Navy awards $35.1M for LVA installation planning and execution, with a significant portion allocated to Hawaii

Contract Overview

Contract Amount: $35,155,418 ($35.2M)

Contractor: Huntington Ingalls Inc

Awarding Agency: Department of Defense

Start Date: 2023-02-23

End Date: 2027-09-30

Contract Duration: 1,680 days

Daily Burn Rate: $20.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: INSTALLATION PLANNING AND EXECUTION OF LVA INSTALLATION.

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $35.2 million to HUNTINGTON INGALLS INC for work described as: INSTALLATION PLANNING AND EXECUTION OF LVA INSTALLATION. Key points: 1. Contract focuses on installation planning and execution for Low Voltage Array (LVA) systems. 2. The contract was awarded to Huntington Ingalls Inc., a major defense contractor. 3. Performance period extends over four years, indicating a substantial project timeline. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. The award was made under full and open competition after exclusion of sources, suggesting a specific justification for limiting initial bidders. 6. The primary place of performance is Hawaii, highlighting regional economic impact.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns. The fixed fee component provides some cost control, but the cost-reimbursable nature of the contract introduces inherent risk. Comparing this to similar LVA installation projects is difficult due to the specialized nature of the work and the limited public data on cost structures for such installations. The total award amount of $35.1 million over approximately 1680 days suggests a significant investment in infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while competition was sought, specific sources were initially excluded, possibly due to unique capabilities or prior relationships. The number of bidders is not specified, but the 'exclusion of sources' clause suggests a potentially narrower competitive field than a standard full and open competition. This approach can sometimes lead to higher prices if the excluded sources would have offered more competitive bids.

Taxpayer Impact: Taxpayers may face higher costs due to the limited competitive pool resulting from the exclusion of certain sources. The justification for exclusion needs to be robust to ensure fair value.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational readiness, through the successful installation of LVA systems. Services delivered include planning and execution for the installation of Low Voltage Array systems. The geographic impact is concentrated in Hawaii, potentially creating local jobs and economic activity related to the installation. Workforce implications may include the need for specialized technicians and project managers in Hawaii for the duration of the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risk of cost escalation if not meticulously managed.
The 'exclusion of sources' in the competition raises questions about the breadth of market engagement and potential impact on price.
Lack of detailed public cost breakdowns makes independent value assessment difficult.

Positive Signals

The contract was awarded following a competitive process, indicating some level of market vetting.
The long performance period suggests a commitment to a critical, long-term capability for the Navy.
The primary contractor, Huntington Ingalls Inc., is a well-established entity in the defense sector.

Sector Analysis

This contract falls within the broader defense electronics and infrastructure sector. The market for specialized installation and maintenance of advanced electronic systems like LVAs is niche, often dominated by a few key defense contractors. Benchmarking spending is difficult without specific details on LVA technology and its prevalence across military branches. However, the $35.1 million award indicates a significant investment in a specific technological capability.

Small Business Impact

There is no indication of small business set-asides for this contract, as it was awarded to Huntington Ingalls Inc., a large prime contractor. Subcontracting opportunities for small businesses may exist, but these are not explicitly detailed in the provided data. The focus on a large prime contract suggests that the primary award is not aimed at directly boosting the small business ecosystem, though downstream effects through subcontracting are possible.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically involve rigorous monitoring of costs incurred by the contractor against the approved budget and fixed fee. The Department of the Navy's contracting officers and potentially an Inspector General's office would be responsible for ensuring compliance with contract terms, preventing fraud, waste, and abuse, and verifying the necessity and allowability of costs. Transparency is limited by the proprietary nature of detailed cost data.

Related Government Programs

Naval Base Infrastructure Modernization
Defense Electronic Systems Installation
Military Communications Network Upgrades
Department of Defense Facilities Maintenance

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Limited Competition Due to Source Exclusion
Potential for Inefficiencies in Long-Term Project

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.2 million to HUNTINGTON INGALLS INC. INSTALLATION PLANNING AND EXECUTION OF LVA INSTALLATION.

Who is the contractor on this award?

The obligated recipient is HUNTINGTON INGALLS 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 $35.2 million.

What is the period of performance?

Start: 2023-02-23. End: 2027-09-30.

What is the specific nature and function of the Low Voltage Array (LVA) system being installed?

The provided data does not specify the exact nature or function of the Low Voltage Array (LVA) system. However, based on the context of defense contracts and the term 'array,' it likely refers to a system composed of multiple low-voltage components designed for a specific operational purpose. This could range from advanced sensor networks, communication systems, or specialized monitoring equipment. The 'installation planning and execution' aspect suggests it involves setting up new infrastructure or significantly upgrading existing systems. Further details would be required from the contract's statement of work or related documentation to understand its precise role.

How does the $35.1 million cost compare to similar LVA installation projects?

Direct comparison of the $35.1 million cost for this LVA installation project to similar endeavors is challenging due to the specialized nature of the technology and the limited public availability of cost data for such niche defense installations. The contract type, Cost Plus Fixed Fee (CPFF), also complicates direct cost benchmarking, as it includes variable costs plus a predetermined profit. To assess value, one would need to compare the scope of work, complexity, duration (1680 days), and specific technological requirements against other known LVA installations or comparable electronic system deployments within the Department of Defense or other government agencies. Without access to detailed cost breakdowns and specific project scopes, a precise value-for-money assessment relative to benchmarks is not feasible.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of installation?

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded for LVA installation, present specific risks. The primary risk is that the 'cost-plus' component means the government reimburses the contractor for allowable costs incurred, which can be unpredictable and potentially exceed initial estimates. While the 'fixed fee' provides a stable profit margin for the contractor, it does not cap the total project cost. If the contractor does not manage costs efficiently, the total expenditure can escalate significantly. Effective oversight, stringent cost controls, and clear definition of allowable costs are crucial to mitigate these risks and ensure the government receives good value. Scope creep, if not managed, can also inflate costs under this contract type.

What does the 'Full and Open Competition After Exclusion of Sources' designation imply for the bidding process and potential pricing?

The designation 'Full and Open Competition After Exclusion of Sources' implies a nuanced competitive process. Initially, the agency likely determined that only specific sources possessed the necessary capabilities or that other sources should be excluded for particular reasons (e.g., national security, unique technology, prior performance). Following this exclusion, the remaining qualified sources were invited to compete. This can lead to a more limited pool of bidders than a standard 'full and open' competition. While competition still exists among the included sources, the exclusion might reduce the overall competitive pressure, potentially impacting price discovery and leading to higher-than-expected costs for taxpayers if the excluded sources were capable of offering more competitive terms.

What is the track record of Huntington Ingalls Inc. in managing similar large-scale defense installation contracts?

Huntington Ingalls Industries (HII), the parent company of Huntington Ingalls Inc., has a long and extensive track record in managing large-scale defense contracts, particularly in shipbuilding and complex systems integration. While this specific contract focuses on 'installation planning and execution of LVA installation,' HII's broader experience in managing multi-billion dollar defense programs suggests a capacity for handling complex projects. Their history includes delivering major naval platforms and supporting various defense infrastructure needs. However, the success of any specific contract depends on the project management team assigned, the specific technical requirements, and the oversight provided. A detailed review of HII's performance on recent, similar-scope installation or systems integration contracts would provide a more precise assessment.

How does the performance period of 1680 days (approx. 4.6 years) influence the assessment of this contract's value?

The extended performance period of 1680 days (approximately 4.6 years) for the LVA installation project suggests a complex, long-term undertaking rather than a short-term service. This duration implies significant planning, phased execution, and potentially integration with other ongoing or future projects. For a Cost Plus Fixed Fee contract, a longer period can increase the risk of cost escalation due to market fluctuations in labor or materials, or unforeseen technical challenges that emerge over time. However, it also allows for a more thorough and potentially higher-quality installation. The value assessment must consider whether this extended timeline is justified by the complexity and strategic importance of the LVA system, and whether the fixed fee adequately compensates the contractor for the extended management effort and associated risks.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002420R6115

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc

Address: 4101 WASHINGTON AVE, NEWPORT NEWS, VA, 23607

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

Financial Breakdown

Contract Ceiling: $35,155,418

Exercised Options: $35,155,418

Current Obligation: $35,155,418

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0002421D6116

IDV Type: IDC

Timeline