DoD's $440M Submarine Planning Yard Contract to Huntington Ingalls Faces Limited Competition
Contract Overview
Contract Amount: $440,183,215 ($440.2M)
Contractor: Huntington Ingalls Inc
Awarding Agency: Department of Defense
Start Date: 2019-12-20
End Date: 2026-06-30
Contract Duration: 2,384 days
Daily Burn Rate: $184.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FY20-24 IN-SERVICE SUBMARINE PLANNING YARD
Place of Performance
Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $440.2 million to HUNTINGTON INGALLS INC for work described as: FY20-24 IN-SERVICE SUBMARINE PLANNING YARD Key points: 1. Significant contract value of $440M awarded to a single large business. 2. Limited competition raises concerns about potential price inflation and reduced innovation. 3. The contract is for essential submarine planning and repair services, critical for national defense. 4. Sector context: Shipbuilding and Repair is a specialized, high-value industry.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly. Benchmarking against similar submarine maintenance contracts is difficult due to the specialized nature of planning yard services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not competed, indicating a potential sole-source or limited competition scenario. This lack of robust competition may hinder price discovery and potentially lead to higher costs for taxpayers.
Taxpayer Impact: The absence of full and open competition could result in taxpayers paying more than necessary for these critical submarine services.
Public Impact
Ensures continued readiness and maintenance of the Virginia-class submarine fleet. Supports a critical segment of the defense industrial base. Potential for cost inefficiencies due to limited competition impacts taxpayer funds.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Essential service for national security
- Experienced contractor
Sector Analysis
This contract falls within the Shipbuilding and Repair sector, characterized by high barriers to entry and significant capital investment. Benchmarks for planning yard services are scarce, making direct cost comparisons challenging.
Small Business Impact
The contract was awarded to Huntington Ingalls Inc., a large business. There is no indication of small business participation in this specific contract, which is common for highly specialized defense services.
Oversight & Accountability
Oversight will be crucial to ensure the Cost Plus Fixed Fee structure does not lead to excessive costs. The Department of the Navy's contracting activity needs to monitor performance and expenditures closely.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost-plus contract type increases risk of cost overruns.
- Long contract duration (2019-2026) extends potential for issues.
- Limited transparency on justification for non-competition.
Tags
ship-building-and-repairing, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $440.2 million to HUNTINGTON INGALLS INC. FY20-24 IN-SERVICE SUBMARINE PLANNING YARD
Who is the contractor on this award?
The obligated recipient is HUNTINGTON INGALLS 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 $440.2 million.
What is the period of performance?
Start: 2019-12-20. End: 2026-06-30.
What is the justification for not competing this essential submarine planning yard contract, and what steps are being taken to ensure fair pricing?
The justification for not competing this contract is not explicitly stated in the provided data. However, for specialized services like submarine planning yards, agencies may cite unique capabilities or urgent needs. To ensure fair pricing, the Department of the Navy should conduct thorough cost analyses and potentially explore future competitive strategies for similar services.
What are the potential risks associated with a limited competition contract for submarine maintenance, particularly regarding long-term cost and innovation?
A limited competition contract risks higher costs due to reduced market pressure and potential complacency from the contractor. Over the long term, this can stifle innovation as the contractor may have less incentive to develop more efficient methods. It also limits opportunities for emerging companies to enter the market and offer competitive solutions.
How does the Cost Plus Fixed Fee (CPFF) contract structure impact the effectiveness of this submarine planning yard contract in terms of cost control?
The CPFF structure aims to provide a reasonable profit margin for the contractor while allowing the government to pay actual costs incurred. However, it places a significant burden on the government to meticulously monitor and audit costs to prevent overruns. Effectiveness in cost control is highly dependent on the government's oversight capabilities and the contractor's cost management practices.
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: N0002419R2109
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Huntington Ingalls Industries, Inc
Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $462,275,810
Exercised Options: $462,275,810
Current Obligation: $440,183,215
Actual Outlays: $2,878,579
Subaward Activity
Number of Subawards: 22
Total Subaward Amount: $3,766,755
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-12-20
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2026-01-12
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