DoD's $62M FY21 SRA for USS Russell awarded to BAE Systems, raising questions on value and competition
Contract Overview
Contract Amount: $62,112,691 ($62.1M)
Contractor: BAE Systems Maritime Solutions SAN Diego Inc.
Awarding Agency: Department of Defense
Start Date: 2021-07-26
End Date: 2022-12-16
Contract Duration: 508 days
Daily Burn Rate: $122.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: USS RUSSELL (DDG 59) FY21 SELECTED RESTRICTED AVAILABILITY (SRA)
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92113
Plain-Language Summary
Department of Defense obligated $62.1 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: USS RUSSELL (DDG 59) FY21 SELECTED RESTRICTED AVAILABILITY (SRA) Key points: 1. The contract value of $62.1M for a Selected Restricted Availability (SRA) on a DDG 59 is substantial. 2. BAE Systems Maritime Solutions is the sole awardee, indicating potential limitations in competition. 3. The firm-fixed-price contract type aims to control costs, but the overall value proposition needs scrutiny. 4. Shipbuilding and Repair (336611) is a critical sector for naval readiness, but often faces cost overruns.
Value Assessment
Rating: questionable
The $62.1M price for a Selected Restricted Availability (SRA) on a DDG 59 requires benchmarking against similar maintenance availabilities for Arleigh Burke-class destroyers. Without comparative data, assessing if this price represents good value is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although listed as 'FULL AND OPEN COMPETITION', the award went to a single entity, BAE Systems. This suggests either a highly specialized capability or potential issues in the solicitation process that may have limited broader participation and price discovery.
Taxpayer Impact: The significant expenditure on a single vessel's maintenance impacts the overall defense budget. Ensuring competitive pricing is crucial to maximize taxpayer value and fund other critical readiness initiatives.
Public Impact
Naval readiness and fleet modernization are directly impacted by the timely and cost-effective maintenance of vessels like the USS Russell. The award to BAE Systems highlights the concentration of specialized shipbuilding and repair capabilities within a few key contractors. Taxpayers are funding extensive maintenance and repair work on naval assets, necessitating transparency and accountability in contract execution.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition despite 'full and open' designation
- High contract value for a single vessel availability
- Potential for cost overruns in complex ship repair
Positive Signals
- Firm-fixed-price contract type to manage costs
- Awarded to a known, experienced maritime solutions provider
Sector Analysis
The shipbuilding and repair sector (NAICS 336611) is vital for national defense, supporting the maintenance and modernization of the U.S. Navy's fleet. Spending in this sector is often characterized by large, complex contracts with significant cost risks.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses for this contract. The nature of major ship repair often favors large, established prime contractors, potentially limiting small business subcontracting opportunities.
Oversight & Accountability
Oversight of this contract would involve monitoring BAE Systems' performance against the SRA requirements, ensuring adherence to the firm-fixed-price terms, and verifying the quality of repairs. The Department of the Navy's contracting officers are responsible for this oversight.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for cost overruns despite firm-fixed-price
- Lack of clear competitive landscape
- Dependence on a single contractor for critical maintenance
- Complexity of ship repair leading to unforeseen issues
Tags
ship-building-and-repairing, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $62.1 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. USS RUSSELL (DDG 59) FY21 SELECTED RESTRICTED AVAILABILITY (SRA)
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 $62.1 million.
What is the period of performance?
Start: 2021-07-26. End: 2022-12-16.
What specific factors led to the 'full and open competition' designation if only one bid was seemingly successful?
The 'full and open competition' designation typically means the solicitation was advertised broadly, allowing any responsible source to submit an offer. However, the outcome of a single award could be due to various reasons: other bids not meeting technical requirements, proposals being too high in price, or the awarded contractor possessing unique, essential capabilities that others lacked. Further investigation into the solicitation details and evaluation process would clarify this.
How does the $62.1M cost compare to previous SRAs on similar vessels, and what is the projected impact on the USS Russell's operational readiness?
Benchmarking this $62.1M cost against prior SRAs for Arleigh Burke-class destroyers is crucial for value assessment. Without this data, it's difficult to determine if the price is competitive. The timely completion of this availability is critical for restoring and enhancing the USS Russell's combat systems and overall operational readiness, ensuring its contribution to fleet missions.
What are the key performance indicators (KPIs) being tracked to ensure the effectiveness and efficiency of this maintenance availability?
Effective oversight would involve tracking KPIs such as on-time completion of milestones, adherence to the approved work scope, quality of repairs (e.g., defect rates), and final cost against the firm-fixed-price. Measuring the post-availability performance of repaired systems and the vessel's overall operational readiness metrics would also indicate the effectiveness of the SRA.
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: N0002421R4455
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BAE Systems PLC
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: $66,808,238
Exercised Options: $62,112,691
Current Obligation: $62,112,691
Actual Outlays: $42,337,689
Subaward Activity
Number of Subawards: 73
Total Subaward Amount: $12,751,192
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-07-26
Current End Date: 2022-12-16
Potential End Date: 2022-12-16 00:00:00
Last Modified: 2023-03-31
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