Navy awards $443.7M for ship maintenance, with Vigor Marine LLC securing the contract

Contract Overview

Contract Amount: $443,725,249 ($443.7M)

Contractor: Vigor Marine LLC

Awarding Agency: Department of Defense

Start Date: 2019-09-25

End Date: 2024-10-28

Contract Duration: 1,860 days

Daily Burn Rate: $238.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS CHOSIN USS CAPE ST GEORGE

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98101

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $443.7 million to VIGOR MARINE LLC for work described as: USS CHOSIN USS CAPE ST GEORGE Key points: 1. Contract value represents a significant investment in naval readiness and infrastructure. 2. Competition dynamics suggest a robust bidding process for this substantial award. 3. Performance risk appears moderate given the nature of ship maintenance services. 4. This contract aligns with broader defense spending trends focused on fleet sustainment. 5. The shipbuilding and repair sector is critical for maintaining naval operational capabilities.

Value Assessment

Rating: good

The contract value of $443.7 million for ship maintenance is substantial. Benchmarking against similar large-scale naval repair contracts is challenging without more specific service details. However, the firm-fixed-price structure suggests that cost overruns are primarily the contractor's responsibility, which can be a positive indicator of value if managed effectively. The number of bids received (3) provides some basis for price negotiation, but a more detailed cost analysis would be needed to definitively assess value-for-money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With three bidders participating, there was a degree of competition, which generally helps in achieving fair market prices. The level of competition suggests that the Navy sought to leverage market forces to obtain the best value. However, the specific details of the bidding process and the nature of the specialized services required could influence the ultimate price competitiveness.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down costs and ensuring the government receives competitive pricing for essential services like ship maintenance.

Public Impact

Naval fleet readiness and operational capability are directly enhanced by the maintenance services provided. The contract supports the U.S. Navy's mission to maintain a global presence and project power. Shipyards and associated businesses in Washington state are likely to benefit from this contract through employment and economic activity. Skilled labor in shipbuilding and repair trades will be in demand, supporting the maritime workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays in complex ship maintenance projects.
Ensuring consistent quality across all repair and maintenance tasks is crucial.
Managing the scope of work effectively to prevent cost creep, despite the fixed-price nature.

Positive Signals

Firm-fixed-price contract type incentivizes cost control by the contractor.
Full and open competition suggests a competitive bidding environment.
The contract duration allows for sustained support and planning for the Navy.

Sector Analysis

The shipbuilding and repair sector is a vital component of the defense industrial base, supporting naval operations and national security. This contract falls within the broader category of defense procurement, specifically focusing on the sustainment and maintenance of naval assets. The market for large-scale ship repair is often concentrated among a few specialized firms capable of handling complex naval vessels. Spending in this area is typically driven by fleet size, age, and operational tempo.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, large prime contractors are often required to meet small business subcontracting goals. The prime contractor, Vigor Marine LLC, will likely engage various subcontractors, potentially including small businesses, for specialized services or components, contributing to the small business ecosystem. The extent of small business participation will depend on the subcontracting plan developed by Vigor Marine.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Performance monitoring, quality assurance checks, and adherence to contract terms will be key oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for the Department of Defense may also conduct audits or investigations if concerns arise regarding waste, fraud, or abuse.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Defense Readiness Contracts
Fleet Sustainment Programs

Risk Flags

Potential for cost overruns if scope is not well-defined
Risk of schedule delays in complex repair operations
Ensuring quality standards are met across all maintenance tasks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $443.7 million to VIGOR MARINE LLC. USS CHOSIN USS CAPE ST GEORGE

Who is the contractor on this award?

The obligated recipient is VIGOR MARINE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $443.7 million.

What is the period of performance?

Start: 2019-09-25. End: 2024-10-28.

What is Vigor Marine LLC's track record with large naval maintenance contracts?

Vigor Marine LLC has a significant history of performing complex industrial services, including shipbuilding and repair, for various government and commercial clients. They have been involved in numerous contracts with the U.S. Navy and other maritime agencies, often handling large-scale projects such as ship construction, conversion, and extensive repair work. Their experience typically includes managing large workforces, complex logistics, and adhering to stringent quality and safety standards. While specific performance metrics for past naval contracts are not detailed here, their continued success in securing substantial awards suggests a generally positive track record in delivering required services. Further analysis would involve reviewing past performance evaluations and any documented issues or commendations.

How does the $443.7 million award compare to historical spending on similar naval maintenance contracts?

The $443.7 million award for ship maintenance is a substantial figure, indicative of a major contract. To provide a precise comparison, one would need to analyze historical data for similar types of naval maintenance, such as major overhauls or modernization programs for vessels of comparable size and complexity. For instance, contracts for aircraft carrier maintenance or submarine refits can often exceed this amount significantly due to the intricate systems involved. Conversely, routine maintenance or smaller repair jobs would be considerably less. Without knowing the specific scope of work (e.g., hull repair, system upgrades, dry-docking), it's difficult to benchmark precisely, but this award falls within the range of significant, multi-year sustainment contracts for naval assets.

What are the primary risk indicators associated with this type of ship maintenance contract?

Key risk indicators for this ship maintenance contract include potential schedule overruns due to the complexity of naval vessel repairs, unforeseen technical challenges discovered during the work, and the availability of specialized labor and parts. The firm-fixed-price nature, while beneficial for cost control, can also introduce risk if the contractor underestimates the scope or complexity, potentially leading to quality compromises or financial strain if not managed meticulously. Furthermore, the operational tempo of the Navy and the condition of the vessels themselves can introduce risks related to the urgency and scope of required repairs. Ensuring robust quality assurance and project management by both the contractor and the Navy is critical to mitigating these risks.

How effective is the firm-fixed-price contract type in ensuring program effectiveness for naval maintenance?

The firm-fixed-price (FFP) contract type is generally considered effective for naval maintenance when the scope of work is well-defined and understood. It places the primary financial risk on the contractor, incentivizing them to manage costs efficiently and complete the work within budget. This can lead to greater cost certainty for the government. However, for complex maintenance where unforeseen issues are common, an FFP contract might discourage the contractor from proactively addressing potential problems if it means incurring additional costs, potentially impacting the long-term effectiveness or quality of the repair. In such cases, a cost-plus contract with incentives might be more appropriate, but FFP is often preferred for its budget predictability.

What are the historical spending patterns for ship maintenance and repair within the Department of the Navy?

The Department of the Navy consistently allocates significant portions of its budget to ship maintenance and repair, reflecting the large size and operational demands of its fleet. Historical spending patterns show a steady requirement for these services, driven by the need to maintain readiness, extend vessel service life, and incorporate necessary upgrades. Annual spending can fluctuate based on fleet modernization plans, the age of vessels undergoing major overhauls, and geopolitical demands requiring increased operational tempo. The total annual expenditure for ship maintenance and repair typically runs into the billions of dollars, making individual large contracts like this one a critical component of the overall sustainment 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: N0002419R4447

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vigor Industrial LLC

Address: 5555 N CHANNEL AVE, PORTLAND, OR, 97217

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

Financial Breakdown

Contract Ceiling: $444,184,273

Exercised Options: $443,725,249

Current Obligation: $443,725,249

Actual Outlays: $87,097,419

Subaward Activity

Number of Subawards: 367

Total Subaward Amount: $958,792,164

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline