Navy awards $231M contract for shipbuilding services to National Steel and Shipbuilding Company

Contract Overview

Contract Amount: $231,355,590 ($231.4M)

Contractor: National Steel and Shipbuilding Company

Awarding Agency: Department of Defense

Start Date: 1999-10-07

End Date: 2008-08-13

Contract Duration: 3,233 days

Daily Burn Rate: $71.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: NOT REPORTED

Sector: Defense

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92186

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $231.4 million to NATIONAL STEEL AND SHIPBUILDING COMPANY for work described as: Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. Long contract duration of over 8 years may indicate complex or ongoing service needs. 3. The contract's value of $231 million over its term warrants scrutiny for cost-effectiveness. 4. Performance context is limited without specific details on the services rendered. 5. Sector positioning within Defense is clear, focusing on naval shipbuilding and repair. 6. Risk indicators are moderate, given the long-term nature and significant value.

Value Assessment

Rating: fair

The total contract value of $231 million over approximately 8.75 years averages to about $26.4 million per year. Benchmarking this against similar large-scale naval shipbuilding and repair contracts is difficult without more specific service details. However, the sheer scale suggests a significant investment. Without data on the specific deliverables and their market rates, a precise value-for-money assessment is challenging, but the long duration and substantial cost warrant careful performance monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The presence of two bids (as suggested by 'no': 2) implies some level of competition, but the exact number of bidders and the nature of the competition are not fully detailed. A limited number of bidders for such a large and specialized contract could still lead to price discovery challenges.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open process. However, the actual savings realized depend on the number and aggressiveness of the bids received.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational readiness, through the provision of shipbuilding and repair services. Services delivered likely include construction, maintenance, repair, and modernization of naval vessels. Geographic impact is concentrated in California, where National Steel and Shipbuilding Company is located. Workforce implications include job creation and retention within the shipbuilding and maritime industries in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 8 years) increases the risk of cost overruns or scope creep if not managed tightly.
Lack of specific performance metrics or deliverables makes it difficult to assess the contractor's efficiency and effectiveness.
The significant contract value necessitates robust oversight to ensure taxpayer funds are used judiciously.

Positive Signals

Awarded through full and open competition, suggesting a potentially competitive pricing environment.
The contractor, National Steel and Shipbuilding Company, likely possesses specialized expertise for naval shipbuilding.
The contract's long-term nature can provide stability and predictability for both the Navy and the contractor.

Sector Analysis

This contract falls within the Defense sector, specifically naval shipbuilding and repair. The U.S. naval shipbuilding industry is a critical component of national security, characterized by high barriers to entry due to specialized facilities, skilled labor, and stringent regulatory requirements. Spending in this area is often substantial and long-term, reflecting the lifecycle of naval assets. Comparable spending benchmarks would typically involve other major shipbuilding contracts for destroyers, aircraft carriers, submarines, or auxiliary vessels, often valued in the hundreds of millions to billions of dollars.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Large-scale defense contracts like this often involve significant subcontracting opportunities. While not explicitly detailed here, it's probable that National Steel and Shipbuilding Company would engage various small and medium-sized businesses for specialized components, materials, and services, thereby contributing to the broader small business ecosystem within the defense industrial base.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards, delivery schedules, and payment milestones. Transparency is typically managed through contract award databases and reporting requirements. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Vessel Construction
Ship Repair and Maintenance Services
Defense Procurement
Maritime Industry Contracts

Risk Flags

Long contract duration may increase risk of cost escalation.
Limited number of bidders for a large contract could indicate reduced competition.
Lack of specific performance details hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $231.4 million to NATIONAL STEEL AND SHIPBUILDING COMPANY. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is NATIONAL STEEL AND SHIPBUILDING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $231.4 million.

What is the period of performance?

Start: 1999-10-07. End: 2008-08-13.

What specific types of vessels or services does this $231 million contract cover for the Department of the Navy?

The provided data indicates the contract is for 'shipbuilding services' awarded to National Steel and Shipbuilding Company (NASSCO). While the exact nature of these services isn't detailed, NASSCO is known for constructing and repairing various naval vessels, including destroyers, amphibious assault ships, and oilers. Given the contract's substantial value ($231 million) and long duration (1999-2008), it likely encompasses a significant scope of work, potentially including new vessel construction, major overhauls, modernization programs, or a combination of repair and maintenance activities for a fleet of ships operating out of the Pacific region.

How does the $231 million contract value compare to historical spending on similar naval shipbuilding services?

The $231 million contract value, awarded in 1999 and spanning nearly nine years, represents a significant but not extraordinary investment for major naval shipbuilding services. For context, individual destroyers can cost over $1 billion, and aircraft carriers cost several billion dollars. Contracts for large-scale repair, overhaul, or modernization of existing fleets, or the construction of specialized support vessels, often fall within the tens to hundreds of millions of dollars range. Without knowing the specific deliverables (e.g., number of ships, type of service), a precise comparison is difficult. However, this figure aligns with substantial, multi-year service agreements typical in the defense shipbuilding sector.

What are the key performance indicators (KPIs) or metrics used to assess the performance of National Steel and Shipbuilding Company under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or metrics used to assess National Steel and Shipbuilding Company's performance under this contract. Typically, for shipbuilding and repair contracts, KPIs would focus on adherence to delivery schedules, quality of workmanship (e.g., defect rates, rework required), cost control (staying within budget), safety performance (incident rates), and compliance with technical specifications. The Department of the Navy would have established specific measurable goals and evaluation criteria within the contract's statement of work and performance requirements.

What is the track record of National Steel and Shipbuilding Company (NASSCO) with the Department of Defense, particularly for contracts of this magnitude?

National Steel and Shipbuilding Company (NASSCO), a subsidiary of General Dynamics, has a long and extensive track record with the Department of Defense, particularly the Department of the Navy. NASSCO has been a primary builder of U.S. Navy ships for decades, including destroyers, cruisers, frigates, and auxiliary ships. They have consistently secured large, complex contracts for both new construction and major repair/modernization programs. Their history includes numerous contracts valued in the hundreds of millions, and sometimes billions, of dollars, demonstrating a capability to manage large-scale defense shipbuilding projects. This $231 million contract aligns with their established role as a major defense contractor in the shipbuilding sector.

Are there any specific risks identified with this contract, such as cost overruns, schedule delays, or technical challenges?

The provided data does not explicitly detail specific risks associated with this contract. However, inherent risks in long-term, high-value shipbuilding contracts include potential cost overruns due to fluctuating material prices, labor costs, or unforeseen technical complexities discovered during construction or repair. Schedule delays are also common, stemming from supply chain disruptions, design changes, or integration issues. Technical challenges can arise from incorporating new technologies or meeting stringent performance requirements for naval vessels. The contract's duration of over eight years amplifies these risks, necessitating robust program management and oversight from the Department of the Navy to mitigate them.

What was the competitive landscape like for this 'full and open' contract, and how many bids were received?

The contract was awarded under 'full and open competition,' signifying that the solicitation was broadly advertised, and all responsible sources were encouraged to submit proposals. The data indicates that two bids were received ('no': 2). While 'full and open' implies maximum potential competition, receiving only two bids for a contract of this magnitude and specialization might suggest a limited number of qualified contractors capable of undertaking such work. The level of competition influences price negotiation and the potential for achieving best value for the government.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: NOT REPORTED (NO)

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: HARBOR DR AT 28TH ST, SAN DIEGO

Business Categories: Category Business, Not Designated a Small Business

Timeline