Navy Awards $99.4M Ship Repair Contract to Bath Iron Works, Limited Competition
Contract Overview
Contract Amount: $99,440,603 ($99.4M)
Contractor: Bath Iron Works Corporation
Awarding Agency: Department of Defense
Start Date: 2018-05-23
End Date: 2019-02-24
Contract Duration: 277 days
Daily Burn Rate: $359.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: PROVISIONED ITEMS ORDERS (PIO)
Place of Performance
Location: BATH, SAGADAHOC County, MAINE, 04530
State: Maine Government Spending
Plain-Language Summary
Department of Defense obligated $99.4 million to BATH IRON WORKS CORPORATION for work described as: PROVISIONED ITEMS ORDERS (PIO) Key points: 1. Significant contract value of $99.4 million for ship building and repair. 2. Limited competition raises questions about price discovery and potential cost overruns. 3. The contract is a Cost Plus Award Fee type, which can incentivize performance but also lead to higher costs. 4. Sector is Defense (Ship Building and Repair), a critical but often high-cost area.
Value Assessment
Rating: questionable
The Cost Plus Award Fee structure, while incentivizing, can lead to costs exceeding initial estimates. Without competitive bidding, it's difficult to benchmark pricing against market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was 'NOT COMPETED,' indicating a limited competition approach. This likely means the Navy identified a specific need or contractor, potentially impacting the price discovery process and leading to higher costs than a fully competed contract.
Taxpayer Impact: The lack of full and open competition may result in taxpayers paying a premium for these ship repair services.
Public Impact
Taxpayers may be paying more due to the absence of competitive bidding. The contract supports critical naval infrastructure and defense capabilities. Bath Iron Works, a significant employer in Maine, benefits from this contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Award Fee structure
- Potential for cost overruns
Positive Signals
- Supports critical defense infrastructure
- Contract awarded to established shipbuilder
Sector Analysis
This contract falls within the Defense sector, specifically Ship Building and Repair. Spending in this sector is often characterized by high complexity, long lead times, and significant government oversight due to the specialized nature of the work and the strategic importance of naval assets.
Small Business Impact
The data does not indicate any specific provisions or benefits for small businesses within this contract. The award went to Bath Iron Works Corporation, a large entity.
Oversight & Accountability
The 'NOT COMPETED' status suggests a need for robust oversight to ensure the Cost Plus Award Fee structure is managed effectively and that costs remain reasonable despite the lack of competition.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for cost overruns due to contract type
- Limited transparency on justification for non-competition
- High contract value
Tags
ship-building-and-repairing, department-of-defense, me, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $99.4 million to BATH IRON WORKS CORPORATION. PROVISIONED ITEMS ORDERS (PIO)
Who is the contractor on this award?
The obligated recipient is BATH IRON WORKS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $99.4 million.
What is the period of performance?
Start: 2018-05-23. End: 2019-02-24.
What specific factors justified the 'NOT COMPETED' determination for this significant ship repair contract?
The justification for a 'NOT COMPETED' award typically stems from unique capabilities, urgent needs, or the unavailability of alternative sources. For ship repair, this could involve specialized facilities, proprietary knowledge of the specific vessel class, or critical timelines that preclude a lengthy competitive bidding process. Further investigation into the specific circumstances surrounding this award is warranted.
How will the performance incentives in the Cost Plus Award Fee structure be monitored to prevent excessive costs?
Effective oversight of a Cost Plus Award Fee contract requires clear performance metrics and rigorous monitoring by the contracting officer. The Navy must establish objective criteria for award fees, regularly assess Bath Iron Works' performance against these metrics, and ensure that costs incurred are reasonable and allocable. Transparency in reporting and regular audits are crucial to prevent cost overruns and ensure value for taxpayer money.
What is the long-term strategic impact of awarding such a large contract without full competition on the broader shipbuilding and repair market?
Consistently awarding large contracts without full competition can stifle innovation and competition within the shipbuilding and repair market. It may discourage new entrants and limit the development of alternative capabilities. While necessary in some specific circumstances, a pattern of non-competitive awards could lead to reduced market dynamism, potentially higher long-term costs for the government, and a less resilient industrial base.
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: N0002418R4451
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 700 WASHINGTON ST, BATH, ME, 04530
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $117,529,423
Exercised Options: $117,529,423
Current Obligation: $99,440,603
Actual Outlays: $2,488,607
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-05-23
Current End Date: 2019-02-24
Potential End Date: 2019-02-24 00:00:00
Last Modified: 2024-08-08
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