Navy Awards $631.8M Contract for T-AGOS 25 Class Ship 1 to Austal USA
Contract Overview
Contract Amount: $631,815,731 ($631.8M)
Contractor: Austal USA, LLC
Awarding Agency: Department of Defense
Start Date: 2023-05-18
End Date: 2033-09-30
Contract Duration: 3,788 days
Daily Burn Rate: $166.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: T-AGOS 25 CLASS - SHIP 1
Place of Performance
Location: MOBILE, MOBILE County, ALABAMA, 36602
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $631.8 million to AUSTAL USA, LLC for work described as: T-AGOS 25 CLASS - SHIP 1 Key points: 1. Significant investment in naval shipbuilding capacity. 2. Competition method is full and open, suggesting potential for competitive pricing. 3. Fixed Price Incentive contract type aims to balance cost control with performance. 4. Sector focus on shipbuilding and repair, a critical defense industry.
Value Assessment
Rating: good
The contract value of $631.8 million for a single ship appears within the typical range for complex naval vessels. Benchmarking against similar T-AGOS class ships or comparable naval construction projects would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing and allows a broad range of qualified contractors to bid. This method is expected to yield a fair market price.
Taxpayer Impact: The substantial contract value represents a significant taxpayer investment in national defense capabilities and the shipbuilding industrial base.
Public Impact
Enhances U.S. Navy's intelligence, surveillance, and reconnaissance capabilities. Supports domestic shipbuilding industry and associated supply chains. Long-term contract duration indicates a sustained commitment to this class of vessel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in fixed-price incentive contracts.
- Dependence on a single contractor for this specific ship class.
- Long contract duration may expose it to economic fluctuations.
Positive Signals
- Awarded through full and open competition.
- Supports critical national defense mission.
- Contract type incentivizes contractor performance.
Sector Analysis
This contract falls within the shipbuilding and repair sector, a vital component of the defense industrial base. Spending in this sector is often characterized by high unit costs, long lead times, and significant government oversight due to the complexity and strategic importance of naval vessels.
Small Business Impact
While the prime contractor is Austal USA, LLC, the contract does not explicitly state small business participation goals. Subcontracting opportunities for small businesses within the shipbuilding supply chain are likely, but not detailed in this award notice.
Oversight & Accountability
The definitive contract award with a fixed-price incentive structure suggests a framework for oversight. However, the long duration and complexity of shipbuilding necessitate robust monitoring of performance, cost, and schedule to ensure accountability and taxpayer value.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Long-term contract duration.
- Fixed Price Incentive contract risks.
- Potential for supply chain disruptions.
- Dependence on single shipyard for initial build.
Tags
ship-building-and-repairing, department-of-defense, al, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $631.8 million to AUSTAL USA, LLC. T-AGOS 25 CLASS - SHIP 1
Who is the contractor on this award?
The obligated recipient is AUSTAL USA, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $631.8 million.
What is the period of performance?
Start: 2023-05-18. End: 2033-09-30.
What is the projected cost per unit for the T-AGOS 25 class ships, and how does it compare to previous classes or similar vessels?
The total contract value of $631.8 million for Ship 1 provides a baseline. Without further breakdown or comparison data for previous T-AGOS classes or comparable naval support vessels, a precise per-unit cost benchmark is difficult to establish. Further analysis would require access to detailed cost breakdowns and historical data for similar acquisitions to assess value for money effectively.
What are the key performance metrics and incentives within the Fixed Price Incentive contract, and how are they monitored to mitigate cost risks?
The Fixed Price Incentive (FPI) contract structure implies target cost, target profit, and ceiling price. Key performance metrics likely relate to ship delivery schedule, quality standards, and operational capabilities. The government monitors these through regular program reviews, inspections, and milestone achievements. The FPI structure incentivizes the contractor to control costs below the ceiling to share in savings, but also limits the government's exposure if costs exceed the target but remain below the ceiling.
How does the acquisition of the T-AGOS 25 class align with the Navy's long-term strategic objectives for intelligence gathering and fleet support?
The T-AGOS (T-Auxiliary General Ocean Surveillance) class is designed to provide vital ocean surveillance data, crucial for intelligence gathering and supporting naval operations. Acquiring new vessels in this class signifies the Navy's commitment to modernizing its intelligence, surveillance, and reconnaissance (ISR) capabilities and ensuring continued support for its global fleet operations in the coming decades.
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: N0002422R2203
Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Austal Limited
Address: 100 AUSTAL WAY, MOBILE, AL, 36602
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $3,196,824,230
Exercised Options: $631,815,731
Current Obligation: $631,815,731
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-05-18
Current End Date: 2033-09-30
Potential End Date: 2033-09-30 00:00:00
Last Modified: 2025-11-25
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