DoD awards $35.6M contract for Lenah Sutcliffe Higbee (DDG 123) ship building and repair to BAE Systems
Contract Overview
Contract Amount: $35,649,985 ($35.6M)
Contractor: BAE Systems Maritime Solutions SAN Diego Inc.
Awarding Agency: Department of Defense
Start Date: 2022-11-22
End Date: 2024-05-22
Contract Duration: 547 days
Daily Burn Rate: $65.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: PSA FOR LENAH SUTCLIFFE HIGBEE (DDG 123)
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92113
Plain-Language Summary
Department of Defense obligated $35.6 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC. for work described as: PSA FOR LENAH SUTCLIFFE HIGBEE (DDG 123) Key points: 1. Contract awarded to BAE Systems, a major defense contractor. 2. Spending is within the Ship Building and Repair sector. 3. Potential for cost overruns given the Cost Plus Award Fee structure. 4. No specific small business participation noted.
Value Assessment
Rating: good
The contract value of $35.6M for a specific ship hull appears reasonable for its scope. Benchmarking against similar DDG class ship construction contracts would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. This method generally promotes price discovery and potentially better pricing for the government.
Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for this naval asset.
Public Impact
Supports naval shipbuilding capabilities and readiness. Contributes to the defense industrial base in California. Ensures the construction of a critical naval asset.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee (CPAF) can lead to higher costs if not managed tightly.
- Contract duration of 547 days requires ongoing monitoring.
Positive Signals
- Awarded under full and open competition.
- Clear definition of the asset being procured (DDG 123).
Sector Analysis
This contract falls within the shipbuilding and repair sector, a significant area of defense spending. Benchmarks for similar naval vessel construction contracts are typically in the hundreds of millions to billions of dollars.
Small Business Impact
The data indicates that small business participation was not a specific requirement or was not met for this contract. Further investigation may be needed to understand the extent of small business involvement in the supply chain.
Oversight & Accountability
The Department of the Navy is responsible for oversight. The use of a Cost Plus Award Fee contract necessitates robust government oversight to ensure performance and cost control.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost Plus Award Fee structure.
- Long contract duration.
- No explicit small business set-aside.
- Complexity inherent in shipbuilding.
Tags
ship-building-and-repairing, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.6 million to BAE SYSTEMS MARITIME SOLUTIONS SAN DIEGO INC.. PSA FOR LENAH SUTCLIFFE HIGBEE (DDG 123)
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 $35.6 million.
What is the period of performance?
Start: 2022-11-22. End: 2024-05-22.
What is the expected cost efficiency of a Cost Plus Award Fee contract for shipbuilding compared to other contract types?
Cost Plus Award Fee (CPAF) contracts aim to incentivize contractor performance by linking a portion of the fee to achieving specific performance goals. While offering flexibility, CPAF can potentially lead to higher overall costs than fixed-price contracts if performance targets are not well-defined or if the government's oversight is insufficient to control scope creep and manage costs effectively.
What are the primary risks associated with the 'Ship Building and Repairing' sector for federal contracts?
Key risks in shipbuilding and repair include significant cost overruns due to complex engineering, long lead times for materials, potential design changes during construction, labor shortages, and the specialized nature of the work. Technological advancements and evolving military requirements can also introduce risks and necessitate contract modifications, impacting budget and schedule.
How does the 'full and open competition' method impact the overall value and effectiveness of this contract?
Full and open competition generally enhances value by fostering a competitive environment that drives down prices and encourages innovation. It increases the likelihood that the government secures the best possible solution at a fair price. The effectiveness is tied to the clarity of requirements and the government's ability to evaluate proposals comprehensively.
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: N0002422R2316
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Compagnie DE Developpement DE L'eau S.A.
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: $59,474,540
Exercised Options: $42,410,649
Current Obligation: $35,649,985
Subaward Activity
Number of Subawards: 84
Total Subaward Amount: $10,472,375
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2022-11-22
Current End Date: 2024-05-22
Potential End Date: 2025-11-19 00:00:00
Last Modified: 2025-11-20
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