DoD's $137M contract for USS Bulkeley (DDG 84) FY19 DMP awarded to BAE Systems Maritime Solutions

Contract Overview

Contract Amount: $137,376,441 ($137.4M)

Contractor: BAE Systems Maritime Solutions Norfolk Inc.

Awarding Agency: Department of Defense

Start Date: 2019-02-01

End Date: 2020-10-09

Contract Duration: 616 days

Daily Burn Rate: $223.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CL::IGF USS BULKELEY (DDG 84) FY19 DMP

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $137.4 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. for work described as: IGF::CL::IGF USS BULKELEY (DDG 84) FY19 DMP Key points: 1. Value for money assessed through comparison with similar naval vessel maintenance contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract type (firm-fixed-price) which shifts cost risk to the contractor. 4. Performance context relies on the successful completion of scheduled maintenance and modernization. 5. Sector positioning within the naval shipbuilding and repair industry, a critical defense capability.

Value Assessment

Rating: good

The contract value of approximately $137 million for the FY19 Dry Docking and Modernization Program (DMP) for the USS Bulkeley (DDG 84) appears reasonable when benchmarked against similar complex naval vessel maintenance and upgrade contracts. Firm-fixed-price contracts, while offering cost certainty, require careful initial pricing by the contractor. Without specific cost breakdowns or detailed comparisons to prior maintenance cycles for this vessel class, a precise value-for-money assessment is challenging. However, the competitive nature of the award suggests that pricing was scrutinized against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of three bidders, as suggested by the 'no' field, points to a healthy level of competition for this significant naval maintenance requirement. A competitive bidding process generally leads to more favorable pricing for the government and encourages contractors to offer their best value propositions.

Taxpayer Impact: The full and open competition for this contract is beneficial for taxpayers as it likely resulted in a more competitive price than a sole-source or limited competition award, maximizing the use of public funds.

Public Impact

The primary beneficiaries are the U.S. Navy, ensuring the operational readiness and modernization of a critical Arleigh Burke-class destroyer. Services delivered include essential maintenance, repair, and modernization activities to extend the service life and enhance the capabilities of the USS Bulkeley. The geographic impact is centered around the vessel's homeport and the shipyard performing the work, likely in Norfolk, Virginia, supporting local economies and skilled labor. Workforce implications include employment for skilled tradespeople, engineers, and support staff at the winning contractor's facility and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical issues arise during the complex modernization process, despite the firm-fixed-price structure.
Dependence on the contractor's ability to manage the supply chain for specialized parts and materials within the contract timeline.
Ensuring the quality of work meets stringent naval standards for critical ship systems.
Potential for schedule delays impacting the Navy's operational deployment schedule if the contractor faces performance issues.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract type shifts cost risk to the contractor, providing budget certainty for the government.
The contract duration (616 days) allows for comprehensive maintenance and modernization activities.
The contractor, BAE Systems Maritime Solutions, is a known entity in naval shipbuilding and repair, implying relevant experience.

Sector Analysis

The naval shipbuilding and repair sector is a vital component of the defense industrial base, characterized by high technical complexity, significant capital investment, and long contract durations. This contract falls within the Ship Building and Repairing (NAICS 336611) industry. Spending in this sector is heavily influenced by defense budgets and strategic naval requirements. Comparable spending benchmarks would involve analyzing other major maintenance availabilities and modernization programs for vessels of similar size and complexity within the U.S. Navy fleet.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While BAE Systems Maritime Solutions is a large prime contractor, they may engage small businesses as subcontractors for specialized services or components. The subcontracting opportunities for small businesses would depend on the specific work packages BAE Systems identifies and procures, contributing to the broader small business ecosystem within the defense industrial base.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers, ensuring adherence to contract terms, specifications, and delivery schedules. Quality assurance representatives would likely be present at the shipyard to monitor the work. Transparency is facilitated through contract award announcements and reporting mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Vessel Maintenance and Repair
Shipbuilding and Conversion
Arleigh Burke-class Destroyer Programs
Department of the Navy Ship Maintenance Contracts
Defense Industrial Base Support

Risk Flags

Potential for cost overruns if unforeseen issues arise during modernization.
Risk of schedule delays impacting fleet readiness.
Ensuring quality standards are met for critical ship systems.
Contractor's ability to manage complex supply chains for specialized parts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $137.4 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC.. IGF::CL::IGF USS BULKELEY (DDG 84) FY19 DMP

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 $137.4 million.

What is the period of performance?

Start: 2019-02-01. End: 2020-10-09.

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

BAE Systems Maritime Solutions has a significant history of performing complex maintenance, repair, and modernization work for the U.S. Navy, including on various classes of warships. Their experience often encompasses dry-docking, hull repairs, propulsion system overhauls, and combat system upgrades. Analyzing their past performance on similar contracts, particularly for Arleigh Burke-class destroyers, would provide insight into their ability to manage scope, schedule, and quality. Past performance reviews, contract award histories, and any reported issues or successes on previous engagements are crucial for assessing their capability to execute this specific $137 million contract effectively. Their established presence in Norfolk, Virginia, also suggests logistical advantages for this particular vessel's maintenance cycle.

How does the $137 million contract value compare to historical spending on similar maintenance for the USS Bulkeley or its sister ships?

To benchmark the $137 million contract value, historical spending data for the USS Bulkeley's previous Dry Docking and Modernization Programs (DMP) or similar maintenance availabilities for other Arleigh Burke-class destroyers would be essential. Factors influencing cost include the scope of work (e.g., specific modernization upgrades, extent of hull work), inflation, and the competitive environment at the time of award. If previous DMPs for this class averaged significantly lower or higher amounts, it would warrant further investigation into the reasons. For instance, a higher current value might reflect increased modernization requirements, inflation, or a less competitive bidding landscape compared to prior periods. Conversely, a lower value could indicate a reduced scope or highly competitive pricing.

What are the primary risks associated with a firm-fixed-price contract for complex naval vessel modernization?

While firm-fixed-price (FFP) contracts offer budget certainty by shifting cost risk to the contractor, they introduce specific risks in complex projects like naval vessel modernization. The primary risk is that the contractor may underestimate the costs or encounter unforeseen technical challenges (e.g., discovering unexpected hull degradation, obsolescence issues with systems). If these issues require significant additional work or materials beyond the initial FFP scope, the contractor might face financial losses, potentially leading to pressure to cut corners on quality or schedule. Conversely, a well-priced FFP contract can be highly advantageous for the government. Effective risk mitigation involves thorough pre-award technical assessments, clear contract specifications, and robust government oversight to ensure quality and adherence to scope.

What is the expected impact of this contract on the operational readiness of the U.S. Navy's destroyer fleet?

This contract directly supports the operational readiness of the U.S. Navy by ensuring the USS Bulkeley (DDG 84) undergoes essential maintenance and modernization. Such programs are critical for extending the service life of these highly capable warships, maintaining their combat effectiveness, and incorporating necessary technological upgrades. By completing the FY19 DMP, the Navy aims to prevent major system failures, address wear and tear, and potentially enhance the vessel's capabilities, allowing it to continue its role in fleet operations, power projection, and national security missions. Delays or subpar execution of this contract could negatively impact the availability of this specific asset for deployment.

How does the duration of 616 days (approximately 20 months) influence the assessment of this contract?

The duration of 616 days for the USS Bulkeley's FY19 DMP indicates a substantial undertaking, encompassing not just routine maintenance but likely significant modernization efforts. This extended period allows for in-depth work, including potential upgrades to combat systems, electronics, or habitability, alongside hull and machinery repairs. From an assessment perspective, a longer duration necessitates robust project management and oversight from both the contractor and the Navy to ensure efficiency and prevent scope creep or delays. It also means the vessel will be unavailable for operational duties for an extended period, requiring the Navy to adjust fleet deployment schedules. The firm-fixed-price nature over such a long duration underscores the contractor's commitment to managing costs and risks throughout the extensive work.

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: N0002418R4448

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

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

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

Financial Breakdown

Contract Ceiling: $144,174,768

Exercised Options: $137,376,441

Current Obligation: $137,376,441

Actual Outlays: $16,814,960

Subaward Activity

Number of Subawards: 134

Total Subaward Amount: $23,326,492

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline