DoD Awards $185M Ship Repair Contract to Huntington Ingalls Inc

Contract Overview

Contract Amount: $184,972,321 ($185.0M)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2019-12-20

End Date: 2027-12-31

Contract Duration: 2,933 days

Daily Burn Rate: $63.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: CG PYS CONTRACT AWARD

Place of Performance

Location: PASCAGOULA, JACKSON County, MISSISSIPPI, 39567

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $185.0 million to HUNTINGTON INGALLS INCORPORATED for work described as: CG PYS CONTRACT AWARD Key points: 1. Significant contract value of $185M for ship building and repair. 2. Sole-source award to Huntington Ingalls Inc. raises competition concerns. 3. Long contract duration (2019-2027) suggests potential for cost overruns. 4. Focus on shipbuilding and repair aligns with naval readiness needs.

Value Assessment

Rating: questionable

The contract type is Cost Plus Award Fee, which can incentivize contractors to manage costs effectively but also carries inherent risk if not properly overseen. Benchmarking against similar contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for this large contract may result in taxpayers paying a premium for shipbuilding and repair services.

Public Impact

Impacts naval readiness and shipbuilding capabilities. Potential for significant taxpayer investment in defense infrastructure. Highlights reliance on a single large contractor for critical services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Award Fee contract type
Long contract duration

Positive Signals

Supports critical naval shipbuilding and repair
Long-term commitment to a major defense contractor

Sector Analysis

This contract falls within the shipbuilding and repair sector, a critical component of national defense. Spending in this area is often substantial and driven by fleet modernization and maintenance requirements.

Small Business Impact

The data indicates this contract was not awarded to small businesses, suggesting a focus on large prime contractors for this specific requirement.

Oversight & Accountability

The Cost Plus Award Fee structure requires robust oversight from the Department of the Navy to ensure performance objectives are met and costs are controlled effectively. Accountability for performance and cost will be crucial.

Related Government Programs

Ship Building and Repairing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited transparency in pricing
Contractor lock-in

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $185.0 million to HUNTINGTON INGALLS INCORPORATED. CG PYS CONTRACT AWARD

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 $185.0 million.

What is the period of performance?

Start: 2019-12-20. End: 2027-12-31.

What specific factors justified the sole-source award, and were alternatives considered?

Justification for sole-source awards typically involves unique capabilities, urgent needs, or lack of viable alternatives. A thorough review would examine the specific technical requirements of the shipbuilding and repair services and whether other qualified contractors could meet them within the required timeframe and specifications. Without this information, it's difficult to assess the necessity of bypassing competition.

How will the Cost Plus Award Fee structure be managed to mitigate cost overruns and ensure value for money?

Effective management of a Cost Plus Award Fee contract requires clear performance metrics, rigorous cost tracking, and objective evaluation of award criteria. The Department of the Navy must establish well-defined milestones and quality standards, with award fees tied directly to exceeding these expectations. Regular audits and transparent reporting are essential to ensure taxpayer funds are used efficiently and effectively.

What is the long-term strategic impact of awarding such a significant contract to a single entity for an extended period?

Awarding a large, long-term contract to a single entity can foster specialized expertise and ensure continuity of critical services. However, it also carries risks of reduced innovation, potential vendor lock-in, and diminished bargaining power over time. The government should consider strategies for future competition or contract restructuring to maintain flexibility and encourage ongoing efficiency.

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: N0002419R4453

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

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: $453,360,309

Exercised Options: $443,537,426

Current Obligation: $184,972,321

Actual Outlays: $10,382,202

Subaward Activity

Number of Subawards: 60

Total Subaward Amount: $53,715,012

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline