Navy Awards $185.7M Contract to Bath Iron Works for DDG 51 Class Lead Yard Support
Contract Overview
Contract Amount: $185,701,009 ($185.7M)
Contractor: Bath Iron Works Corporation
Awarding Agency: Department of Defense
Start Date: 2024-12-01
End Date: 2028-11-30
Contract Duration: 1,460 days
Daily Burn Rate: $127.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: DDG 51 CLASS LEAD YARD SUPPORT
Place of Performance
Location: BATH, SAGADAHOC County, MAINE, 04530
State: Maine Government Spending
Plain-Language Summary
Department of Defense obligated $185.7 million to BATH IRON WORKS CORPORATION for work described as: DDG 51 CLASS LEAD YARD SUPPORT Key points: 1. Contract awarded to a single, established shipyard for specialized support. 2. Focus on lead yard services suggests a critical role in shipbuilding program. 3. Potential for cost overruns exists given the Cost Plus Award Fee structure. 4. The shipbuilding and repair sector is capital-intensive and subject to long-term demand cycles.
Value Assessment
Rating: fair
The contract's Cost Plus Award Fee structure allows for cost reimbursement plus an incentive fee. Without detailed cost breakdowns and performance metrics, it's difficult to assess if the pricing is competitive. Benchmarking against similar lead yard support contracts would be necessary for a definitive valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and competition, potentially leading to higher costs for taxpayers. The justification for sole-sourcing should be clearly documented.
Taxpayer Impact: The lack of competition may result in higher costs than a competed contract, impacting taxpayer value.
Public Impact
Ensures continued support for a critical naval shipbuilding program. Supports jobs and economic activity within the specified shipyard's region. Potential for increased defense spending without direct comparison to market rates.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price scrutiny.
- Cost Plus Award Fee structure can incentivize spending.
- Long contract duration increases exposure to cost fluctuations.
Positive Signals
- Supports a key defense asset (DDG 51 class destroyers).
- Provides continuity for essential shipbuilding expertise.
- Awarded to a known entity with established capabilities.
Sector Analysis
This contract falls within the shipbuilding and repair sector, which is characterized by large, complex projects and significant government investment. Benchmarks for lead yard support are highly specific to the vessel class and shipyard capabilities.
Small Business Impact
The contract does not indicate specific provisions for small business participation. Given the specialized nature of lead yard support for naval vessels, it is likely that Bath Iron Works will subcontract to other large or specialized firms, with limited direct opportunities for small businesses.
Oversight & Accountability
Oversight will be crucial to ensure Bath Iron Works meets performance objectives and manages costs effectively under the Cost Plus Award Fee structure. The Department of the Navy's contracting officers will be responsible for monitoring contract performance and financial expenditures.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost Plus Award Fee structure can incentivize overspending.
- Long-term contract duration increases exposure to economic volatility.
- Dependence on a single provider for critical support.
- Potential for scope creep without stringent oversight.
Tags
ship-building-and-repairing, department-of-defense, me, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $185.7 million to BATH IRON WORKS CORPORATION. DDG 51 CLASS LEAD YARD SUPPORT
Who is the contractor on this award?
The obligated recipient is BATH IRON WORKS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $185.7 million.
What is the period of performance?
Start: 2024-12-01. End: 2028-11-30.
What specific technical and programmatic support does 'lead yard support' entail for the DDG 51 class, and how does this justify a sole-source award?
Lead yard support typically encompasses a range of critical functions including design integrity, technical expertise, configuration management, and oversight of construction and modernization for a specific ship class. For the DDG 51 class, this likely involves ensuring design consistency, providing engineering solutions to construction challenges, managing class-wide changes, and supporting fleet readiness. The justification for a sole-source award would hinge on Bath Iron Works being the original designer and builder, possessing unique historical knowledge and intellectual property essential for maintaining the class's integrity and operational effectiveness throughout its lifecycle.
How will the Cost Plus Award Fee structure be managed to ensure cost control and incentivize efficient performance, given the absence of competition?
Effective management of the Cost Plus Award Fee (CPAF) structure requires clearly defined performance metrics and objective criteria for determining the award fee. The Navy must establish baseline cost targets and performance standards related to schedule adherence, quality of work, and technical execution. Regular reviews and audits will be necessary to validate incurred costs and assess performance against these criteria. Transparency in fee determination and robust oversight are essential to prevent cost overruns and ensure the contractor is incentivized to achieve program goals efficiently.
What is the long-term strategic value of maintaining a sole-source relationship for lead yard support versus exploring competitive options for future contracts?
The long-term strategic value of a sole-source relationship for lead yard support lies in preserving specialized knowledge, design continuity, and established production efficiencies critical for complex naval platforms like the DDG 51 class. However, it also carries the risk of complacency and potentially higher costs over time due to the lack of competitive pressure. The Navy should periodically assess whether the unique capabilities of the incumbent provider remain indispensable or if market conditions and evolving technologies could support a more competitive procurement strategy for future sustainment or modernization efforts.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002423R2313
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Wico Limited
Address: 700 WASHINGTON ST, BATH, ME, 04530
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $423,985,907
Exercised Options: $236,593,721
Current Obligation: $185,701,009
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-12-01
Current End Date: 2028-11-30
Potential End Date: 2028-11-30 00:00:00
Last Modified: 2025-12-19
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