Navy awards $33.4M for Norwegian Combat Craft Medium, a sole-source boat building contract

Contract Overview

Contract Amount: $33,450,237 ($33.5M)

Contractor: Reconcraft, LLC

Awarding Agency: Department of Defense

Start Date: 2023-05-09

End Date: 2026-07-30

Contract Duration: 1,178 days

Daily Burn Rate: $28.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NORWEGIAN COMBAT CRAFT MEDIUM (N-CCM) 1

Place of Performance

Location: CLACKAMAS, CLACKAMAS County, OREGON, 97015

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to RECONCRAFT, LLC for work described as: NORWEGIAN COMBAT CRAFT MEDIUM (N-CCM) 1 Key points: 1. The contract value of $33.4 million for boat building appears to be a significant investment for specialized craft. 2. The sole-source nature of this award warrants scrutiny regarding the justification for limited competition. 3. The firm fixed-price contract type suggests a defined cost structure, but potential for cost overruns still exists. 4. The contract duration of nearly 4 years indicates a long-term commitment to this specific capability. 5. The absence of small business set-aside flags suggests this contract may not directly benefit smaller enterprises. 6. The geographic location of the awardee in Oregon might have implications for regional economic impact.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the 'Norwegian Combat Craft Medium' capabilities and the market for such specialized vessels. The $33.4 million award for a single definitive contract suggests a high per-unit cost, typical for advanced or custom-built military equipment. Further analysis would require comparing this to similar specialized naval craft procurements and understanding the unique requirements driving the price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, RECONCRAFT, LLC, was solicited. The justification for this limited competition is not provided in the data. Sole-source awards can sometimes lead to higher prices due to the lack of competitive pressure, but may be necessary for highly specialized or proprietary technologies where only one source can meet the requirement.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process. The government must ensure a strong justification exists for sole-source awards to maintain fiscal responsibility.

Public Impact

The primary beneficiaries are the U.S. Navy, which will receive specialized combat craft for its operations. The contract will deliver medium-sized combat boats, likely for patrol, special operations, or interdiction missions. The geographic impact is concentrated in Oregon, where RECONCRAFT, LLC is located, potentially creating or sustaining local jobs. Workforce implications include skilled labor in boat building, engineering, and related manufacturing sectors within the awardee's region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
The sole-source justification needs thorough review to ensure it is valid and in the government's best interest.
Limited transparency on the specific technical requirements and performance metrics for the craft.
Potential for vendor lock-in if this specialized craft becomes a standard requirement without future competition.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a specific company suggests they possess unique capabilities required by the Navy.
The contract duration indicates a long-term need and potential for stable production.

Sector Analysis

The defense sector, particularly naval shipbuilding and specialized craft manufacturing, is characterized by high barriers to entry, significant R&D investment, and stringent quality and performance requirements. Contracts like this are crucial for maintaining naval readiness and technological superiority. The market for such specialized vessels is often limited to a few key players capable of meeting the demanding specifications, which can influence competition dynamics.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the prime contractor, RECONCRAFT, LLC, is likely a larger entity, or that the nature of the work did not lend itself to a small business set-aside. There is no information provided on subcontracting plans, so the impact on the small business ecosystem is currently unknown, but likely minimal for the prime contract itself.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods within the agreed price. Transparency could be enhanced by making the sole-source justification publicly available and detailing the performance metrics for the craft. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Vessel Construction
Special Operations Craft Procurement
Maritime Security Vessels
Combat Boat Development

Risk Flags

Sole-source award requires strong justification.
Lack of competition may impact price discovery.
No small business set-aside identified.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to RECONCRAFT, LLC. NORWEGIAN COMBAT CRAFT MEDIUM (N-CCM) 1

Who is the contractor on this award?

The obligated recipient is RECONCRAFT, 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 $33.5 million.

What is the period of performance?

Start: 2023-05-09. End: 2026-07-30.

What specific capabilities does the Norwegian Combat Craft Medium (N-CCM) offer that necessitate a sole-source award?

The provided data does not detail the specific capabilities of the Norwegian Combat Craft Medium (N-CCM). However, sole-source awards are typically justified when a particular technology, system, or capability is unique to a single source, or when there is a compelling urgency that precludes full and open competition. For specialized naval craft, this could involve unique hull designs, advanced propulsion systems, integrated combat systems, or specific operational requirements that only one manufacturer can meet. Without further documentation on the N-CCM's specifications and the market analysis conducted by the Department of the Navy, it is difficult to ascertain the precise reasons for the sole-source designation. This information is crucial for understanding if the award represents true necessity or a missed opportunity for competition.

How does the $33.4 million contract value compare to similar specialized naval craft procurements?

Directly comparing the $33.4 million contract value for the N-CCM is challenging without specific details on the quantity of craft being procured and their exact specifications. However, specialized military vessels, especially those incorporating advanced technology or designed for specific combat roles, can command high unit costs. For context, smaller patrol boats might cost in the low millions, while larger, more complex vessels like frigates or destroyers cost hundreds of millions or billions. The value suggests these are likely sophisticated, perhaps custom-built, craft. To benchmark effectively, one would need to identify contracts for similar-sized, similarly equipped naval platforms, considering factors like speed, armament, sensor suites, and operational range. The firm fixed-price nature implies the $33.4 million covers the full scope, but the unit cost remains a key metric for value assessment.

What are the potential risks associated with a sole-source contract for the N-CCM program?

The primary risk associated with a sole-source contract for the N-CCM program is the potential for reduced value for taxpayer money due to the lack of competition. Without competing bids, RECONCRAFT, LLC may not have been incentivized to offer the lowest possible price. This can lead to cost inefficiencies and potentially higher overall program expenses. Another risk is the potential for vendor lock-in, where the Navy becomes dependent on a single supplier for critical components or future upgrades, limiting flexibility and potentially increasing long-term costs. Furthermore, the absence of competitive pressure might reduce the impetus for the contractor to innovate or maintain the highest standards of efficiency and quality, although contract performance clauses should mitigate this. Ensuring the sole-source justification is robust and periodically re-evaluated is critical to managing these risks.

What is the historical spending pattern for RECONCRAFT, LLC with the Department of Defense?

The provided data indicates this is a definitive contract awarded on May 9, 2023, with an end date of July 30, 2026. It represents a single award of $33,450,236.99 to RECONCRAFT, LLC by the Department of the Navy. To assess historical spending patterns, one would need access to broader federal procurement databases that track all contracts awarded to RECONCRAFT, LLC over time. This would reveal the frequency, value, and types of contracts the company has secured previously. Without this broader context, it's impossible to determine if this $33.4 million award is typical, an outlier, or indicative of a growing relationship between the company and the Department of Defense. Analyzing past performance and contract history is essential for evaluating contractor reliability and value.

How does the 'Boat Building' Product Service Code (PSC) relate to the overall defense spending in this category?

The Product Service Code (PSC) for this contract is listed as blank (''). However, the 'nd' field indicates 'Boat Building'. Boat building falls under a broader category of shipbuilding and repair within the defense sector. Federal spending on shipbuilding and repair is substantial, encompassing everything from small craft like the N-CCM to large aircraft carriers and submarines. The specific PSC for boat building would allow for more precise tracking and comparison against historical spending trends and other similar procurements. While this specific contract value is $33.4 million, overall defense spending on naval vessels and maritime capabilities represents a significant portion of the defense budget, reflecting the strategic importance of sea power and maritime security.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Boat Building

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002423R2205

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1577 C ST STE 300, ANCHORAGE, AK, 99501

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,713,609

Exercised Options: $33,450,237

Current Obligation: $33,450,237

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline