Navy awards $133.5M for USS LABOON (DDG 58) FY25 Drydocking and Scheduled Repair and Maintenance

Contract Overview

Contract Amount: $133,501,557 ($133.5M)

Contractor: BAE Systems Maritime Solutions Norfolk Inc.

Awarding Agency: Department of Defense

Start Date: 2024-10-18

End Date: 2026-07-31

Contract Duration: 651 days

Daily Burn Rate: $205.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS LABOON (DDG 58) FY25 DSRA

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $133.5 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. for work described as: USS LABOON (DDG 58) FY25 DSRA Key points: 1. Contract awarded to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. for ship repair services. 2. The contract has a firm fixed price structure, indicating clear cost expectations. 3. Competition was full and open, suggesting a robust bidding process. 4. The contract duration is 651 days, covering a significant period of maintenance. 5. The award is for fiscal year 2025, aligning with planned naval readiness. 6. The North American Industry Classification System (NAICS) code is 336611 for shipbuilding and repairing.

Value Assessment

Rating: good

The contract value of $133.5 million for a two-year drydocking and repair period for a DDG-class destroyer appears reasonable within the context of naval shipbuilding and repair. While specific per-unit cost benchmarks for this exact scope are not readily available, the firm fixed-price nature suggests that the contractor has assessed risks and costs to provide a definitive price. Benchmarking against similar complex naval vessel repair contracts would provide further insight into value for money, but the scale of the vessel and the comprehensive nature of the work (drydocking, scheduled repair, and maintenance) justify a significant investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a competitive environment, though the exact number of interested parties and the rigor of the evaluation process would provide a more complete picture. Full and open competition generally promotes price discovery and encourages contractors to offer their best pricing and technical solutions to win the award.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of technical solutions, ensuring the government receives the best value for its investment in critical naval readiness.

Public Impact

The primary beneficiaries are the U.S. Navy and its operational readiness, ensuring the USS LABOON (DDG 58) remains a capable asset. The contract delivers essential drydocking, scheduled repair, and maintenance services for a guided-missile destroyer. The geographic impact is centered around Norfolk, Virginia, where BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. is located, likely involving local port facilities. The contract will support a workforce skilled in naval shipbuilding and repair, potentially including engineers, technicians, and maritime trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during repairs, despite the firm fixed-price structure.
Dependence on a single contractor for a critical maintenance period could pose risks if performance issues emerge.
The long duration of the contract (651 days) increases exposure to market fluctuations in labor and material costs.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive bidding process that should yield favorable pricing.
Award to an established maritime solutions provider with experience in naval vessel repair.
Contract aligns with fiscal year 2025 planning, indicating proactive resource allocation for readiness.

Sector Analysis

The shipbuilding and repairing sector (NAICS 336611) is a critical component of the U.S. industrial base, supporting both commercial and defense needs. This contract falls within the defense sub-sector, specifically focusing on the maintenance and repair of naval vessels. The market for naval ship repair is specialized, often dominated by a few large firms with the necessary infrastructure, security clearances, and expertise. Spending in this area is driven by the Navy's fleet readiness requirements and the lifecycle of its vessels. Comparable spending benchmarks would involve analyzing the costs of similar drydocking and major repair availabilities for other Arleigh Burke-class destroyers or comparable naval combatants.

Small Business Impact

The contract data indicates that this was a full and open competition and does not specify any small business set-aside. Therefore, there are no direct set-aside implications for small businesses on this prime contract. However, the prime contractor, BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC., may engage small businesses as subcontractors for specialized services or material procurement. The extent of subcontracting to small businesses will depend on the prime contractor's procurement policies and the availability of qualified small business vendors in the required trades and services.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the firm fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon price and schedule. Transparency is facilitated through contract award announcements and public databases. The Inspector General for the Department of Defense may conduct audits or investigations if concerns regarding fraud, waste, or abuse arise during the contract performance period.

Related Government Programs

Naval Ship Repair and Maintenance
Shipbuilding and Repair
Defense Readiness Contracts
Arleigh Burke-class Destroyer Support
Fiscal Year 2025 Defense Spending

Risk Flags

Potential for unforeseen technical issues during extensive repairs.
Risk of schedule slippage impacting fleet readiness.
Contractor performance below expectations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $133.5 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC.. USS LABOON (DDG 58) FY25 DSRA

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS MARITIME SOLUTIONS NORFOLK 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 $133.5 million.

What is the period of performance?

Start: 2024-10-18. End: 2026-07-31.

What is the track record of BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. in performing similar naval vessel repair contracts?

BAE Systems Maritime Solutions is a significant player in the naval shipbuilding and repair industry, with extensive experience supporting U.S. Navy vessels. They have a history of performing complex maintenance, modernization, and repair availabilities on various classes of ships, including destroyers. Their facilities in Norfolk, Virginia, are strategically located to support the Atlantic Fleet. While specific performance metrics for past contracts are not detailed here, their continued selection for such critical work suggests a generally positive track record. However, a deeper dive into past performance reviews, contract modifications, and any past disputes or claims would provide a more comprehensive assessment of their reliability and capability for this specific USS LABOON (DDG 58) repair.

How does the awarded amount compare to the estimated cost or previous repair costs for similar vessels?

Without access to the government's cost estimates or historical data for the USS LABOON (DDG 58) or comparable Arleigh Burke-class destroyers, a direct comparison is challenging. However, the $133.5 million figure for a comprehensive two-year drydocking, repair, and maintenance availability is substantial, reflecting the complexity and scale of work required for a modern guided-missile destroyer. Naval vessel maintenance is inherently expensive due to specialized labor, materials, and the need for rigorous quality control and testing. Benchmarking against publicly available data for similar availabilities on DDG-51 class ships, if available, would be necessary for a precise value assessment. The firm fixed-price nature suggests the government sought cost certainty, but the true value is determined by the quality and timeliness of the repairs against this price.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks for this contract include potential cost overruns due to unforeseen technical issues discovered during the extensive repairs, schedule delays impacting fleet readiness, and performance deficiencies by the contractor. Mitigation strategies are inherent in the contract type and process. The firm fixed-price structure shifts much of the cost overrun risk to the contractor, incentivizing efficient execution. The full and open competition process aims to select a capable contractor with a strong performance history. The Navy will likely employ robust project management, quality assurance inspections, and performance monitoring throughout the 651-day period to identify and address issues proactively. Contract clauses regarding remedies for non-performance also serve as a mitigation tool.

How effective is the full and open competition process in ensuring competitive pricing for naval ship repair?

Full and open competition is generally considered the most effective method for ensuring competitive pricing in federal contracting, including for complex services like naval ship repair. By allowing all responsible sources to bid, it fosters a market environment where contractors must offer their best pricing and technical solutions to win the award. The presence of two bidders in this case indicates some level of competition, but the ideal scenario involves multiple bidders actively competing. The effectiveness is further enhanced by clear solicitation requirements, a fair evaluation process, and the government's ability to negotiate. While it doesn't guarantee the absolute lowest price, it significantly increases the likelihood of achieving fair market value compared to sole-source or limited competition approaches.

What is the historical spending trend for USS LABOON (DDG 58) repair and maintenance?

Historical spending data specifically for the USS LABOON (DDG 58) repair and maintenance is not provided in the given data. However, naval vessels, particularly destroyers like the DDG-51 class, undergo regular maintenance cycles, including drydocking and scheduled repairs, throughout their service life. These availabilities are typically awarded every few years and represent significant investments. The frequency and cost of these maintenance periods increase as the ship ages. To understand historical spending patterns, one would need to access the Federal Procurement Data System (FPDS) or similar databases to track previous contracts awarded for the USS LABOON (DDG 58) or its sister ships, analyzing award amounts, contract types, and the scope of work over time.

What are the implications of the firm fixed-price contract type for managing budget and performance?

A firm fixed-price (FFP) contract type is generally preferred by the government when the scope of work is well-defined and risks can be reasonably assessed. For this USS LABOON (DDG 58) repair, the FFP structure provides budget certainty, as the total cost is established upfront. This shifts the primary risk of cost overruns to the contractor, incentivizing them to manage their resources efficiently and control expenses. From a performance perspective, the FFP contract clearly defines the deliverables and the price, making it easier to hold the contractor accountable for meeting the contract requirements. However, if unforeseen technical issues arise that significantly alter the scope, contract modifications may be necessary, potentially leading to price adjustments, though the contractor is expected to have factored in some level of contingency.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002424R4427

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ball Corporation

Address: 750 W BERKLEY AVE, NORFOLK, VA, 23523

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: $134,274,883

Exercised Options: $133,501,557

Current Obligation: $133,501,557

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $33,172,570

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline