DoD awards $101.6M for USS WASP availability, BAE Systems secures contract for ship repair

Contract Overview

Contract Amount: $101,614,091 ($101.6M)

Contractor: BAE Systems Maritime Solutions Norfolk Inc.

Awarding Agency: Department of Defense

Start Date: 2024-10-11

End Date: 2026-05-22

Contract Duration: 588 days

Daily Burn Rate: $172.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: USS WASP (LHD 1) FY25 SELECTED RESTRICTED AVAILABILITY (SRA)

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23523

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $101.6 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC. for work described as: USS WASP (LHD 1) FY25 SELECTED RESTRICTED AVAILABILITY (SRA) Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 3. The duration of 588 days suggests a significant scope of work for ship maintenance. 4. The awardee, BAE Systems Maritime Solutions, is a major player in the defense shipbuilding sector. 5. This contract falls under the Ship Building and Repairing NAICS code, a critical defense industrial base sector. 6. The contract is for Selected Restricted Availability (SRA), a specific type of maintenance. 7. The contract value is substantial, reflecting the complexity of naval vessel maintenance.

Value Assessment

Rating: good

The contract value of $101.6 million for a 588-day availability period for a large naval vessel like the USS WASP (LHD 1) appears reasonable given the scope of work. While specific cost breakdowns are not provided, the firm fixed price nature of the contract suggests that the government has negotiated a ceiling price. Benchmarking against similar availabilities for LHD-class ships would provide a more precise value-for-money assessment, but the price seems aligned with the specialized nature of naval ship repair and maintenance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of 3 bidders indicates a competitive environment for this type of specialized naval repair work. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by fostering a market-driven price. Multiple bidders help to prevent inflated costs and encourage innovative solutions for ship maintenance.

Public Impact

The primary beneficiaries are the U.S. Navy, ensuring the operational readiness of the USS WASP (LHD 1). Services delivered include maintenance, repair, and modernization to keep the vessel combat-ready. The geographic impact is centered around Norfolk, Virginia, where BAE Systems Maritime Solutions is located and where the ship is likely based. The contract supports skilled labor in the shipbuilding and repair industry, particularly in the Norfolk area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extensive repair period, despite the FFP structure.
Dependence on a single contractor for a critical availability period could pose risks if performance issues emerge.
The long duration of the contract may lead to challenges in adapting to evolving technological requirements during the maintenance period.

Positive Signals

Firm Fixed Price contract structure transfers significant cost risk to the contractor.
Award to an experienced contractor like BAE Systems suggests a higher likelihood of successful execution.
Full and open competition indicates a healthy market and potential for competitive pricing.
The contract duration aligns with the substantial scope of work required for a major naval vessel availability.

Sector Analysis

The Ship Building and Repairing sector is a critical component of the U.S. defense industrial base, requiring specialized facilities and highly skilled labor. This contract for the USS WASP (LHD 1) availability fits within the broader market for naval vessel maintenance and modernization. Spending in this sector is often characterized by large, complex contracts awarded through competitive processes, with significant long-term implications for national security and economic activity in specific geographic regions.

Small Business Impact

The data indicates this contract was awarded through full and open competition and does not specify any small business set-aside. While BAE Systems is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on BAE Systems' procurement practices and the specific requirements of the availability work.

Oversight & Accountability

The Department of the Navy, through its contracting officers and program managers, will oversee this contract. The firm fixed price nature provides a clear financial framework. Transparency is facilitated by the public nature of contract awards. The Inspector General of the Department of Defense may conduct audits or investigations if any concerns regarding fraud, waste, or abuse arise during the contract performance.

Related Government Programs

Naval Ship Maintenance and Repair
Shipbuilding and Repair Contracts
Fleet Readiness
Amphibious Assault Ship Maintenance
Department of Defense Shipyard Services

Risk Flags

Potential for unforeseen repair discoveries impacting schedule and cost.
Reliance on specific skilled labor and specialized parts.
Long contract duration increases exposure to external risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $101.6 million to BAE SYSTEMS MARITIME SOLUTIONS NORFOLK INC.. USS WASP (LHD 1) FY25 SELECTED RESTRICTED AVAILABILITY (SRA)

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 $101.6 million.

What is the period of performance?

Start: 2024-10-11. End: 2026-05-22.

What is the historical spending pattern for USS WASP (LHD 1) availability contracts?

Analyzing historical spending for USS WASP (LHD 1) availability contracts requires access to detailed procurement data over multiple fiscal years. Typically, major naval vessels undergo periodic availabilities for maintenance, repair, and modernization, with costs varying based on the scope of work, duration, and prevailing market rates. For instance, a Selected Restricted Availability (SRA) like this one focuses on specific maintenance tasks, whereas a more comprehensive Dry-docking and Complex Overhaul (DDCO) would involve more extensive work and higher costs. Past contracts for similar LHD-class ships can serve as benchmarks. For example, if previous SRAs for this class averaged between $80M-$120M over similar timeframes, the current $101.6M award would fall within that expected range. Fluctuations in spending can be attributed to factors such as the vessel's operational tempo, the age of the ship, and the complexity of required upgrades or repairs. Tracking these patterns helps in assessing the reasonableness of current contract values and identifying potential trends in maintenance costs.

How does the performance of BAE Systems Maritime Solutions on similar contracts compare?

BAE Systems Maritime Solutions is a significant defense contractor with a substantial track record in naval shipbuilding and repair. Assessing their performance on similar contracts involves reviewing past performance evaluations, contract completion timeliness, and adherence to budget. For LHD-class ship availabilities, BAE Systems has historically been a key player, often competing for and winning these types of contracts. Their experience with complex naval platforms suggests a strong understanding of the technical requirements and logistical challenges involved. Publicly available contract data and performance reports (if accessible) would detail their success rates, any past performance issues, and their ability to meet quality and schedule requirements. Generally, large contractors like BAE Systems are expected to have robust quality assurance and project management systems in place, which are critical for the successful execution of lengthy and complex availabilities like the one for USS WASP.

What are the key risks associated with this specific contract, beyond standard FFP risks?

Beyond the inherent risks of a Firm Fixed Price (FFP) contract, such as the contractor absorbing unforeseen cost increases, this contract carries specific risks related to the nature of naval vessel maintenance. One significant risk is the potential for 'scope creep' or the discovery of unforeseen critical repairs during the availability period that were not initially identified. While the SRA designation implies a focused scope, the complexity of aging naval platforms can lead to unexpected findings. Another risk is the availability of specialized parts and skilled labor; disruptions in the supply chain or workforce shortages could impact the schedule. Furthermore, the long duration (588 days) increases the exposure to external factors like changes in operational tempo or evolving threat assessments that might necessitate modifications to the planned work. The reliance on a single prime contractor, even a capable one, also presents a risk if performance falters significantly.

What is the estimated value of the total market for naval ship repair and maintenance in the US?

The total market for naval ship repair and maintenance in the United States is substantial, encompassing both government-owned shipyards and private sector contractors. This market is driven by the U.S. Navy's extensive fleet, which requires continuous maintenance, modernization, and repair to ensure operational readiness. Market size estimates can vary depending on the scope included (e.g., routine maintenance, major overhauls, conversions, new construction support). Industry reports and government analyses often place the annual spending in this sector in the tens of billions of dollars. This includes contracts awarded by the Navy, as well as work performed for other maritime agencies. The market is characterized by a limited number of large, specialized private shipbuilders and repair facilities capable of handling complex naval vessels, alongside government-operated facilities. Factors influencing market growth include defense budgets, geopolitical tensions, and the aging of the existing fleet.

How does the 'Selected Restricted Availability' (SRA) designation impact the contract's scope and cost compared to a standard availability?

A Selected Restricted Availability (SRA) is a type of maintenance availability for naval vessels that focuses on a specific set of planned work items, often addressing particular systems or components that require attention. Unlike a more comprehensive availability like a Dry-docking and Complex Overhaul (DDCO), an SRA typically has a more defined and often shorter scope, aiming to resolve specific issues without undertaking a complete modernization or extensive hull work. This focused approach generally leads to a lower overall cost and shorter duration compared to a full overhaul. However, the 'restricted' nature means that unforeseen issues discovered during the SRA might require separate, additional contracts or deferral to a future availability. The cost-effectiveness of an SRA lies in its targeted approach, addressing critical needs efficiently. The $101.6 million award for the USS WASP (LHD 1) SRA suggests a significant but focused scope of work, likely involving repairs and maintenance on key systems rather than a complete refit.

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: N0002424R4430

Offers Received: 3

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: $105,935,830

Exercised Options: $101,614,091

Current Obligation: $101,614,091

Actual Outlays: $19,917,931

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $39,081,088

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline