DoD awards $42.1M for LVA installation planning, with a significant portion for travel

Contract Overview

Contract Amount: $42,139,478 ($42.1M)

Contractor: Huntington Ingalls Inc

Awarding Agency: Department of Defense

Start Date: 2024-10-04

End Date: 2027-09-30

Contract Duration: 1,091 days

Daily Burn Rate: $38.6K/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: LVA INSTALLATION PLANNING PHASE AWARD (CLIN 0001) WITH ASSOCIATED TRAVEL (CLIN 0002)

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23607

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $42.1 million to HUNTINGTON INGALLS INC for work described as: LVA INSTALLATION PLANNING PHASE AWARD (CLIN 0001) WITH ASSOCIATED TRAVEL (CLIN 0002) Key points: 1. Value for money is difficult to assess due to the planning phase nature of the award. 2. Competition dynamics indicate a full and open competition after exclusion of sources, suggesting a deliberate sourcing strategy. 3. Risk indicators include the Cost Plus Fixed Fee contract type, which can incentivize cost overruns. 4. Performance context is limited as this is an initial planning phase award. 5. Sector positioning is within defense logistics and maintenance support. 6. The contract duration of nearly three years suggests a substantial scope for the planning phase.

Value Assessment

Rating: fair

Benchmarking value for a planning phase award is challenging. The contract's total value of $42.1 million, including travel, appears substantial for installation planning. Without detailed breakdowns of labor hours, rates, and travel requirements, a direct comparison to similar contracts is difficult. The Cost Plus Fixed Fee structure requires careful monitoring to ensure costs remain reasonable and aligned with the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This specific category suggests that while the competition was intended to be broad, certain sources were excluded for reasons not immediately apparent from the data. The number of bidders is not specified, making it hard to gauge the true level of competition. This procurement method might limit price discovery compared to a standard full and open competition.

Taxpayer Impact: The exclusion of sources, even within a broad competition framework, could potentially lead to less competitive pricing for taxpayers if it restricts the pool of capable offerors.

Public Impact

The primary beneficiaries are the Department of Defense and the Department of the Navy, receiving planning services for LVA installation. The services delivered include planning for the installation of Logistics Vehicle Systems (LVA). The geographic impact is likely concentrated in areas where LVA installations are planned, with travel costs indicating potential multi-site involvement. Workforce implications may involve specialized technical personnel for planning and installation oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed tightly.
Significant allocation for travel may indicate complex logistical challenges or multi-site planning requirements.
The 'exclusion of sources' in competition raises questions about the breadth of market engagement.
Limited performance data available as this is an initial planning phase award.

Positive Signals

Awarded under a competitive process, suggesting some level of market vetting.
The contract duration of nearly three years allows for thorough planning and execution of the initial phase.
The contract is for a critical planning phase, essential for successful future installations.

Sector Analysis

This contract falls within the defense logistics and maintenance sector, specifically focusing on the planning for the installation of vehicle systems. The market for such services involves specialized contractors with expertise in military vehicle logistics and systems integration. Comparable spending benchmarks would typically be found within broader defense procurement data for vehicle modernization and support contracts.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific award. Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside. The impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specific planning or support roles.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy contracting and program management offices. Accountability measures will be tied to the Cost Plus Fixed Fee structure, requiring detailed cost reporting and performance metrics. Transparency may be limited due to the nature of defense procurement and the 'exclusion of sources' competition. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Logistics Vehicle System (LVS) Modernization Programs
Defense Vehicle Maintenance and Repair Contracts
Military Equipment Installation Support
Department of Defense Supply Chain Management

Risk Flags

Cost Plus Fixed Fee contract type
Significant travel allocation
Full and Open Competition After Exclusion of Sources
Planning phase award with limited performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.1 million to HUNTINGTON INGALLS INC. LVA INSTALLATION PLANNING PHASE AWARD (CLIN 0001) WITH ASSOCIATED TRAVEL (CLIN 0002)

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 $42.1 million.

What is the period of performance?

Start: 2024-10-04. End: 2027-09-30.

What is the specific nature of the LVA installation and the associated planning activities?

The Logistics Vehicle System (LVS) is a family of heavy-duty military trucks used by the U.S. military. The 'LVA INSTALLATION PLANNING PHASE AWARD' suggests that this contract is focused on the preparatory stages for integrating or upgrading these vehicles, potentially involving new technologies, operational configurations, or deployment strategies. Planning activities could encompass site assessments, technical requirement definition, logistical coordination, risk analysis, and the development of detailed implementation schedules. The significant travel component indicates that these planning efforts may involve multiple locations or extensive site surveys.

How does the Cost Plus Fixed Fee (CPFF) contract type impact cost control for this planning phase?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides the government with some cost certainty regarding the contractor's profit margin, the overall cost is variable and depends on the actual expenses incurred. This structure can incentivize contractors to incur costs to complete the work, as their profit is fixed regardless of the total cost. Effective oversight, detailed cost monitoring, and clear performance metrics are crucial to manage costs effectively under a CPFF arrangement and prevent potential overruns.

What are the implications of 'Full and Open Competition After Exclusion of Sources' for this award?

This procurement method indicates that the agency initially intended to conduct a full and open competition but subsequently excluded certain sources. The reasons for exclusion are not provided but could stem from specific technical requirements, past performance issues, or national security considerations. While it aims for broad competition, the exclusion narrows the field of potential bidders. This could potentially limit the range of innovative solutions or competitive pricing that might have emerged from a truly unrestricted full and open competition. The number of bidders participating under these conditions is critical to understanding the actual level of competition achieved.

What is the typical cost structure for planning phases of major defense equipment installations?

Planning phases for major defense equipment installations are highly variable and depend on the complexity, scope, and duration of the planning effort. Costs typically include labor (engineers, project managers, technical specialists), travel (site surveys, meetings), materials (documentation, software), and overhead. The allocation of a significant portion to travel, as seen in this $42.1 million award, suggests extensive site visits, coordination across multiple locations, or specialized assessments. Benchmarking is difficult without specific details on labor rates, hours, and the exact nature of the planning activities, but large-scale defense projects often involve substantial upfront planning investments.

What are the potential risks associated with the nearly three-year duration of this planning contract?

A nearly three-year duration for a planning phase award presents several potential risks. Firstly, requirements or technological landscapes may evolve significantly over this period, potentially rendering initial plans outdated or requiring costly revisions. Secondly, prolonged contracts can increase the risk of scope creep, where additional tasks or requirements are added without commensurate adjustments to the contract's cost or timeline. Thirdly, maintaining consistent oversight and engagement from the government side over such an extended period can be challenging. Finally, the longer the planning phase, the greater the delay in proceeding to execution, potentially impacting overall program timelines and readiness.

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: $42,139,478

Exercised Options: $42,139,478

Current Obligation: $42,139,478

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