Electric Boat Corp. awarded $40M contract for ARDM-4 operations and maintenance, with limited competition

Contract Overview

Contract Amount: $39,992,979 ($40.0M)

Contractor: Electric Boat Corporation

Awarding Agency: Department of Defense

Start Date: 2021-06-09

End Date: 2026-04-09

Contract Duration: 1,765 days

Daily Burn Rate: $22.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ARDM-4 OPERATE AND MAINTAIN FY21

Place of Performance

Location: GROTON, NEW LONDON County, CONNECTICUT, 06340

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $40.0 million to ELECTRIC BOAT CORPORATION for work described as: ARDM-4 OPERATE AND MAINTAIN FY21 Key points: 1. Contract value of $39.99M for operations and maintenance services. 2. Sole-source award to Electric Boat Corporation suggests limited market alternatives. 3. Contract duration of 1765 days indicates a long-term need for these services. 4. The 'Ship Building and Repairing' NAICS code points to specialized industrial support. 5. Cost Plus Fixed Fee contract type may incentivize cost control by the contractor. 6. High value and long duration suggest significant program criticality.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details or comparable contracts. However, the $39.99 million award for a nearly five-year period for operations and maintenance of a specialized asset like ARDM-4 (likely a floating dry dock) suggests a substantial investment. The Cost Plus Fixed Fee structure means the government pays the contractor's costs plus a fixed fee, which can lead to cost overruns if not managed carefully. Without more data on the scope of work and historical performance, assessing true value-for-money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Electric Boat Corporation. This indicates that the Department of the Navy determined that only Electric Boat Corporation could provide the necessary services, likely due to specialized knowledge, unique facilities, or proprietary technology related to the ARDM-4. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards limit taxpayer benefit by removing the downward price pressure that competition typically provides. The government may be paying a premium for services that could potentially be obtained at a lower cost through a competitive process.

Public Impact

The primary beneficiary is the Department of the Navy, ensuring the operational readiness of the ARDM-4. Services delivered include operations and maintenance, crucial for supporting naval shipbuilding and repair activities. The geographic impact is likely concentrated in Connecticut, where Electric Boat Corporation is based and operates. Workforce implications include the continued employment of skilled personnel at Electric Boat Corporation for specialized maritime support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Cost Plus Fixed Fee contract type can lead to cost increases if not closely monitored.
Lack of transparency in the justification for sole-source award.
Long contract duration may reduce flexibility to adapt to changing needs or technologies.

Positive Signals

Award to a known contractor (Electric Boat Corporation) with presumed expertise in naval support.
Contract ensures continued operational capability of a critical asset (ARDM-4).
Fixed fee component provides some cost predictability compared to purely cost-reimbursement contracts.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, involving complex engineering, manufacturing, and maintenance services. This contract falls within the broader category of defense industrial support services. Spending in this sector is often characterized by long-term, high-value contracts due to the specialized nature of the assets and the strategic importance of naval capabilities. Comparable spending benchmarks would typically involve other major naval maintenance or construction contracts, which are often awarded through limited or sole-source means due to the unique requirements.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Electric Boat Corporation voluntarily engages them for specific support. The absence of set-asides or explicit subcontracting goals means that opportunities for small businesses within this specific contract's value chain are not being proactively pursued.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Ship Maintenance Contracts
Shipbuilding and Repair Services
Defense Logistics Support
Submarine Maintenance Programs
Fleet Readiness Contracts

Risk Flags

Sole-source award raises concerns about potential lack of competition and higher costs.
Cost Plus Fixed Fee contract type requires diligent oversight to manage costs effectively.
Limited public information on the specific justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.0 million to ELECTRIC BOAT CORPORATION. ARDM-4 OPERATE AND MAINTAIN FY21

Who is the contractor on this award?

The obligated recipient is ELECTRIC BOAT 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 $40.0 million.

What is the period of performance?

Start: 2021-06-09. End: 2026-04-09.

What is the specific function and importance of the ARDM-4 asset being serviced?

The ARDM-4 is a type of Auxiliary Repair Dry Dock Medium, a specialized floating dry dock used by the Navy. These assets are critical for performing maintenance, repair, and overhaul of submarines and other naval vessels, particularly in forward-deployed locations or where permanent shipyard facilities are unavailable or insufficient. Their operational readiness is paramount for maintaining the fleet's availability and capability. The ARDM-4's specific capabilities, such as lifting capacity and dimensions, dictate the types of vessels it can service, making its maintenance a high-priority requirement for the Navy's operational and logistical support infrastructure.

What is the historical spending pattern for ARDM-4 operations and maintenance?

Historical spending data for ARDM-4 operations and maintenance prior to this $39.99 million award is not provided in the current data. However, given the long duration (1765 days, approximately 4.8 years) and the nature of the services (operations and maintenance), it is reasonable to infer that previous contracts for similar services would have existed. The value of this current contract suggests a significant and ongoing investment. Analyzing past contract awards for the ARDM-4 or similar auxiliary repair dry docks would be necessary to establish a trend in spending, identify potential cost escalations, and assess the consistency of the contractor's performance over time.

What are the specific deliverables and performance metrics outlined in the Cost Plus Fixed Fee contract?

The provided data indicates the contract type is Cost Plus Fixed Fee (CPFF), but it does not detail the specific deliverables or performance metrics. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred in performing the contract, plus a fixed fee representing profit. Specific deliverables would typically include detailed operational logs, maintenance reports, repair certifications, and potentially performance against uptime or availability targets for the ARDM-4. Performance metrics might focus on response times for maintenance issues, adherence to safety protocols, and the successful completion of scheduled maintenance or repair tasks. The fixed fee is negotiated upfront and does not change, incentivizing the contractor to manage costs efficiently to maximize their profit margin.

Why was this contract awarded on a sole-source basis to Electric Boat Corporation?

The data indicates this contract was awarded on a sole-source basis ('CT': 'NOT COMPETED'). The justification for a sole-source award typically stems from specific circumstances where only one responsible source can satisfy the agency's needs. For Electric Boat Corporation, this could be due to their unique facilities, specialized technical expertise directly related to the ARDM-4 (perhaps they built or extensively modified it), proprietary information, or the need for immediate service continuity that precludes a lengthy competitive process. The Department of the Navy would have had to formally justify this sole-source determination, often citing regulations like the Federal Acquisition Regulation (FAR) Part 6, which outlines conditions for other than full and open competition.

What is Electric Boat Corporation's track record with similar government contracts?

Electric Boat Corporation is a well-established defense contractor, primarily known for its role in designing, constructing, and maintaining nuclear-powered submarines for the U.S. Navy. Their track record with the government, particularly the Department of Defense and the Department of the Navy, is extensive and spans decades. They have a history of managing large, complex, and technologically advanced projects. While this specific contract focuses on operations and maintenance of a dry dock, it aligns with their core competencies in supporting naval assets and infrastructure. Their performance on previous contracts, including cost control, schedule adherence, and quality of work, would have been a key factor in the Navy's decision to award this sole-source contract.

How does the $39.99 million value compare to other federal spending on ship maintenance and repair?

The $39.99 million value for this contract is substantial for a single award covering operations and maintenance of a specific asset over nearly five years. However, within the broader context of federal spending on ship maintenance and repair, particularly by the Department of Defense, it represents a moderate-sized contract. Major shipbuilding programs, new vessel construction, or extensive fleet-wide maintenance initiatives can run into billions of dollars. Contracts for specialized support equipment like the ARDM-4, while critical, are typically smaller in scale compared to the procurement or overhaul of entire vessels. Benchmarking requires comparing it to other contracts for similar support infrastructure (e.g., other dry docks, specialized repair facilities) rather than comparing it to the cost of building a new ship.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002420R4311

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 75 EASTERN POINT RD, GROTON, CT, 06340

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

Financial Breakdown

Contract Ceiling: $39,992,979

Exercised Options: $39,992,979

Current Obligation: $39,992,979

Actual Outlays: $8,338,437

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $177,768

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline