Navy Awards BAE Systems $238.5M for USS Essex FY22 Docking Availability

Contract Overview

Contract Amount: $238,535,465 ($238.5M)

Contractor: BAE Systems Maritime Solutions SAN Diego Inc.

Awarding Agency: Department of Defense

Start Date: 2022-06-06

End Date: 2025-10-15

Contract Duration: 1,227 days

Daily Burn Rate: $194.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS ESSEX (LHD 2) FY22 DOCKING SELECTED RESTRICTED AVAILABILITY (DSRA)

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $238.5 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: USS ESSEX (LHD 2) FY22 DOCKING SELECTED RESTRICTED AVAILABILITY (DSRA) Key points: 1. Significant contract value for a complex naval repair and modernization project. 2. BAE Systems is a major defense contractor with extensive shipbuilding and repair experience. 3. Potential risks include schedule delays, cost overruns, and technical challenges inherent in large naval availabilities. 4. Spending falls within the Ship Building and Repairing sector, characterized by high-value, long-term contracts.

Value Assessment

Rating: good

The $238.5 million contract for the USS Essex DSRA appears reasonable given the scope of work, which includes extensive maintenance and upgrades. Benchmarking against similar complex naval availabilities suggests this pricing is competitive, though detailed cost breakdowns would be needed for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders likely participated. This competitive process is expected to have driven price discovery and ensured a fair market price for the services rendered.

Taxpayer Impact: Taxpayer funds are being used for essential maintenance and modernization of a critical naval asset, ensuring its operational readiness and extending its service life.

Public Impact

Ensures the operational readiness of a key U.S. Navy amphibious assault ship. Supports skilled jobs in the maritime repair industry, particularly in California. Contributes to the long-term capability and lifespan of naval assets. Represents a significant investment in national defense infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule slippage given the long duration and complexity.
Risk of unforeseen technical issues requiring scope adjustments and cost increases.
Dependence on a single contractor for a critical availability.

Positive Signals

Awarded under full and open competition.
Firm Fixed Price contract type helps control costs.
Long-term availability ensures comprehensive maintenance.

Sector Analysis

This contract falls under the Ship Building and Repairing sector (NAICS 336611), which involves large, complex projects with significant lead times and specialized labor. Spending benchmarks for similar naval availabilities typically range in the tens to hundreds of millions of dollars.

Small Business Impact

While the prime contractor is BAE Systems, a large corporation, the contract may offer subcontracting opportunities for smaller businesses in specialized areas of ship repair, maintenance, and supply chain services.

Oversight & Accountability

The Department of the Navy's contracting process, including competitive bidding and contract oversight, aims to ensure accountability. However, the long duration and complexity necessitate ongoing monitoring to manage risks and ensure performance.

Related Government Programs

Ship Building and Repairing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for schedule delays.
Risk of unforeseen technical challenges.
Complexity of naval repair projects.
Long contract duration increases exposure to risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $238.5 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. USS ESSEX (LHD 2) FY22 DOCKING SELECTED RESTRICTED AVAILABILITY (DSRA)

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 $238.5 million.

What is the period of performance?

Start: 2022-06-06. End: 2025-10-15.

What specific upgrades or modernization efforts are included in this availability, and how do they align with current naval fleet requirements?

The specific upgrades are not detailed in the provided data, but a Selected Restricted Availability (DSRA) typically involves extensive maintenance, hull repairs, system overhauls (e.g., propulsion, electronics), and potentially modernization of combat or habitability systems. These efforts are crucial for maintaining the USS Essex's (LHD 2) capability to support amphibious operations and project power, aligning with the Navy's need for a modern, ready fleet.

What mechanisms are in place to mitigate the risk of cost overruns, given the firm fixed-price nature and potential for unforeseen issues?

While a firm fixed-price contract aims to cap costs, mitigation strategies include detailed pre-availability planning, robust inspection processes to identify issues early, and clear change order procedures. The government will likely have technical representatives on-site to monitor progress and ensure adherence to the contract scope, intervening early if deviations or unexpected problems arise that could impact cost or schedule.

How does the performance of BAE Systems on similar past contracts inform the assessment of this award's effectiveness?

Assessing effectiveness requires reviewing BAE Systems' historical performance on comparable naval availabilities. Factors to consider include their track record for on-time completion, adherence to budget, quality of work, and responsiveness to issues. Positive past performance would increase confidence in the successful execution of this contract, while past difficulties might raise concerns about potential risks materializing.

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: N0002421R4420

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 2205 E BELT ST, SAN DIEGO, CA, 92113

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

Financial Breakdown

Contract Ceiling: $242,717,411

Exercised Options: $238,535,465

Current Obligation: $238,535,465

Actual Outlays: $122,085,033

Subaward Activity

Number of Subawards: 991

Total Subaward Amount: $41,413,380

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline