Navy Awards $305.6 Million for DDG 1002 Destroyer Shore Support to Huntington Ingalls

Contract Overview

Contract Amount: $305,551,639 ($305.6M)

Contractor: Huntington Ingalls Incorporated

Awarding Agency: Department of Defense

Start Date: 2022-01-13

End Date: 2027-04-14

Sector: Defense

Official Description: DDG 1002 SHORE SUPPORT

Plain-Language Summary

This federal contract, valued at $305.6 million, is for DDG 1002 Shore Support, awarded to Huntington Ingalls Incorporated by the Department of the Navy. The contract covers a period from January 13, 2022, to April 14, 2027. The primary purpose of this contract is to provide essential shore-based support services for the DDG 1002, which is a guided-missile destroyer. This support likely includes maintenance, repair, logistics, training, and potentially technical services required to keep the vessel operational and mission-ready when it is not at sea. Such support is critical for maintaining the readiness of the U.S. Navy's fleet, ensuring that these advanced warships can be deployed effectively for national defense and security operations. Huntington Ingalls Industries (HII), now known as Huntington Ingalls Incorporated, is a major American shipbuilding company and a primary contractor for the U.S. Navy. They are responsible for building and servicing many of the Navy's most advanced vessels, including aircraft carriers and destroyers. Their extensive experience and specialized facilities make them a qualified provider for complex naval support requirements. The contract amount of $305.6 million over approximately five years suggests an annual expenditure of roughly $61 million. While specific industry benchmarks for naval ship support are proprietary and complex, this figure appears to be within a reasonable range for the extensive and specialized services required for a modern guided-missile destroyer. The complexity of the vessel, the specialized labor, and the long-term nature of the support contribute to the overall cost. The competition type is not specified, which means it's unclear if this contract was awarded through a competitive bidding process or directly to Huntington Ingalls. If it was sole-source, it could mean that only HII possesses the unique capabilities or intellectual property necessary for this specific support, but it also raises questions about whether taxpayers received the best possible price. If it was competitive, the number of bidders would indicate the level of market competition. This contract is part of the broader U.S. Navy shipbuilding and fleet readiness programs. The DDG 1002 is part of the Arleigh Burke-class destroyer program, a cornerstone of the Navy's surface fleet. Ensuring these ships receive comprehensive shore support is vital for maintaining the Navy's global presence and projecting power. This spending directly contributes to national security by ensuring the operational capability of a key naval asset.

Value Assessment

Rating: good

The contract amount of $305.6 million over approximately five years, averaging around $61 million annually, appears reasonable for the specialized and extensive shore support required for a modern guided-missile destroyer. This includes complex maintenance, repair, logistics, and technical services. Given Huntington Ingalls' role as a primary builder of these vessels, their established infrastructure and expertise likely justify this investment for ensuring fleet readiness.

Cost Per Unit: Not applicable as the contract covers a broad range of services rather than discrete units.

Competition Analysis

Competition Level: unknown

The competition type is not specified, making it impossible to determine if this contract was awarded through a full and open competition or through a limited or sole-source process. If it was sole-source, it could indicate that Huntington Ingalls is the only entity with the necessary specialized knowledge or facilities to support the DDG 1002, which is common for highly complex, proprietary systems. However, a lack of competition can sometimes lead to higher costs for taxpayers.

Taxpayer Impact: The lack of specified competition means it's unclear if taxpayers received the best possible value. A competitive process typically drives down prices and encourages innovation, whereas a sole-source award relies on the agency's negotiation skills and the contractor's pricing integrity.

Public Impact

This contract directly impacts national security and defense readiness. The DDG 1002 is a guided-missile destroyer, a critical asset for the U.S. Navy's ability to project power, deter adversaries, and respond to global crises. By ensuring this vessel receives comprehensive shore support—including maintenance, repairs, and logistical services—the contract helps maintain its operational capability. This means the Navy can effectively deploy the DDG 1002 for missions such as protecting sea lanes, conducting surveillance, and participating in joint military operations. For ordinary citizens, this translates to a more secure environment, as a well-maintained fleet contributes to deterrence and stability. The spending also supports jobs within Huntington Ingalls and its supply chain, indirectly benefiting local economies where these facilities are located. Ultimately, this investment in naval infrastructure is an investment in the nation's defense posture and the safety of its citizens.

Waste & Efficiency Indicators

Waste Risk Score: 30 / 10

Positive Signals

long-term contract duration can indicate stable planning and predictable support needs
contractor is a primary builder of the vessel, suggesting deep expertise

Sector Analysis

This contract falls within the Defense sector, specifically naval shipbuilding and support. The Department of the Navy's budget is substantial, with a significant portion allocated to shipbuilding, modernization, and fleet readiness. Spending in this area is generally consistent, driven by the need to maintain a technologically advanced and globally capable fleet. While specific percentages fluctuate annually based on shipbuilding schedules and strategic priorities, naval support contracts like this are a perennial and essential component of the defense budget.

Small Business Impact

There is no explicit indication in the provided details that this contract includes small business set-asides or specific subcontracting requirements for small businesses. However, large prime contractors like Huntington Ingalls are often required by federal regulations to have small business subcontracting plans, which could indirectly benefit small businesses within their supply chain.

Oversight & Accountability

The Department of the Navy, as the awarding agency, is responsible for overseeing this contract. Performance will likely be monitored through contract officers and technical representatives who ensure that Huntington Ingalls meets the specified requirements for shore support. Underperformance could lead to contractual remedies, including financial penalties or termination, depending on the severity of the breach.

Related Government Programs

Arleigh Burke-class Destroyer Program
Naval Shipyard Modernization Initiatives
Fleet Readiness and Maintenance Programs
U.S. Navy Shipbuilding Budget

Frequently Asked Questions

What is this federal contract actually paying for?

This $305.6 million contract is for 'DDG 1002 SHORE SUPPORT,' meaning it covers the essential services needed to maintain and operate the guided-missile destroyer DDG 1002 when it is not at sea. This includes a wide range of activities such as routine maintenance, complex repairs, logistical support (like spare parts and supplies), technical assistance, and potentially crew training related to the ship's systems. The goal is to ensure the vessel remains fully operational, mission-ready, and safe throughout its service life, which is critical for the U.S. Navy's defense capabilities.

Is this a good use of taxpayer money?

Based on the information available, it appears to be a reasonable use of taxpayer money. The contract supports a critical naval asset, the DDG 1002 destroyer, and is awarded to Huntington Ingalls, a company with extensive experience in building and servicing these vessels. The amount, while substantial, seems aligned with the complex and long-term nature of naval ship support. However, the lack of specified competition means it's harder to definitively confirm if the best possible price was achieved.

Why was this contractor chosen?

Huntington Ingalls Incorporated was likely chosen due to its established role as a primary builder of U.S. Navy destroyers, including the DDG 1002. This deep familiarity with the vessel's design, construction, and systems, coupled with their specialized facilities and workforce, makes them a logical and qualified choice for providing comprehensive shore support. Without knowing the competition type, it's possible they were the sole source or a preferred provider due to unique expertise.

How does this contract amount compare to similar ones?

Comparing this $305.6 million contract for five years of shore support for a single destroyer is challenging without access to proprietary data on similar contracts. However, annual costs of $60-70 million for maintaining a complex warship are generally within the expected range for specialized naval support, considering the advanced technology, skilled labor, and extensive logistics involved. The cost reflects the lifecycle support needs of a modern, high-value military asset.

Could this money have been spent more effectively?

It's difficult to say definitively without more information. If the contract was awarded through a competitive process, it suggests efforts were made to secure the best value. However, if it was a sole-source award, there's a possibility that alternative providers or more cost-effective support strategies might exist, though perhaps not with the same level of specialized expertise. Exploring options for shared support services across similar vessels or leveraging advanced predictive maintenance technologies could potentially offer future efficiencies.

Who benefits from this contract beyond the contractor?

Beyond Huntington Ingalls, the primary beneficiaries are the U.S. Navy and, by extension, the American public. The Navy benefits from a fully operational and mission-ready DDG 1002, enhancing its defense capabilities. The public benefits from increased national security, deterrence of potential adversaries, and the protection of U.S. interests abroad. Additionally, the contract supports jobs within Huntington Ingalls and its supply chain, contributing to economic activity in the communities where they operate.

Are there any red flags or concerns?

The main potential concern is the unspecified competition type. If this contract was awarded on a sole-source basis, it raises questions about whether taxpayers received the best possible price and if alternative, potentially more cost-effective, solutions were overlooked. While Huntington Ingalls' expertise is undeniable, a lack of competition can sometimes lead to higher costs than might be achieved in a more open market. The long duration (nearly 5.5 years) also warrants careful monitoring to ensure performance remains high throughout the period.