Navy awards $103.7M for USS Harpers Ferry maintenance, highlighting shipbuilding sector activity

Contract Overview

Contract Amount: $103,682,158 ($103.7M)

Contractor: National Steel and Shipbuilding Company

Awarding Agency: Department of Defense

Start Date: 2019-12-26

End Date: 2021-08-20

Contract Duration: 603 days

Daily Burn Rate: $171.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS HARPERS FERRY DOCKED PHASED MAINTENANCE AVAILABILITY (DPMA)

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92113

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $103.7 million to NATIONAL STEEL AND SHIPBUILDING COMPANY for work described as: USS HARPERS FERRY DOCKED PHASED MAINTENANCE AVAILABILITY (DPMA) Key points: 1. Contract value represents a significant investment in naval readiness and ship sustainment. 2. The award reflects ongoing demand for specialized shipbuilding and repair services. 3. Competition dynamics for this contract will be assessed for price discovery and value. 4. Performance risk is considered in the context of complex naval vessel maintenance. 5. This contract positions the awardee within the critical defense industrial base. 6. The duration of the contract suggests a substantial scope of work.

Value Assessment

Rating: good

The contract value of $103.7 million for the USS Harpers Ferry's Phased Maintenance Availability (DPMA) appears reasonable given the complexity of naval ship maintenance. Benchmarking against similar maintenance availabilities for amphibious assault ships or other large naval vessels would provide a more precise value-for-money assessment. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can incentivize efficiency. Without specific cost breakdowns or comparisons to historical maintenance costs for this class of vessel, a definitive value assessment is challenging, but the award seems aligned with industry expectations for such specialized work.

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 four bidders suggests a healthy level of competition for this significant naval maintenance contract. A competitive environment generally leads to better price discovery and can drive down costs for the government, as contractors vie for the award by offering competitive pricing and technical solutions. The specific number of bids received (4) provides a reasonable basis for comparison against industry norms for similar large-scale maintenance contracts.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically results in more competitive pricing and a wider range of technical solutions, ultimately leading to better value for the government's investment.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the USS Harpers Ferry is maintained to high standards. The contract delivers essential maintenance and repair services to a key naval asset. The geographic impact is concentrated in California, where the work is likely to be performed, supporting the regional maritime industrial base. Workforce implications include employment for skilled tradespeople, engineers, and support staff within the shipbuilding and repair sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays in complex ship maintenance projects.
Ensuring adherence to stringent naval quality and safety standards.
Managing the scope of work effectively within a firm-fixed-price contract.

Positive Signals

Award to National Steel and Shipbuilding Company, a known entity in naval maintenance.
Firm-fixed-price contract structure aligns incentives for cost control.
Full and open competition suggests a robust bidding process.
Contract duration indicates a comprehensive approach to maintenance needs.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, supporting naval fleet readiness. This contract falls within the Ship Building and Repairing industry (NAICS 336611). The market for naval vessel maintenance is characterized by specialized capabilities, high barriers to entry, and significant government investment. Comparable spending benchmarks would involve analyzing other maintenance availabilities for similar classes of naval vessels, such as amphibious assault ships or destroyers, to gauge the relative cost and scope of this contract.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a large shipbuilding and repair company suggests that the primary contractor is likely a major player in the industry. The impact on the small business ecosystem would depend on whether the prime contractor utilizes small businesses for specialized support services or supplies, which is not detailed here. Further investigation into subcontracting plans would be needed to assess the full impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract type, which places cost risk on the contractor. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract execution.

Related Government Programs

Naval Ship Maintenance Contracts
Amphibious Assault Ship Maintenance
Shipbuilding and Repair Services
Defense Readiness Contracts

Risk Flags

Potential for schedule slippage due to complexity of naval maintenance.
Risk of unforeseen repair requirements in aging vessel.
Ensuring compliance with stringent naval quality and safety standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.7 million to NATIONAL STEEL AND SHIPBUILDING COMPANY. USS HARPERS FERRY DOCKED PHASED MAINTENANCE AVAILABILITY (DPMA)

Who is the contractor on this award?

The obligated recipient is NATIONAL STEEL AND SHIPBUILDING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $103.7 million.

What is the period of performance?

Start: 2019-12-26. End: 2021-08-20.

What is the historical spending pattern for USS Harpers Ferry maintenance availabilities?

Analyzing historical spending for the USS Harpers Ferry's maintenance availabilities would provide crucial context for the current $103.7 million award. Without access to specific historical data for this vessel, it's difficult to determine if this contract represents an increase, decrease, or stable level of investment. Generally, maintenance costs for naval vessels can fluctuate based on the ship's age, the complexity of required repairs, and the specific type of maintenance availability (e.g., routine vs. major overhaul). Comparing this award to previous availabilities for the Harpers Ferry, or similar ships in its class, would help assess if the current investment is in line with historical trends or if there are significant deviations that warrant further investigation into the scope or pricing.

How does the number of bidders (4) compare to similar naval maintenance contracts?

A competition with four bidders for a contract valued at over $100 million for naval maintenance is generally considered healthy. In specialized sectors like shipbuilding and repair, the number of capable bidders can be limited due to the technical expertise, facilities, and security clearances required. For contracts of this magnitude and complexity, receiving four competitive bids suggests that the solicitation was well-publicized and that multiple firms possessed the necessary qualifications. If similar large-scale naval maintenance contracts typically see fewer than three bidders, then four indicates a more robust competitive landscape for this specific requirement. Conversely, if comparable contracts often attract six or more bidders, then four might suggest a slightly less competitive environment, potentially impacting price discovery.

What are the key performance indicators (KPIs) expected under this contract?

While specific Key Performance Indicators (KPIs) are not detailed in the provided data, typical KPIs for a Phased Maintenance Availability (DPMA) contract for a naval vessel like the USS Harpers Ferry would focus on schedule adherence, quality of work, and cost control. Performance would likely be measured against a baseline schedule, with penalties or incentives tied to timely completion. Quality would be assessed through inspections, testing, and verification of repairs against naval specifications and standards. Cost control is inherent in the firm-fixed-price structure, but the government would monitor for any potential scope creep or change orders that could increase the overall cost. Meeting operational readiness requirements and ensuring the vessel's systems function as intended post-maintenance are overarching performance goals.

What is the track record of National Steel and Shipbuilding Company with the Department of the Navy?

National Steel and Shipbuilding Company (NASSCO) has a significant and established track record with the Department of the Navy, particularly in shipbuilding and complex repair work. As a major shipyard, NASSCO has historically been awarded numerous contracts for new construction, conversions, and maintenance availabilities of various naval vessels, including cruisers, destroyers, and amphibious ships. Their experience likely includes managing large-scale projects, adhering to stringent naval specifications, and delivering vessels back to the fleet on schedule and within budget. The Navy's decision to award this substantial maintenance contract to NASSCO suggests confidence in their capabilities, past performance, and capacity to execute the required work effectively. A review of NASSCO's contract history with the Navy would reveal the types and values of previous awards and their performance outcomes.

Are there any specific risks associated with maintaining an older vessel like the USS Harpers Ferry?

Maintaining an older vessel like the USS Harpers Ferry (an Austin-class amphibious transport dock commissioned in 1985) inherently carries specific risks. As ships age, components become obsolete, spare parts may be difficult to source, and unexpected structural or system issues can arise during maintenance, potentially leading to cost overruns or schedule delays. The complexity of integrating modern upgrades with legacy systems can also present challenges. Furthermore, the cumulative wear and tear may mean that repairs are more extensive than initially anticipated. The firm-fixed-price nature of this contract places the burden of managing these risks on the contractor, National Steel and Shipbuilding Company. However, the Navy must ensure thorough initial assessments and contingency planning to mitigate the impact of unforeseen issues on readiness and budget.

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: N0002419R4454

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 2798 E HARBOR DR, 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: $110,871,941

Exercised Options: $103,682,158

Current Obligation: $103,682,158

Actual Outlays: $27,759,405

Subaward Activity

Number of Subawards: 91

Total Subaward Amount: $11,206,277

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline