Navy awards $29.8M for Iraq vessel maintenance, VSE Corp. to perform services

Contract Overview

Contract Amount: $29,775,558 ($29.8M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2020-05-01

End Date: 2022-01-31

Contract Duration: 640 days

Daily Burn Rate: $46.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IRAQ VESSEL MAINTENANCE AND REPAIR (VMR) PROGRAM FOR FMS CASES IQ-P-GAO AND IQ-P-GAR

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.8 million to VSE CORPORATION for work described as: IRAQ VESSEL MAINTENANCE AND REPAIR (VMR) PROGRAM FOR FMS CASES IQ-P-GAO AND IQ-P-GAR Key points: 1. Contract value represents a significant investment in maintaining critical maritime assets for foreign military sales. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. Performance period spans over a year, indicating a sustained need for vessel repair and maintenance. 4. The fixed-price contract type aims to control costs and provide predictability for the government. 5. This award falls within the shipbuilding and repairing sector, crucial for naval readiness.

Value Assessment

Rating: good

The total award of $29.8 million for vessel maintenance and repair appears reasonable given the scope and duration of the contract. Benchmarking against similar Foreign Military Sales (FMS) support contracts is challenging due to the specialized nature of FMS requirements and the specific operational environments. However, the contract's fixed-price nature suggests an effort to manage costs effectively. The award amount should be assessed in the context of the specific vessels supported and the complexity of the required maintenance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters price discovery and encourages competitive pricing. The open competition suggests that the Department of the Navy sought the best value from a range of qualified contractors.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically leads to more competitive pricing and a wider selection of qualified vendors, ultimately aiming for better value for public funds.

Public Impact

The primary beneficiaries are the Iraqi Navy, receiving enhanced operational readiness through well-maintained vessels. Services delivered include essential maintenance and repair for vessels under Foreign Military Sales cases. The geographic impact is focused on supporting Iraqi maritime security operations. Workforce implications may include specialized technical personnel for vessel repair and maintenance, potentially both U.S. and local hires depending on the execution plan.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise beyond the scope of the fixed-price contract.
Dependence on contractor's technical expertise and timely execution for operational readiness of Iraqi vessels.
Geopolitical risks associated with operating in or supporting a region like Iraq could impact performance.
Ensuring effective quality control and oversight for maintenance performed under FMS agreements.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process.
Fixed-price contract type provides cost certainty for the government.
VSE Corporation has a track record in defense contracting, potentially bringing relevant experience.
Contract supports critical FMS objectives, contributing to regional security and partner capacity building.

Sector Analysis

The shipbuilding and repairing sector (NAICS 336611) is a vital component of the defense industrial base, supporting naval operations and readiness. This contract fits within the broader category of defense logistics and support services, specifically tailored for foreign military sales. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of FMS requirements and the specific operational contexts, but significant investments are common for maintaining naval fleets, especially in support of allied nations.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses are unlikely to be direct prime contractors on this award. However, VSE Corporation may engage small businesses as subcontractors for specialized services or supplies, contributing to the broader small business ecosystem within the defense contracting supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy, potentially through contracting officers and technical representatives. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases, though specific performance details may be limited. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales (FMS) Program
Naval Vessel Maintenance and Repair
Department of Defense Logistics Support
Maritime Security Operations Support

Risk Flags

Potential for scope creep
Geopolitical instability in the region
Contractor performance risk
Quality assurance challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.8 million to VSE CORPORATION. IRAQ VESSEL MAINTENANCE AND REPAIR (VMR) PROGRAM FOR FMS CASES IQ-P-GAO AND IQ-P-GAR

Who is the contractor on this award?

The obligated recipient is VSE CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.8 million.

What is the period of performance?

Start: 2020-05-01. End: 2022-01-31.

What is VSE Corporation's track record with similar vessel maintenance contracts, particularly for FMS cases?

VSE Corporation has a significant history of providing services to the Department of Defense, including maintenance, repair, and logistics support for various naval platforms. While specific details on their performance for FMS cases related to Iraqi vessels are not publicly detailed in this award notice, the company's extensive experience in ship repair and modernization suggests a capacity to handle such requirements. Analyzing their past performance on similar contracts, including any reported issues or successes, would provide further insight into their reliability and expertise in executing this specific award. Government contract databases and performance reports would be the primary sources for a comprehensive assessment of their track record.

How does the value of this contract compare to other vessel maintenance contracts awarded by the Navy or DoD?

The $29.8 million award for the Iraq Vessel Maintenance and Repair (VMR) Program is a substantial sum, reflecting the scope and duration of services required. Comparing it directly to other vessel maintenance contracts requires careful consideration of contract type, vessel class, geographic location, and the specific services included (e.g., routine maintenance vs. major overhauls). Larger naval maintenance contracts can range from tens of millions to hundreds of millions of dollars. This particular contract's value appears aligned with significant, multi-year support agreements for specialized FMS requirements, rather than routine, smaller-scale repairs. Benchmarking would ideally involve contracts for similar FMS programs or support for comparable naval assets.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential cost overruns if unforeseen maintenance issues arise, delays in service delivery impacting Iraqi naval readiness, and geopolitical instability in the operating region. Mitigation strategies likely involve the firm-fixed-price contract structure, which shifts some cost risk to the contractor. The Department of the Navy's oversight, including technical representatives and quality assurance personnel, aims to ensure timely and effective service delivery. VSE Corporation's experience and established processes are also risk mitigation factors. Furthermore, contingency planning for operational disruptions and robust communication channels with the Iraqi partners are crucial for managing geopolitical risks.

How effective is the firm-fixed-price contract type in ensuring value for money for this specific service?

The firm-fixed-price (FFP) contract type is generally considered effective for ensuring value for money when the scope of work is well-defined and the risks are manageable. For vessel maintenance and repair, FFP incentivizes the contractor to control costs and improve efficiency to maximize profit. This structure provides cost certainty for the government, as the price is fixed regardless of the contractor's actual costs. However, if unforeseen technical issues or scope changes arise, the FFP structure can sometimes lead to change orders or disputes if not managed carefully. The effectiveness hinges on the thoroughness of the initial SOW and the government's ability to manage contract performance and prevent scope creep.

What is the historical spending pattern for vessel maintenance and repair under FMS cases managed by the Department of the Navy?

Historical spending on vessel maintenance and repair under FMS cases managed by the Department of the Navy is substantial and varies significantly year-to-year based on the needs of partner nations, the types of vessels involved, and the specific support agreements in place. These programs are critical for maintaining the operational readiness of allied forces and often involve multi-year commitments. Spending can fluctuate based on major maintenance cycles, upgrades, or the introduction of new platforms. Analyzing aggregate FMS support spending data over several fiscal years would reveal trends, identify major recipients of such services, and highlight the consistent requirement for robust maintenance programs to sustain partner capabilities.

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: N0002410R4204

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6348 WALKER LANE, ALEXANDRIA, VA, 22310

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

Financial Breakdown

Contract Ceiling: $29,775,558

Exercised Options: $29,775,558

Current Obligation: $29,775,558

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002411D4229

IDV Type: IDC

Timeline