DoD awards $3.15B LHA 9 Advance Procurement to Huntington Ingalls, facing limited competition
Contract Overview
Contract Amount: $3,154,163,794 ($3.2B)
Contractor: Huntington Ingalls Incorporated
Awarding Agency: Department of Defense
Start Date: 2020-04-30
End Date: 2030-12-31
Contract Duration: 3,897 days
Daily Burn Rate: $809.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: LHA 9 ADVANCE PROCUREMENT
Place of Performance
Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39567
Plain-Language Summary
Department of Defense obligated $3.15 billion to HUNTINGTON INGALLS INCORPORATED for work described as: LHA 9 ADVANCE PROCUREMENT Key points: 1. Significant investment in naval shipbuilding capacity. 2. Concentrated award to a single, established prime contractor. 3. Potential for cost overruns in Cost Plus Fixed Fee structure. 4. Long-term contract duration extends through 2030.
Value Assessment
Rating: fair
The contract value of $3.15 billion for advance procurement is substantial. Benchmarking against similar large-scale shipbuilding contracts is difficult due to the unique nature of LHA class vessels and the specific phase of procurement.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, indicating a limited competition approach. This likely stems from the specialized nature of the work and the existing relationship with Huntington Ingalls as the sole builder of LHA class ships, potentially impacting price discovery.
Taxpayer Impact: Taxpayer funds are committed to a single source for a critical defense asset, with limited opportunity for competitive pricing to reduce costs.
Public Impact
Supports national defense shipbuilding capabilities. Ensures continued employment and economic activity in Mississippi. Advances the modernization of the U.S. Navy's amphibious assault fleet.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee structure
- Long contract duration
Positive Signals
- Supports critical defense infrastructure
- Investment in advanced shipbuilding technology
Sector Analysis
This contract falls within the shipbuilding and repair sector, a high-cost, capital-intensive industry critical for national defense. Spending benchmarks are highly variable, dependent on vessel type and complexity.
Small Business Impact
The contract data does not indicate any specific subcontracting goals or participation from small businesses. The prime contractor, Huntington Ingalls, is a large corporation.
Oversight & Accountability
The Department of the Navy is responsible for oversight. The long duration and Cost Plus Fixed Fee structure necessitate robust oversight to manage costs and ensure performance.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Limited competition may lead to higher costs.
- Cost Plus Fixed Fee structure increases risk of cost overruns.
- Long contract duration (through 2030) presents long-term financial commitment.
- Advance procurement phase may not fully capture total program cost efficiencies.
Tags
ship-building-and-repairing, department-of-defense, ms, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.15 billion to HUNTINGTON INGALLS INCORPORATED. LHA 9 ADVANCE PROCUREMENT
Who is the contractor on this award?
The obligated recipient is HUNTINGTON INGALLS INCORPORATED.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $3.15 billion.
What is the period of performance?
Start: 2020-04-30. End: 2030-12-31.
What is the projected total cost of the LHA 9 program, and how does this advance procurement figure compare to the overall lifecycle cost?
The total projected cost for the LHA 9 program is not explicitly detailed in this data. This $3.15 billion is for advance procurement, covering long-lead time materials and components. The full construction cost will be significantly higher, and this figure represents an initial investment phase rather than the complete program expenditure.
What specific risks are associated with the Cost Plus Fixed Fee contract type for this advance procurement phase?
Cost Plus Fixed Fee contracts carry inherent risks of cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. For advance procurement, this can lead to higher-than-expected expenses if material costs escalate or unforeseen technical challenges arise, with the government bearing the brunt of increased costs beyond the initial estimate.
How will the limited competition impact the Navy's ability to secure favorable pricing and technological innovation for future amphibious assault ships?
Limited competition, especially a sole-source award for advance procurement, can reduce pressure on the contractor to offer the most competitive pricing. It may also limit opportunities for alternative technological approaches or innovations that could be introduced through a more competitive bidding process, potentially leading to higher long-term costs and less diverse technological advancements.
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: N0002420R2437
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Huntington Ingalls Industries, Inc
Address: 1000 ACCESS RD, PASCAGOULA, MS, 39567
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,249,632,285
Exercised Options: $3,244,389,425
Current Obligation: $3,154,163,794
Actual Outlays: $507,615
Subaward Activity
Number of Subawards: 446
Total Subaward Amount: $333,386,124
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2020-04-30
Current End Date: 2030-12-31
Potential End Date: 2030-12-31 00:00:00
Last Modified: 2025-12-16
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