Navy Awards BAE Systems $130.8M for USS Preble Modernization, Highlighting Ship Repair Sector

Contract Overview

Contract Amount: $130,758,173 ($130.8M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2020-10-05

End Date: 2022-12-15

Contract Duration: 801 days

Daily Burn Rate: $163.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS PREBLE (DDG 88) DEPOT MODERNIZATION PERIOD (DMP).

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92136

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $130.8 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: USS PREBLE (DDG 88) DEPOT MODERNIZATION PERIOD (DMP). Key points: 1. The contract for the USS Preble (DDG 88) Depot Modernization Period (DMP) was awarded to BAE Systems Maritime Solutions. 2. This award falls within the Ship Building and Repairing sector, a critical area for naval readiness. 3. The contract value of $130.8 million represents a significant investment in maintaining naval assets. 4. The use of firm-fixed-price terms suggests an effort to control costs for this modernization project.

Value Assessment

Rating: good

The contract value of $130.8 million for the USS Preble's modernization appears reasonable given the scope of depot modernization for a guided-missile destroyer. Benchmarking against similar complex naval vessel repair and modernization contracts would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. This competitive process is expected to drive price discovery and ensure a fair market price for the services rendered.

Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential naval maintenance and modernization.

Public Impact

Ensures the operational readiness of a key naval asset, the USS Preble (DDG 88). Supports jobs and economic activity within the maritime defense industrial base, particularly in California. Demonstrates the Navy's commitment to maintaining its fleet through comprehensive modernization programs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during modernization.
Dependence on a single contractor for a critical modernization project.

Positive Signals

Awarded through full and open competition.
Firm-fixed-price contract structure provides cost certainty.
Modernization ensures long-term operational capability of the vessel.

Sector Analysis

The Ship Building and Repairing sector is vital for national defense, involving complex and costly maintenance and upgrades for naval vessels. Spending in this sector is benchmarked by the significant investments required for maintaining a technologically advanced fleet.

Small Business Impact

While BAE Systems is a large prime contractor, the subcontracting opportunities for small businesses within this large award are not specified. The Navy often encourages prime contractors to utilize small businesses for various components and services.

Oversight & Accountability

The Department of the Navy's contracting process, including full and open competition and firm-fixed-price terms, provides a framework for oversight. However, ongoing monitoring of performance and costs throughout the modernization period is crucial for accountability.

Related Government Programs

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

Risk Flags

Potential for scope creep if additional modernization needs are identified.
Dependency on BAE Systems for successful execution and timely delivery.
Risk of schedule delays impacting fleet readiness.
Ensuring effective subcontracting to small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $130.8 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. USS PREBLE (DDG 88) DEPOT MODERNIZATION PERIOD (DMP).

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO 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 $130.8 million.

What is the period of performance?

Start: 2020-10-05. End: 2022-12-15.

What specific modernization upgrades are included in this contract, and how do they enhance the USS Preble's capabilities?

The contract details the Depot Modernization Period (DMP) for the USS Preble (DDG 88). While specific upgrade lists are often proprietary, DMP typically includes extensive overhauls, system upgrades (e.g., combat systems, propulsion, electronics), structural repairs, and habitability improvements. These aim to extend the ship's service life, improve its combat effectiveness, and ensure compliance with current technological standards and operational requirements.

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

The primary risk with firm-fixed-price contracts in complex projects like vessel modernization is that the contractor may face unforeseen challenges (e.g., discovery of hidden structural damage, integration issues with new systems) that increase costs beyond the fixed price. If the contractor cannot absorb these extra costs, it could lead to disputes, delays, or potentially impact the quality of work if corners are cut to maintain profitability.

How does this modernization contribute to the overall effectiveness and readiness of the U.S. Navy's fleet?

Modernizing vessels like the USS Preble is crucial for maintaining the U.S. Navy's global presence and operational effectiveness. It ensures that aging platforms are updated with current technology, improving their combat capabilities, survivability, and reliability. This investment prevents obsolescence, reduces the likelihood of costly emergent repairs, and ensures the fleet remains a credible deterrent and power projection force.

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: N0002420R4400

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Compagnie DE Developpement DE L'eau S.A.

Address: 2205 E BELT ST, FOOT OF SAMPSON ST, SAN DIEGO, CA, 92113

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $135,214,322

Exercised Options: $130,758,173

Current Obligation: $130,758,173

Actual Outlays: $31,405,936

Subaward Activity

Number of Subawards: 141

Total Subaward Amount: $32,740,470

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline