Navy awards $97.7M contract for USS STOUT (DDG-55) dry-docking and repairs to BAE Systems

Contract Overview

Contract Amount: $97,723,419 ($97.7M)

Contractor: BAE Systems Maritime Solutions Norfolk Inc.

Awarding Agency: Department of Defense

Start Date: 2020-11-16

End Date: 2022-07-01

Contract Duration: 592 days

Daily Burn Rate: $165.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS STOUT (DDG-55) FY21 DRY-DOCKING SELECTED RESTRICTED AVAILABILITY (DSRA)

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $97.7 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. for work described as: USS STOUT (DDG-55) FY21 DRY-DOCKING SELECTED RESTRICTED AVAILABILITY (DSRA) Key points: 1. Contract awarded for essential maintenance to ensure operational readiness of a key naval asset. 2. BAE Systems, a major defense contractor, secured this award through full and open competition. 3. The contract duration of 592 days indicates a comprehensive scope of work. 4. Fixed-price contract type aims to control costs and provide predictability. 5. This award falls within the Ship Building and Repairing sector, crucial for naval fleet maintenance. 6. The award value is substantial, reflecting the complexity of modern naval vessel upkeep.

Value Assessment

Rating: good

The contract value of $97.7 million for a DDG-55 dry-docking and selected restricted availability appears reasonable given the scope and complexity of modern naval ship maintenance. While specific benchmark data for this exact class of vessel and repair type is not publicly detailed, similar complex availabilities for destroyers can range from tens to hundreds of millions of dollars. The firm fixed-price structure suggests an effort to manage costs effectively, though the final cost will depend on the execution of the defined scope. Further analysis would require comparison with recent, similar availabilities for DDG-class ships.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, indicating that multiple capable bidders were solicited and considered. The presence of two bids suggests a competitive environment, which generally benefits price discovery and can lead to more favorable terms for the government. The specific details of the bidding process, including the number of proposals received and the evaluation criteria, are not fully detailed in the provided data, but the 'full and open' designation is a positive indicator of market engagement.

Taxpayer Impact: Full and open competition increases the likelihood that the government receives competitive pricing, potentially saving taxpayer dollars compared to sole-source or limited competition awards. It ensures a broader pool of qualified contractors can bid, fostering a more efficient marketplace.

Public Impact

The primary beneficiaries are the U.S. Navy and national security, through the maintenance of a critical warship. The services delivered include essential dry-docking, repairs, and maintenance to ensure the USS STOUT's operational readiness. The geographic impact is primarily centered around the contractor's facility in Norfolk, Virginia, a major naval hub. This contract supports skilled labor within the maritime repair and shipbuilding industry, likely in the Norfolk area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extensive repair work.
Dependence on a single contractor for a critical maintenance period could pose scheduling risks if performance issues emerge.

Positive Signals

Firm fixed-price contract type helps to cap costs and provides budget certainty.
Award to an established defense contractor with experience in naval ship repair suggests a higher likelihood of successful execution.
Full and open competition indicates a robust bidding process, potentially leading to better value.

Sector Analysis

The Ship Building and Repairing sector is a vital component of the defense industrial base, supporting the maintenance, modernization, and construction of naval vessels. This contract represents a significant investment within this sector, focusing on the upkeep of a guided-missile destroyer (DDG). The market for naval ship repair is specialized, with a limited number of large shipyards possessing the necessary infrastructure and expertise to handle complex availabilities for capital ships. Spending in this area is driven by fleet readiness requirements and the lifecycle of naval assets.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside criterion for this contract (ss: false, sb: false). While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on BAE Systems' procurement practices and the specific needs of the repair work. Further investigation into BAE's subcontracting plan would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The firm fixed-price nature of the contract provides a degree of cost control. Accountability measures are inherent in the contract terms, requiring delivery of specified services within the agreed timeframe and budget. Transparency is facilitated by the public nature of contract awards, though detailed performance metrics and specific oversight activities are typically internal to the agency.

Related Government Programs

Naval Ship Maintenance Contracts
Ship Building and Repairing Services
Defense Readiness Contracts
DDG Class Ship Maintenance
Dry-Docking Services

Risk Flags

Potential for scope creep due to unforeseen repair needs.
Schedule adherence is critical for fleet readiness.
Complexity of modern naval systems requires specialized expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.7 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC.. USS STOUT (DDG-55) FY21 DRY-DOCKING SELECTED RESTRICTED AVAILABILITY (DSRA)

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS NORFOLK 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 $97.7 million.

What is the period of performance?

Start: 2020-11-16. End: 2022-07-01.

What is the track record of BAE Systems Maritime Solutions in performing similar naval ship repair contracts?

BAE Systems Maritime Solutions is a well-established entity with extensive experience in naval shipbuilding and repair. They are a significant contractor for the U.S. Navy, frequently involved in complex availabilities, overhauls, and modernization programs for various classes of naval vessels, including destroyers. Their track record generally includes successful completion of major maintenance periods, though like any large contractor, specific project performance can vary. Publicly available data often highlights their capabilities in areas such as dry-docking, hull repair, systems integration, and modernization. The Navy's continued awarding of substantial contracts to BAE Systems suggests a generally positive assessment of their past performance and capabilities in meeting fleet readiness requirements.

How does the awarded value of $97.7 million compare to similar DDG-55 availabilities or other DDG class repairs?

Direct comparisons for the exact 'Selected Restricted Availability' (SRA) for a DDG-55 are difficult without access to proprietary Navy cost data or detailed historical contract databases. However, major availabilities for Arleigh Burke-class destroyers (DDG-51 class) can range significantly. Routine maintenance and upgrades can fall into the tens of millions, while more comprehensive overhauls or modernization efforts can easily exceed $100 million, sometimes reaching into the hundreds of millions for complex upgrades. The $97.7 million figure for this DSRA appears to be within the expected range for a substantial maintenance and repair period for a guided-missile destroyer, reflecting the complexity of the systems and the scope of work involved in ensuring operational readiness.

What are the primary risk indicators associated with this type of naval repair contract?

Key risk indicators for this type of naval repair contract include the potential for unforeseen structural or system issues discovered during the dry-docking and repair process, which can lead to scope creep and cost overruns, despite the firm fixed-price structure. Schedule delays are another significant risk, as extended downtimes impact fleet readiness. Technical risks involve the complexity of integrating new systems or repairing aging components. Furthermore, the availability of specialized labor and materials can pose risks. The contractor's performance history and the thoroughness of the initial inspection and planning phases are critical in mitigating these risks.

How effective is the firm fixed-price contract type in managing costs for complex ship repairs?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs in situations where the scope of work is well-defined and risks can be reasonably assessed beforehand. For complex ship repairs, FFP provides budget certainty for the government, as the contractor assumes most of the risk for cost overruns. However, if significant unforeseen issues arise that were not reasonably foreseeable during the bidding process, contract modifications or change orders may be necessary, potentially increasing the final cost. The success of FFP in this context relies heavily on the accuracy of the initial technical specifications and the contractor's ability to accurately estimate costs for the defined scope.

What is the historical spending pattern for USS STOUT (DDG-55) maintenance and repair?

Analyzing historical spending for USS STOUT (DDG-55) requires access to detailed contract databases. However, as a DDG-51 class destroyer, it would undergo periodic availabilities (like this DSRA) approximately every 2-3 years. These availabilities typically involve dry-docking, hull maintenance, propulsion system checks, weapons system servicing, and electronic systems upgrades. Spending for such periods can vary widely based on the scope, but cumulatively, maintenance and repair costs over a ship's multi-decade lifespan represent a substantial portion of its total ownership cost. Without specific historical data for DDG-55, it's reasonable to assume consistent, significant investments are made throughout its operational life to maintain readiness.

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: N0002420R4440

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC

Address: 750 W BERKLEY AVE, NORFOLK, VA, 23523

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: $106,185,893

Exercised Options: $97,723,419

Current Obligation: $97,723,419

Actual Outlays: $66,180,268

Subaward Activity

Number of Subawards: 129

Total Subaward Amount: $39,011,833

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline