DoD's $643M Aircraft Carrier Support Contract Awarded to Huntington Ingalls Faces Scrutiny

Contract Overview

Contract Amount: $6,436,283 ($6.4M)

Contractor: Huntington Ingalls Inc

Awarding Agency: Department of Defense

Start Date: 2025-12-01

End Date: 2030-11-30

Contract Duration: 1,825 days

Daily Burn Rate: $3.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AIRCRAFT CARRIER ENGINEERING SUPPORT (ACES) AND FORD CLASS DESIGN SUPPORT (FCDS)

Place of Performance

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

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $6.4 million to HUNTINGTON INGALLS INC for work described as: AIRCRAFT CARRIER ENGINEERING SUPPORT (ACES) AND FORD CLASS DESIGN SUPPORT (FCDS) Key points: 1. Significant contract value ($643M) for specialized engineering and design support. 2. Sole-source award to Huntington Ingalls raises questions about competition and potential price inflation. 3. Long contract duration (5 years) increases risk exposure for taxpayers. 4. Focus on critical naval infrastructure highlights national security implications.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a sole-source award, makes a direct pricing assessment difficult. Without competitive bids, it's challenging to benchmark against similar services to determine if the fixed fee adequately reflects market rates or if there's potential for cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Huntington Ingalls. This lack of competition limits price discovery and may result in higher costs for the government compared to a scenario with multiple bidders vying for the contract.

Taxpayer Impact: The absence of competition in this large contract could lead to taxpayers bearing a higher cost than necessary for essential aircraft carrier engineering and design support.

Public Impact

Taxpayers may be overpaying for critical naval engineering services due to the lack of competitive bidding. The long-term nature of the contract (5 years) means potential cost inefficiencies could persist for an extended period. Dependence on a single contractor for such vital support could pose a risk to national security if performance falters. Transparency in cost reporting and performance metrics will be crucial for oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration
No small business participation noted

Positive Signals

Essential support for critical naval assets
Experienced contractor in shipbuilding and repair

Sector Analysis

This contract falls within the Ship Building and Repairing sector, specifically supporting the complex engineering and design needs of aircraft carriers. Spending in this sector is often characterized by high costs, long lead times, and significant government investment due to the specialized nature of naval shipbuilding and maintenance.

Small Business Impact

The provided data does not indicate any specific provisions or set-asides for small businesses in this contract. Given the specialized nature of aircraft carrier engineering and design, it is possible that the prime contractor is expected to subcontract, but this is not explicitly stated.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight from the Department of Defense to ensure fair pricing and effective performance. Robust auditing of costs and regular performance reviews will be essential to hold Huntington Ingalls accountable and protect taxpayer interests.

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 contract type increases risk of cost overruns.
Long contract duration (5 years) extends exposure to potential inefficiencies.
No clear indication of small business participation.
Potential for contractor lock-in due to specialized knowledge.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.4 million to HUNTINGTON INGALLS INC. AIRCRAFT CARRIER ENGINEERING SUPPORT (ACES) AND FORD CLASS DESIGN SUPPORT (FCDS)

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 $6.4 million.

What is the period of performance?

Start: 2025-12-01. End: 2030-11-30.

What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities or circumstances where only one contractor can meet the requirement. For this contract, the Department of the Navy would need to provide a compelling justification. To ensure fair pricing, the government should conduct thorough cost analyses, review the contractor's proposed costs, and potentially negotiate the fixed fee aggressively. Independent cost estimates and market research, even for sole-source procurements, are crucial.

What are the specific risks associated with a Cost Plus Fixed Fee (CPFF) contract for such critical engineering support, and how are they being mitigated?

CPFF contracts carry a risk of cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. If costs escalate beyond projections, the government bears the burden. Mitigation strategies include stringent cost accounting standards, detailed work breakdown structures, robust oversight of contractor expenditures, and clear performance metrics tied to the fixed fee. The government must actively monitor costs and ensure the contractor exercises cost control.

How will the effectiveness of Huntington Ingalls' engineering and design support be measured throughout the contract's five-year duration?

Effectiveness will likely be measured through a combination of technical performance metrics (TPMs), delivery schedules, quality control reports, and stakeholder feedback from the Department of the Navy. Key performance indicators (KPIs) related to design accuracy, problem resolution timeliness, innovation, and adherence to budget constraints will be crucial. Regular progress reviews and formal performance evaluations will assess the contractor's contribution to the ACES and FCDS programs.

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: N0002424R2100

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: $471,969,850

Exercised Options: $91,891,302

Current Obligation: $6,436,283

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline