Navy awards $98.7M contract for shipbuilding and repair, with 6 bidders competing

Contract Overview

Contract Amount: $98,697,872 ($98.7M)

Contractor: National Steel and Shipbuilding Company

Awarding Agency: Department of Defense

Start Date: 2022-04-04

End Date: 2027-01-31

Contract Duration: 1,763 days

Daily Burn Rate: $56.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AS(X) CONCEPT REFINEMENT AND PD

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92113

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $98.7 million to NATIONAL STEEL AND SHIPBUILDING COMPANY for work described as: AS(X) CONCEPT REFINEMENT AND PD Key points: 1. Contract value appears reasonable given the scope of shipbuilding and repair services. 2. Strong competition with 6 bidders suggests a healthy market for these services. 3. No immediate risk indicators are apparent from the contract details provided. 4. This contract supports critical naval infrastructure and readiness. 5. The shipbuilding and repair sector is vital for national defense capabilities. 6. Fixed-price contract type helps manage cost certainty for the government.

Value Assessment

Rating: good

The contract value of $98.7 million for shipbuilding and repair services seems aligned with industry benchmarks for complex naval projects. While specific per-unit cost comparisons are not available without more granular data, the presence of multiple bidders and a firm fixed-price structure suggests a competitive pricing environment. The duration of the contract (over 4 years) also indicates a substantial scope of work, making the overall value appear fair for the expected deliverables.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with six distinct bidders participating. This level of competition is a positive signal, indicating that the market has sufficient capacity and interest to bid on this type of requirement. A robust bidding process generally leads to more competitive pricing and a wider range of technical solutions being considered by the agency.

Taxpayer Impact: The strong competition ensures that taxpayer dollars are likely being used efficiently, as multiple companies vied to offer the best value. This process helps prevent inflated pricing and encourages cost-effective solutions for the Navy's shipbuilding and repair needs.

Public Impact

The primary beneficiaries are the Department of the Navy, ensuring the maintenance and readiness of its fleet. Services delivered include shipbuilding and repair, crucial for maintaining naval operational capabilities. The contract's geographic impact is centered in California, a key hub for naval operations and shipbuilding. This contract will likely support a skilled workforce in the shipbuilding and repair industry within California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise in shipbuilding.
Dependence on a single contractor for a significant duration could pose supply chain risks.
Ensuring consistent quality across all repair and shipbuilding tasks is paramount.

Positive Signals

Firm fixed-price contract provides cost certainty.
Multiple bidders indicate a competitive market and potential for innovation.
Long-term contract allows for sustained focus on fleet readiness.
Awarding to a known entity in shipbuilding suggests a degree of reliability.

Sector Analysis

The shipbuilding and repair sector is a critical component of the defense industrial base, characterized by high capital investment, specialized labor, and complex project management. This contract falls within the broader industrial manufacturing and defense services market. Comparable spending benchmarks in this sector are often in the hundreds of millions or billions for major vessel construction, making this a mid-to-large size award for specific repair and potentially smaller-scale new builds or modifications.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. Given the nature of shipbuilding and repair, which often requires extensive facilities and specialized expertise, it is possible that the prime contractor may engage larger subcontractors. Further analysis would be needed to determine the extent of small business participation, if any.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The Department of the Navy is responsible for monitoring performance and ensuring compliance with contract terms. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair Contracts
Shipbuilding and Conversion Contracts
Defense Industrial Base Contracts
Department of Defense Procurement

Risk Flags

Contract Duration
Scope of Work Definition
Potential for Cost Overruns
Supply Chain Dependencies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.7 million to NATIONAL STEEL AND SHIPBUILDING COMPANY. AS(X) CONCEPT REFINEMENT AND PD

Who is the contractor on this award?

The obligated recipient is NATIONAL STEEL AND SHIPBUILDING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $98.7 million.

What is the period of performance?

Start: 2022-04-04. End: 2027-01-31.

What is the historical spending pattern for National Steel and Shipbuilding Company with the Department of Defense?

Historical data indicates that National Steel and Shipbuilding Company (NASSCO) has a significant track record of contracts with the Department of Defense, particularly the Department of the Navy. NASSCO has been a major player in naval shipbuilding and repair for decades, involved in constructing various classes of ships, including destroyers, auxiliaries, and tankers, as well as performing extensive repair and modernization work. Their contract history typically involves large, complex, and long-term agreements, reflecting their specialized capabilities. Analyzing specific past awards would reveal trends in contract types, values, and the specific services rendered, providing context for the current $98.7 million award.

How does the awarded amount compare to similar shipbuilding and repair contracts awarded by the Navy in the last fiscal year?

The $98.7 million award for shipbuilding and repair is a substantial but not unprecedented figure for the Department of the Navy. In recent fiscal years, the Navy has awarded numerous contracts for ship maintenance, repair, modernization, and new construction that range from tens of millions to several billion dollars. For instance, contracts for major overhauls of aircraft carriers or the construction of new vessels would far exceed this amount. However, for specific repair, refit, or component manufacturing tasks, $98.7 million represents a significant contract. Benchmarking against similar definitive contracts for ship repair services awarded in the same region (California) and to similar-sized shipyards would provide a more precise value-for-money assessment.

What are the key performance indicators (KPIs) typically associated with this type of shipbuilding and repair contract?

Key performance indicators for shipbuilding and repair contracts typically focus on schedule adherence, cost control, quality of work, and safety. For this specific contract, KPIs would likely include meeting delivery dates for completed work, staying within the firm fixed-price budget, achieving specified quality standards for repairs and construction (e.g., defect rates, rework required), and maintaining a strong safety record with minimal incidents. Performance metrics might also track the efficiency of labor hours and material usage. The Navy would monitor these KPIs through regular progress reports, inspections, and potentially performance evaluations at key milestones.

What is the potential impact of this contract on the small business ecosystem within the naval shipbuilding sector?

The direct impact of this $98.7 million contract on the small business ecosystem is likely limited unless specific subcontracting goals are mandated or voluntarily pursued by the prime contractor, National Steel and Shipbuilding Company (NASSCO). NASSCO is a large entity itself, and shipbuilding and repair often involve complex supply chains where larger firms may dominate. However, NASSCO's operations do create indirect opportunities for small businesses that supply materials, components, specialized services (like welding, painting, or testing), or support functions in the region. The extent of small business subcontracting would need to be explicitly tracked to understand the full impact.

Are there any specific technological advancements or innovations expected to be incorporated through this contract?

The contract description 'AS(X) CONCEPT REFINEMENT AND PD' suggests a focus on 'Concept Refinement and Program Definition' rather than direct construction or repair of existing vessels. This implies that the contract may involve advanced engineering, design studies, prototyping, or the development of new concepts for naval platforms or systems. Therefore, technological advancements and innovations are likely central to the contract's objectives. This could include incorporating new materials, advanced manufacturing techniques, digital design tools, or exploring novel operational concepts for future naval capabilities. The 'PD' likely refers to 'Program Definition,' indicating a stage where new technologies are being evaluated and integrated into future program plans.

What is the historical performance record of National Steel and Shipbuilding Company on similar large-scale naval contracts?

National Steel and Shipbuilding Company (NASSCO), now part of General Dynamics NASSCO, has a long and generally strong performance record with the U.S. Navy. They have successfully delivered numerous complex vessels, including oil tankers, auxiliary ships, and destroyers, often meeting demanding specifications and schedules. While like any large contractor, they may have faced challenges or delays on specific projects, their overall history reflects a capability to handle large-scale shipbuilding and repair programs. Their experience in constructing and servicing a wide range of naval platforms suggests a high level of technical expertise and program management proficiency relevant to this contract.

Industry Classification

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

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002421R2504

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2798 E HARBOR DR, 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: $131,370,960

Exercised Options: $131,370,960

Current Obligation: $98,697,872

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline