burke-class) and the exact scope of the 'DMP', a precise historical comparison is difficult. However, major depot modernization programs for destroyers can range from tens of millions to over a hundred million dollars, depending on the extent of upgrades and the vessel's condition. The $58.8 million figure appears to be within a plausible range for a significant modernization effort, but a detailed benchmark against comparable DDG modernization contracts would be necessary for a definitive value assessment. Factors like the age of the vessel, technological obsolescence, and required combat system upgrades heavily influence costs.

What is BAE Systems Maritime Solutions' track record with similar naval vessel modernization contracts?

BAE Systems Maritime Solutions is a major defense contractor with extensive experience in naval shipbuilding, repair, and modernization. They have a well-established track record working with the U.S. Navy on various vessel classes, including destroyers, aircraft carriers, and amphibious assault ships. Their capabilities often encompass complex overhauls, system integration, and upgrades. While specific details of past DMP-equivalent contracts are not provided here, BAE's general standing in the industry suggests they possess the necessary expertise and infrastructure to execute such projects. Performance history on prior contracts would be a key indicator of future success.

What are the key performance indicators (KPIs) or milestones outlined in this contract for BAE Systems?

The provided data does not specify the key performance indicators (KPIs) or milestones for this contract. Typically, firm fixed-price contracts for complex projects like vessel modernization include detailed schedules with specific delivery dates for different phases of work, technical reviews, and final acceptance criteria. These milestones are crucial for tracking progress and ensuring the contractor meets its obligations. The absence of this information in the summary data limits the ability to assess project management and performance monitoring effectiveness.

Are there any identified risks or challenges associated with this specific contract or the USS Howard's condition that might impact performance?

The provided data does not explicitly list risks associated with this contract or the USS Howard's condition. However, general risks inherent in naval vessel modernization include unforeseen structural issues discovered during disassembly, integration challenges with upgraded systems, delays in component delivery, and potential labor shortages. The age and operational tempo of the USS Howard could also present unique challenges. A thorough risk assessment would typically be conducted by the Navy prior to and during the contract execution, with mitigation strategies developed.

How does the $58.8 million expenditure align with the Department of the Navy's overall shipbuilding and maintenance budget priorities?

This contract represents a specific allocation within the Department of the Navy's broader budget for maintaining and modernizing its fleet. The $58.8 million expenditure on the USS Howard DMP would be one of many investments aimed at ensuring the readiness and capability of naval assets. To assess alignment, one would need to examine the Navy's current shipbuilding plan, fleet readiness goals, and the allocation of funds across different ship classes and maintenance programs. This single contract's alignment is best understood within the context of the Navy's strategic priorities for its destroyer force and overall fleet modernization strategy.

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: N0002417R4432

Offers Received: 1

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: $58,809,675

Exercised Options: $58,809,675

Current Obligation: $58,809,675

Subaward Activity

Number of Subawards: 203

Total Subaward Amount: $32,442,135

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline